AMIT BAJAJ ADVOCATE

Tax by State Governments on sales or purchase of goods made during the cource of import or export of such goods is prohibited by article 286(1)(b) of the Constitution of India. Section 6(1) of CST Act also levies tax on interstate sales hence there is no CST liability on the sale is the cource of import or export of goods. Thus neither the State Government can impose tax/vat on sales of goods in the cource of import or export nor CST Act 1956 imposes any tax on such sales. Here in this article exemptions available on Penultimate export sales under CST Act 1956 are concentrated on:

What is Export sales: The word Export sales means direct exports i.e direct selling of goods out of India. The word Export sales has not been used in the CST Act 1956 but the word sales in the cource of exports has been used which is a wider term and includes not only direct export but also sales by transfer of documents after goods cross customs frontier and the Penultimate sale for export and export with the help of agent. Thus even indirect export could also be sales in the cource of exports.