|Sales Tax is a consumption tax levied on the purchase or sale of movable goods. Sales tax is again divided into two kinds- sales tax imposed by the state and central Sales Tax, imposed by the Centre. Central sales tax is generally payable on the sale of the goods by the dealers in the course of inter-state commerce or trade the course of export or import from India or outside a state.
Sales tax comes with a high compliance rate and is difficult to avoid. It is simple to calculate and collect and is charged once on any one item. However, in most of the Indian states, sales tax has been replaced with value added tax (VAT) that is imposed on goods only and not on services.