Multiple State Taxation

In Business to Business marketplace transactions, tax improvisation is an important aspect which is to be taken care by the seller and the buyer..

Concept of Sales Tax

In a marketplace solution, the marketplace admin acts as a facilitator between the seller and the buyer in the selling and the buying process.
The monetary transaction takes place from the buyer to the marketplace and then from the marketplace to the seller. The price of the product paid by the buyer is inclusive of all the taxes and no other taxes are to be paid by the buyer on that product.
When the payments are transferred by the marketplace to the seller, they charge a service tax on their commission earned by the seller which is predefined say 15%.
concept of sales tax
cst

Concept of CST

The concept of Central sales tax (CST) is applicable on sales which happens inter states i.e. the seller & the buyer both are present in two different states. In such a case, CST would be applicable on the product pricing.

Concept of LST/VAT

The concept of VAT/Local sales tax is applicable on sales within the same state. If the buyer and the seller both belong to the same state, then Local Sales Tax will be applicable on the sale of that item.
The LST is collected by the state government by the seller.
lst vat

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