Source: http://blog.amitbajajadvocate.com/2010/02/summary-on-declared-goods-under-cst-act.html
Timestamp: 2019-04-26 14:43:58+00:00

Document:
Declared goods are the goods of special importance on which there are certain restrictions placed under CST Act 1956 on imposition of sales tax or VAT by the states. Article286(3)(a) of the Constitution of india authorises parliament to declare some goods as of special importance and to impose restrictions and conditions in regard to power of the states in regard to levy, rates and other incidence of tax on such goods. Exercising this power the Parliament vide section 14 of the Central Sales Tax Act 1956 has declared some goods as of special importance and has placed restrictions u/s 15 of CST Act on the imposition of sales tax or VAT on such goods by the state Governments.
DEFINITION: Section 2(c) of CST Act defines Declared Goods as those declared u/s 14 of the CST Act as Goods of special importance in inter state trade or commerce.
(i) cereals i.e -paddy, rice, wheat,Jowar,bajra, maize, barley etc.
(iic) crude oil, that is to say, crude petroleum oils and crude oils etc.
(viii) sugar and Khandsari Sugar.
CAST IRON CASTING: cast iron castings have been held as declared goods by the honurable Supreme court in Vasantham Foundry v. UOI- AIR 1995 SC 2400. In this case it was decided that cast iron castings in its basic rough form is cast iron and hence is declared goods.
GI PIPES, PIPES AND PIPE FITTINGS ARE DECLARED GOODS: GI pipes have been held as declared goods by sureme court in Gujarat Steel Tubes Ltd. v. State of kerala (1989) 74STC 176(SC) and also in Mahesh Enterprises v. State of AP (2000) 119 ATC 578 (AP HC DB).
Pipes and pipe fittings have been held as Declared Goods (1987) 65 STC 465 (All).
COAL ASH/COAL SLURRY- In Arif Transport v. CTO(1999) 116 STC 207(Karn HC) coal ash was held to be including Coal as well as In Chandrama coal products v. State of Bihar (1999) 115 STC 639(Pat HC DB) where the coal slurry and sludge is held to be a form of coal and held as declared goods.
Item (ia) states: Coal, including coke in all its form but excluding Charcoal. Thus all types of coke are covered under this category. Petroleum coke has also been held as declared goods in India Carbon Ltd. v. Supt of Taxes(1971)28 STC 603(SC).
RIM OF WHEEL IS DECLARED GOODS: Rim of Cycle wheel has been held as declared goods in Dewan Enterprises v. CST AIR 1996 SC 2029.
SUGAR IMPORTED FROM ABROAD- Sugar imported from outside India is also declared goods- Prime Impex v. ACCT (2002) 127 STC 23 (CAL HC DB).
2. Reimbursement of local tax if declared goods are sold interstate: It has been provided u/s 15(b) of CST Act that if the Declared goods which are purchased from within a state or in other words on which intra state tax i.e local tax has been paid and those Declared goods are sold interstate then the local tax paid on such goods shall be reimbursed to the person making such interstate sale.
b. If interstate sale of goods are exempt from tax, no refund of tax paid on Intra state sale is available.
c. The word used is Reimbursement Thus the tax on local sale must have been paid.
It means that no adjustment of local tax paid at the time of purchase of declared goods is available against the CST payable on inter state sale of such goods. Since the word used is Reimbursement and not adjustment. Assume that a person purchases declared goods in the state for Rs 10400 on which he has paid local tax @ 4% Rs. 400. Later on he sells such goods in the inter state sale for Rs. 11000 and charge CST @ 4% i.e RS. 440. Now he cannot claim adjustment of the tax paid at local leval against the CST to claim that he will pay only RS. 40. The person will have to deposit CST of Rs 440 before claiming Reimbursement of the local tax. as it has been held in Dhanji Kalyanji & co. v. State of Karnatka (1978) 42 STC 272.
In Tata Iron & Steel co Ltd. v UOI 2000 AIR SCW 4514, it was held that reimbursement presupposes previous payment.
3. Before Taxation laws (Ammendment) Act 2007 section 8(2)(a) of the CST Act 1956 provided that if declared goods are sold to unregistered dealer in the cource of interstate sale , the CST rate will be twice the rate applicable in case of local sales. But after the ammendment in section 8 of CST in year 2007 the sub section 2 of section 8 has been replaced.
Now the state rate of tax is applicable to the turnover of any dealer in so far as the turnover or any part thereof relates to the sale of goods in the cource of interstate trade or commerce not falling within Section 8(1). Now section 8(2) doesnot make any difference between the Declared goods and other goods so far the rate of CST is concerned while making interstate sale to the unregistered dealer outside the ambit of section 8(1).
SPECIAL PROVISIONS ABOUT PADDY & PULSES: If Paddy is taxed within state and rice is also taxed then tax paid on Paddy should be given set off while levying tax on rice(Section 15(c). It means that the adjustment of local tax paid on paddy at the time of purchase can be set off against the tax payable on sale of Rice produced from the paddy.
If the rice produced from the paddy purchased is to be exported then the paddy and the rice shall be treated as same goods for the purpose of section 5(3) of CST Act. It means the Paddy can be purchased without payment of local tax if the rice produced from it are to be exported out of India.

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