Question Papers of CA - PE-II (of CST only)

CA PE-II November 2007 (25 marks portion relating to CST)

Q. 5 (a) State the brief reasons whether the following statements are true or false as per the provisions of Central Sales-tax Act, 1956 : (i) Works contracts are not liable for Central Sales-tax. (ii) A branch outside the State is also a dealer. (iii) A dealer must obtain registration only if the turnover exceeds the limit prescribed in Sales-tax law of the ‘Appropriate State’. (iv) If the person furnishing surety dies, the dealer must inform the occurrence within 90 days. (v) Insurance charges incurred prior to delivery of goods to the buyer would form part of the turnover (5 x 2 = 10 marks)

Q 5(b) Fill in the blanks in the light of the provisions of Central Sales-tax Act : (i) A & Co. of Mumbai sold goods to B & Co. of Chennai. A & Co. is not a registered dealer under the CST Act. A & Co. ________ (can/cannot) collect tax from B & Co. for the inter-state sale. (ii) Government gives subsidy to compensate the cost of production which is more than controlled sale price. The subsidy so received _______ ( would/would not) form part of turnover. (iii) Javed of Lucknow purchased goods from Bedi of Kanpur and paid State sales tax @ 8%. Later Javed sold those goods to Jain of Mumbai. Javed ______ (can/cannot) claim refund of tax paid on within the State purchase as he has done inter-state sale of those goods subsequently. (iv) Raj of Mysore sold paddy to Ram of Delhi. Ram converted paddy into rice and exported later. The sale by Raj to Ram is _______ (sale in the course of export/an inter-state sale). (v) World & Co. dispatched goods to its agent Best Ltd. The onus of proving it as transfer to agent is on _____ (principal/agent/sales tax authority) (5 x 1 = 5 marks)

Q. 6 Explain any two of the following with reference to the provisions of the Central Sales-tax Act. : (a) State any five forms/declarations used by dealers for availing concessional rate of tax/exemption from tax. (b) When a sale is said to take place in the course of inter-state trade or commerce? (c) Hari a Registered Dealer (with Head Office at Mumbai) furnishes the following information : (i) Inter-state sale of goods (of this Rs. 8,10,000 is the values of goods transferred to branch at Chennai and covered by Form “F”)  - Rs. 38,00,000. (ii) Dharmada collected – Rs 4,450. (iii) Weighment dues charged separately from buyers – Rs 1,05,000 (iv) Cash discount shown in invoice and allowed according to prevailing trade practice – 50,000. (v) Indemnity charges (recovered from Buyers to cover transit loss at their request) – 44,000. Calculate the turnover and CST payable if all sales are made to Registered Dealers @ 4% (2 x 5 = 10 marks)

CA PE-II May 2007 (25 marks portion relating to CST)

Q 5. (a) State with brief reasons whether the following statements are true/false in the light of Central Sales-tax Act: (i) Hide and skins are declared goods. (ii) Subsidy given by government to manufacturers to compensate cost of production will form part of sale price. (iii) Packing charges realized by the dealer is an integral part of sale price. (iv) There is no time limit prescribed for liquidator on his assumption of charge for intimation to Sales-tax authorities. (v) When goods are sent by VPP, the sale is said to take place in the State from where the parcel is sent. (b) Fill in the blanks in the light of the provision of Central Sales-tax Act:  (i) Hari of Chennai made a sale of goods to an Export House in Delhi. These goods were later exported by the Export House to Canada. To enable Hari to claim the exemption under CST Act, the Export House should provide to Hari …                    ….. (ii) One of the essential feature of an inter-state sale is that a transaction should be ……             …..…. (iii) Vikas effected the first inter-state sale on 22.03.2007 and applied for registration on 20.04.2007. The effective date for registration will be ……                       ….... (iv) Charity or Dharmada collected by the dealer ……                  …... form part of sale price. (v) The authority to declare goods of special importance lies with  …                        …...  (10+5 = 15 marks)

Q 6. Explain any two of the following with reference to the provisions of the Central Sales-tax Act: (a) Act or omission for which penalties can be levied. (b) On what consideration goods of special importance are selected? (c) What are the relevant provisions under Central Sales-tax for forfeiture of security by the authority granting certificate of registration?

CA PE-II November 2006 (25 marks portion relating to CST)

Q.5(a) Discuss whether the following statements are true or false, as per the provisions of the Central Sales Tax Act: (i) Definition of “Sales tax law” includes “Value Added tax law”. (ii) The term “works contract” has not been defined. (iii) For the penultimate sale to be deemed as a sale in the course of export, it is possible only if a declaration in prescribed form is furnished by the dealer selling goods (iv) The applicable rate of tax where undeclared goods are sold in an inter-state sale to a registered dealer, if the purchase of such goods is not covered in dealer’s registration certificate, is 4% or the State Sales Tax rate, whichever is lower. (v) Transfer of goods on payment of hire charges, without transfer of property in the goods, will still constitute sale (10 marks).

Q 5 (b) Answer the following with regard to the provisions of the Central Sales-tax Act, 1956 : (i) “Crossing the customs frontiers of India” means crossing the limits of the area of customs station in which imported or exported goods are ordinarily kept - (a) after clearance by customs authorities (b) before clearance by customs authorities (c) before being loaded into the ship or carrier (d) None of the above. (ii) For any trade, commerce, manufacture, etc. to be treated as “business”. (a) profit or gain should accrue from such trade, commerce, etc. in all years; (b) profit or gain should accrue from such trade, commerce, etc., after at least first five years (c) profit or gain need not accrue from such trade, commerce, etc.(d) None of the above. (iii) The burden of proving that transfer of goods is otherwise than by way of sale, lies on - (a) dealer who claims exemption (b) Assessing authority who alleges that it is a taxable sale (c) the carrier who moves the goods (d) None of the above (iv) Amendment of certificate of registration can be made - (a) only upon an application made by the assessee (b) by the Assessing authority suo motu (c) on an application from assessee, or by the assessing authority suo motu on information received from any other source (d) None of the above. (v) Inter-state sale of stationery to the following class of dealer is liable to tax at the normal rate of 4% or the State Government rate, whichever is lower - (a) Government Department issuing Form D (b) Manufacturing company issuing Form C (c) Any dealer, provided appropriate Form is obtained (d) None of the above (5 marks).

Q.6 Write short notes on any two of the following, with reference to the provisions of the CST Act : (a) Sale price (b) Sale to personnel, consular or diplomatic agent of any foreign diplomatic mission. (c) Difference between a sale for export and sale in the course of export ( 5 x 2 = 10 marks)

CA PE-II - May 2006  (25 marks portion relating to CST) New Syllabus

Q 5 (a) Choose the most appropriate and correct answer with regard to the provisions of the Central Sales-Tax Act : (i) Which of the following is not declared goods? (a) Imported cotton (b) Cotton yarn waste (c) Raw unginned cotton (d) Ginned cotton. (ii) The term sale includes : (a) Mortgage (b) pledge (c) hypothecation (d) None of the above (iii) The following acts are punishable under the Act : (a) False representation by a dealer that he is registered (b) Collection of taxes by an unregistered dealer in contravention of Sec. 9A (c) Failure by a person to get himself registered as required u/s 7 of the Act (d) All of the above (iv) A Penultimate sale is considered to be in the course of export only if the dealer selling the goods furnishes a declaration in (a) Form C (b) Form D (c) Form F (d) Form H (v) Place of business does not include (a) a warehouse (b) a godown (c) any other place where the dealer stores his goods (d) dealer’s residence (5 marks).

Q 5 (b) Fill in the blanks in the light of the provisions of the CST Act : (i) The dealer’s turnover is the ______ received and receivable by him in respect of sales of any goods in the course of Interstate trade (ii) Sales or purchases of ascertained goods shall be deemed to be ______ a State, if the goods were within that state at the time the _______ of sale was made (iii) Sales subsequent to the first one made to the registered dealer or Government _____ shall not be liable to tax (iv) The rate of CST applicable to goods exempt from State Sales Tax is ____ (v) The State from which ______ commences shall be the ______ State empowered to assess, collect and enforce payment of CST (5 marks).

Q 5(c) State with reasons whether the following statement are True or False: (i) The Government of Andhra Pradesh selling outmoded model of its computer to the Government of Tamilnadu, is a dealer. (ii) Charcoal treated as declared goods. (iii) Sales tax is leviable on sale of stocks, shares and securities traded by a dealer in shares (iv) A new certificate of registration has to be obtained, if the dealer changes the nature of his business (v) Relief to special economic zone is available in respect of any class/es of goods (5 marks).

Q 6. (a) Y of Mumbai purchases declared goods from a registered dealer in Nagpur paying sales tax at 3%. Subsequently, the commodity was sold to a dealer in Chennai. Y collected CST on the Inter-state sale; he wants refund of tax paid on sale within State (i.e. on purchases effected from Nagpur). Is he entitled to the same? (b) An order of penalty has been imposed on Rahim, a registered dealer. Rahim is in a difficult financial position. He wishes to file appeal before the Appellate Authority. He wants to know whether he can obtain stay against the order of penalty. Advise Rahim (c) L gave notice of appointment as liquidator of Dissolve Ltd. to the concerned Sales Tax Officer. The officer sent an order to L intimating the amount due from Dissolve Ltd. and instructions L that such amount should have priority over all other debts. Advise L (3+3+4 = 10 marks).

CA PE-II - November  2005 (25 marks portion relating to CST) New Syllabus

Q 5 (a) Choose the correct answer with regard to the provisions of the Central Sales Tax act : (a) The collection of Central Sales Tax is effected by (i) the State where the goods are produced (ii) the State where the movement of goods begins (iii) the State where the goods are delivered (iv) the Central Government directly from the dealer (b) The levy of Central sales-tax is on (i) purchase of goods (ii) sale of goods; (iii) purchase or sale of goods (iv) None of the above.  (c) G effected inter-state sale of declared goods to H, charging correct CST of 3%.  G should obtain from H (i) Form ‘D’ (ii) Form ‘C’ (iii) Form ‘G’ (iv) No form (d) R of Coimbatore, Tamil Nadu sold to a Malaysian ship at Kochi port in Kerala, some goods for consumption on board the ship.  Such sale will be (i) inter-state sale; (ii) export sale as it is a foreign ship; (iii) intra-state sale (iv) sale in the course of import. (e) A dealer engaged in effecting inter-state sale is required to get himself registered where his turnover exceeds (i) Any amount (ii) Rs. 1,00,000/- (iii) Rs. 2,50,000/- (iv) Rs. 3,00,000/- (b) Fill up the blanks, having regard to the provisions of the Central sales-tax Act : (i) D, a dealer in Maharashtra has sold goods to G in Gujarat for which the sales tax rate in Maharashtra is 2% and the rate in Gujarat is 3%.  The CST leviable is ………..  (ii) The application for compulsory registration should be submitted by a dealer within ………. days of making an inter-state sale (iii) C of Karnataka sends goods to T of Tamil Nadu for doing some job work.  T adds some materials of his own, completes the job and returns the same to C.  The above transaction ……….. (attracts/does not attract) liability to CST (iv) The dealer aggrieved by an appealable order should normally file appeal within……….. days from the date of ………… (c) State with reasons whether the statements are true or false; as per the provisions of the CST Act : (i) If a dealer applies for amendments to his certificate of CST registration, the amendment will be effective from the date on which the dealer makes an application for amendment (ii) The certificate of CST registration is non-transferable (iii) One form ‘C’ issued by the buyer to seller can cover all transactions in one financial year (iv) In case of penultimate seller making sales to the actual exporters, the actual exporters shall issue a certificate to penultimate seller in Form H (v) The directors of a private company in liquidation are jointly and severally liable personally for any sale tax liability of the company in liquidation (5+5+5 = 15 marks).

Q 6. (a) What is meant by ‘document of title’ in the context of inter-state sale under the CST Act? (b) Mr. D, a first stage dealer in packing machinery in the State of Gujarat furnishes the following data :  (i) Total inter-state sales during FY 2004-05 CST not shown separate Rs. 92,50,000/- (ii) Above sales include : Excise Duty Rs. 9,00,000/- Freight Rs. 1,50,000/- (of this Rs. 50,000/- is not shown separately in invoices), Insurance charges incurred prior to delivery of goods Rs. 32,000/-, Installation and commissioning charges shown separately Rs. 15,000/-, Incentive on sales received from manufacturer Rs. 30,000/- Determine the turnover and CST Payable, assuming that all transactions were covered by valid ‘C’ Forms (3+7 = 10 marks)

CA PE-II - May  2005 (25 marks portion relating to CST) New Syllabus

Q 5 (a) Explain the term ‘declared goods’. Furnish any eight items of such declared goods under the CST Act. (b) Briefly discuss about transactions involving inter-state transfer of goods otherwise than by way of sale. What is the proof to be submitted in this regard under the CST Act? (c) What is the extent of liability of Director of a Private company in liquidation? (5+4+4 = 13 marks).

Q 6 (a) Discuss whether the following statements are true and false, under the CST Act: (i) An Adatiya who brings together the buyer and seller of goods for commission and does not effect sale on his own account but brokers between the buyers and sellers for settling the price is not liable to be registered under the CST Act. (ii) An Insurance Company, which has taken possession of damaged goods of the insured is a dealer if such goods are sold by the insurance company later on. (iii) Profit motive is essential to call an activity a “Business” under the CST Act. (iv) CST is leviable on transactions of leasing/hiring of assets for a defined period  (b) Choose the correct answer with reference to the provisions of the CSI Act : (i) The collection of Central Sales Tax is done by (a) the State in which the movement of goods has first taken place; (b) the State in which the movement of goods ends; (c) the Central Government directly (d) none of the agencies above. (ii) R Oils Ltd., New Delhi sent via its pipeline special purified oil to B Ltd. in Noida, Uttar Pradesh, through its branch at Noida. This transaction has to be regarded as : (a) Branch transfer by HO to branch (b) Branch transfer by HO to branch and then sale within State by the branch of R Oils Ltd. to B Ltd. (c) Inter-state sale (d) Intra-state sale. (iii) X effected his first inter-state sale on 12.03.2005 and applied for registration on 10-04-2005. The effective date of registration will be : (a) 10-04-2005 (b) 12-03-2005 (c) 12-04-2005 (d) Date on which the registering authority issues the registration certificate. (iv) In case of inter-state sale to the Government, the applicable rate of tax is (a) Nil (b) Always 4% (c) 4% or the sales tax rate for the concerned goods in the appropriate State, whichever is higher (d) 4% or the sales tax rate for the concerned goods in the appropriate State, whichever is lower (8 + 4 = 12 marks).

CA PE-II - November  2004 (25 marks portion relating to CST) New Syllabus

Q 5 (i) Total interstate sale for the Financial Year 2003-2004 of X Ltd. is Rs. 1,50,70,000, which consists of the following: 4% CST sales – Rs 91,50,000, 2% CST sales – Rs 59,20,000  Out of the goods sold for Rs. 1,50,000, on 16.7.2003 that were liable to CST @ 4%, goods worth Rs. 50,000 were returned on 12.12.2003 and goods worth Rs. 1,20,000 were returned on 01.02.2004. A buyer to whom goods worth Rs. 55,000 carrying 2% CST was despatched on 16.04.2003, rejected the goods and the same were received back on 15.11.2004. Compute the taxable turnover and tax liability of X Ltd., since all the relevant Forms have been received. (ii) Write short notes on the following : (a) Cancellation of the Certificate of the CST Act. (b) Penultimate Sale of Export [5+5+5 = 15 marks].

Q 6. (i) State with reason, whether the following sales are liable for CST: (a) Sale of bundles of Old Newspaper (b) Sale of Electricity (c) Sale of standing trees to be severed under the terms of Contract (ii) Is the registration as a dealer compulsory, under the CST Act? [6+4 = 10 marks]

CA PE-II - May  2004 (25 marks portion relating to CST) New Syllabus

Q 5. (a) Discuss the term ‘sale’ under CST Act. (b) When a Government can be treated as a dealer? (c) When a certificate of registration can be cancelled? (d) Mr. X reported sales turnover of Rs. 36,20,000. This includes the following: (i) Excise duty Rs. 3,00,000; and (ii) Deposit for returnable containers and packages Rs. 5,00,000. Sales tax was not included separately in the sales invoice. Compute tax liability under the CST Act, assuming the rate of tax @ 4%. (e) Mr. Y of Mumbai purchased declared goods from Nagpur by paying sales tax at 3%. Subsequently, the commodity is sold to a dealer at Chennai. The dealer Y while collects and remits tax on the Interstate sale, wants refund of tax paid on sale within State (i.e. purchase from Nagpur). Is he correct? (5 x 3 = 15 marks)

Q 6. Discuss the following, with brief reasons, whether they are True/False under CST Act: (a) Appeal against an order passed by the registration authority must be filed within 90 days of the service of order to the Central Sales Tax Appellate Authority. (b) Excise duty would form part of sale price and turnover. (c) Where the dealer being a proprietor dies – the certificate of registration will be cancelled. (d) ‘Place of business’ does not include place of business of the agent (e) A dealer who does not get himself registered is liable for penalty ( 5 x 2 = 10 marks)

CA PE-II - November  2003 (25 marks portion relating to CST) New Syllabus

Q. 5 Answer any five from the following with brief reasons whether they are True/False under CST Act: (a) Both registered and unregistered dealers can collect tax under CST. (b) Cost of Freight separately charged in the invoice shall be deducted from Sale price. (c) Subsidy given by Government to manufacturers to compensate Cost of Production will form part of Sale price. (d) All Directors of Private Company (present and past) are personally liable for any tax due under the CST Act. (e) Indian Railways which sells unclaimed/uncollected goods is a dealer. (f) ‘Goods’ include Shares and Securities. (g) When goods are sent by VPP, the sale is said to take place in the State from where the parcel is sent [5 x 2 = 10 marks]

Q. 6 Answer the following as per the CST Act, 1956: (a) Ansari and Co. transferred its goods from its factory at Cochin to its Branch at Mysore. Comment on the procedure to be adopted for branch transfer. (b) ABC Ltd. is located in Special Economic Zone. It wants to know the concessions or benefits under the CST Act. Advise. (c) Mr. A reports his turnover at Rs. 52,00,000 for the year ended 31/03/03. Also he reported that goods sold in March, 2003 have been returned by the customers to the value of Rs. 5,20,000 in May, 2003. He has not charged tax separately in the sale invoices. Assuming the tax rate @ 4% compute his tax liability under the Sales Tax Act. (d) X of Mumbai books his goods by air to his Branch Office at London. Subsequently, he transfers the documents of title to the buyer at Scotland after the goods have crossed the Customs Frontiers of India. Is this a sale in the course of export. OR  X, an Export House of Delhi, first enters into a contract of sale with Y of New York, USA and subsequently purchases these goods from Z of Chennai for the purpose of export to Y of New York. Is the sale by Z to X (last sale before export) be termed as sale in the course of export? [4+4+4+3 = 15 marks]

CA PE-II - May 2003 (25 marks portion relating to CST) New Syllabus

Q 5 (a) Discuss briefly about Central Sales Tax Appellate Authority u/s 19 of the CST Act (b) (i) M/s Snow White Ltd., Mumbai sells iron rods to M/s Hyderabad Ltd. in Vijaywada, both of them are registered dealers, for a value of Rs 10,00,000 inclusive CST @ 4%. The local sales tax on iron rods in Mumbai is 3%. Ascertain the CST payable. (ii) If Hyderabad Ltd. were unable to submit form ‘C’, being an unregistered dealer, what will be the CST liability, if the local sales tax rate is 12% ?  Note – Iron rods are not ‘declared goods’. (c) Discuss briefly about the liability of a company in liquidation under CST Act. [7+4+4 = 15 marks]

Q 6 State with reasons, whether the following is True or False under the CST Act – (a) Electricity supplied will not come within the meaning of ‘goods’ under CST Act (b) The supply of aviation spirit by a petroleum dealer from his depots at an Airport in India to an aircraft proceeding abroad is an export out of India eligible for exemption under CST. (c) In respect of declared goods, CST can exceed 4% for sales to Government (d) Weighment charges charged separately from buyers will not form part of sale price (e) To avail concession in CST, in respect of sales to registered dealers, form D is to be furnished by the dealer. [5 x 2 = 10 marks].

CA PE-II November 2002 (25 marks portion relating to CST) New Syllabus

Q 5. (a) What are the different declaration forms used in Central Sales Tax? State when and what purpose they are to be used? (briefly in two/three sentences for each form). (b) X sells his land along with the standing Crops and Trees for Rs. 20 lakhs. Sales Tax Officer wants to assess for Sales Tax the value of standing Crops and Trees. Comment. (c) X of Kolkata sells goods to Y of Chennai and delivers the same at Kolkata to MKS Transport. The Lorry receipt was sent to Y by post. While Goods were in transit, Y Sells the Goods to Z of Vijaywada by making an endorsement of LR and Goods were diverted to Vijayawada. Is the Second Sale between Y and Z chargeable to tax? (d) D of Delhi comes to Hyderabad and purchased certain chemicals and transported them in his own name to Delhi. Is the Sale chargeable to Central Sales Tax? (e) When is a duplicate certificate of Registration issued and how? [7+2+2+2+2 = 15 marks]