VAT or CST on O2C Transactions

HI Gurus,

We have a Business requirement to default the tax code on the Sales order line for an Item, if the item is sold with-in the state the VAT is applicable, if the same item is sold out of state then automatically CST related tax code should be defaulted.

Organization located in Maharashtra

Ex:- Item 'XXX'  sold in Mumbai then 12%VAT Code is applicable and If the same item 'XXX' sold outside the state then CST@ 2% is applicable.

Please advice on how to handle this requirement, Any document/standard out of box feature or workaround would be a great help