Sales
Tax is another form of all Taxes which can be paid by the consumer for all
their products and services to the government. In India, there is a different
form of sales tax. Sales Tax applied by the Central government as well as State
government. So, we should know how to calculate sales tax.
NOTE:
In India, Sales Tax has been replaced by GST,
Sales
Tax:
This
tax is applied by both the government Central Government and State Government.
Based on the Tax policies the central government decides on Tax, which does not
be varied inside the country. State Sales Tax laws may vary from one state to
another state.
Different
Form of Sales Tax:
In
most of the company Standard types of Sales Tax is applicable.
§ Whole
Sales Tax
§ Manufactures
Sales Tax
§ Retails
Sales Tax
§ Use
Tax
§ Value
Added Tax (VAS)
How
to Calculate Sales Tax at a glance?
The
formula for calculating the Sale Tax as given below:
Sales
Tax = Cost of Products * Rate of Sales Tax
In
India, the Sales Tax Rate Stands at 18%. From 2006 to 2017 the average sales
rate of 14.22%. The lowest sales tax rate of 12.36% in 2012 and the highest
sales tax rate of 18% in 2017.
•
Sale Tax can vary from state to state.
•
Sale Tax is always calculated in a
percentage.
•
If there are more items, then after
adding the cost of all items, Sales tax will be calculated.
Sales
Tax & It’s Variations
In
India, there are exactly three different types of sales tax and they are as
follows:
Ø Central Sales Tax:It is payable inside the State in
which the products are sold. It depends upon the Tax policies. The Act, which
is for Central Sales Tax, was formed for making the collection of the Tax
simpler. The Central Sales Tax started in 1956. Due to the CST Act, the Central
Government allowed collecting all sales tax on various products.
Ø State Government Tax: Every state
government of India has the power on sales Tax to achieve its financial
requirement. It can differ from one state to another state. It can vary in
Value Added Service (VAS).
Ø Sales Tax Mitigation: It can be seen
that the Sales Tax can be reduced by Business for themselves and also their
customer. Due to proper planning and
activities for tax consequence.
Designing
hat type of invoices so that it can reduce the taxable portion of a sales
transaction.
Conclusion
Sales Tax is another type of Indirect Tax that is paid by the consumer at the time of purchasing any products. In India, Sales Tax is replaced by GST on 1st July 2017. Sales Tax can differ from State to State to meet their financial requirement. Sales Tax can be reduced with the activities for tax consequence.
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