What is the full form of CST:

CST represents Central Sales Tax.

It is a tax applicable on goods which are sold outside the state in which it was manufactured. This tax is implied by the Central government of India. If the sale is made within the state, then this tax is not applicable. Inter-state sales need to pay this tax.

Inter-state sale means that the goods have been manufactured in one particular state, and then they are moved or transferred to another state for sales. When such goods are sold, a tax needs to be paid, which is called as Central Sales tax.

This tax is retained by the state which has collected the tax. There is a separate department which controls the Central Sales Tax, it is known as Sales Tax Authorities. Every state has this department and it administers the taxation done in that state. The Sales Tax officer of each state has to collect CST with the other local taxes.

CST can also be understood as an indirect tax which needs to be paid only for the goods which are sold from one state to another, which means that the seller and the buyer should not be from the same state. This taxation is governed by the Central sales tax act which was made in the year 1956. The tax charges are specified by every state separately.