Central SalesTax on Software in India without producing 'C' form?

what is central sales tax in India for inter state sale of customised software to enduser without producing 'C' Form

Central SalesTax on Software in India without producing 'C' form?
India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions %26amp; Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.





Since 1991 tax system in India has under gone a radical change, in line with liberal economic policy and WTO commitments of the country. Some of the changes are:





*





Reduction in customs and excise duties


*





Lowering corporate Tax


*





Widening of the tax base and toning up the tax administration





Direct Taxes





Personal Income Tax





Individual income slabs are 0%, 10%, 20%, 30% for annual incomes upto Rs 50,000, 50,000 - 60,000, 60,000 - 1,50,000 and above 1,50,000 respectively.





Corporate Income Tax





For domestic companies, this is levied @ 35% plus surcharge of 5%, where as for a foreign company (including branch/project offices), it is @ 40% plus surcharge of 5%. An Indian registered company, which is a subsidiary of a foreign company, is also considered an Indian company for this purpose.











Depreciation and interest deductions:





Depreciation rates





Assets








Rates (%)





Buildings








5-100





Plant and Machinery








25-100





Furniture and Fittings








15





Vehicles (Other than for commercial use)








20





Pollution Control Equipment








80





Energy Saving Devices








80





Ships








25





Intangible assets








25











Withholding Tax for NRIs and Foreign Companies:





Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates are:





1. Interest - 20% of Gross Amount





2. Dividends - 10%





3. Royalties - 20%





4. Technical Services - 20%





5. Any other Services - Individuals - 30% of net income





Companies/Corporates - 40% of net income





The above rates are general and in respect of the countries with which India does not have a Double Taxation Avoidance Agreement (DTAA).





Double Taxation Relief:





India has entered into DTAA with 65 countries including countries like U.S.A., U.K., Japan, France, Germany, etc. These agreements provides for relief from the double taxation in respect of incomes by providing exemption and also by providing credits for taxes paid in one of the countries. These treaties are based on the general principles laid down in the model draft of the Organisation for Economic Cooperation and Development (OECD) with suitable modifications as agreed to by the other contracting countries. In case of countries with which India has double taxation avoidance agreements, the tax rates are determined by such agreements and are indicated for various countries as under:





*





50% deduction of export income due to export of computer software or film software, television software, music software, from the gross total income. The deduction would be restricted to 30% for financial year 2003-04 and no deduction is allowable subsequently.


*





Deduction in respect of certain inter-corporate dividends to the extent of dividend declared.


*





Exemption of any income by way of dividend, interest or long term capital gains of an infrastructure capital fund or an infrastructure capital company from investment made by way of shares or long term finance in any enterprises carrying on the business of developing, maintaining and operating infrastructure facility.





Sales Tax





Central Sales Tax (CST)





CST is 4% on manufactured goods.





Local Sales Tax (LST)





Where a sale takes place within a state, LST would be levied. Such a tax would be governed by the relevant state tax legislation. This is normally up to 15%.





Excise Duty





Excise duty on most commodities ranges between 0 to 16%. Only on seven items duty is imposed at 32%, viz., motor cars, tyres, aerated soft drinks, air conditioners, polyesters filament yarn, pan masala and chewing tobacco. Duty is charged at 30% on petrol with additional excise duty at Rs. 7 per litre. The said rates are subject to exemptions and deductions thereon as may be notified from time to time. Central VAT (CENVAT) is applicable to practically all manufactured goods, so as to avoid cascading effect on duty.





Small Scale Sector is exempted from payment of excise duty from annual production upto Rs.10 million.





Customs Duty





The rates of basic duties vary from 0 to 30%.





Salient features are:





* Peak customs duty reduced from 220% (in 1991) to 30% (in 2002).


*





The general project import duty (for new projects and substantial expansion of existing projects) reduced from 85% to 25%.


*





Import duty under EPCG Scheme is 5%.


*





R%26amp;D imports - 5% customs duty.


* Export made with imported inputs get concessions in form of duty drawback, duty entitlement pass book scheme and advance licence.


* Many type of industries such as 100% EOU and units in free trad
Reply:your item not being a declared item if you are a registered seller and selling to another registered seller then CST without C form would be 10% or the state(your state) sales tax rate whichever is lower...





moreover you cant effect an inter state sales without being registered under CST Act.
Reply:refer to www.allindiantaxes.com