Basic overview of CGST, SGST, IGST and UTGST

Under GST, the Central Government collects CGST, SGST or IGST which is depend upon if the transaction is intrastate or it is interstate. On the off chance that the inventory of labor and products is being done inside the state then it is called as intra-state supply, and for this situation CGST and SGST will be gathered. Though if the inventory of labor and products is being done between two states then it is called as between state supply, and for this situation IGST will be gathered.

It is an important part to be noted that GST is destination based tax and it is collected by the state where goods is being consumed and not by the state where the goods are being manufactured. There were multiple taxes before GST such as Central Excise, Service Tax and State VAT etc. whereas under GST there is only one tax with three different components i.e., CGST, SGST and IGST.

WHAT IS CGST?

CGST is Central Goods and Services Tax, and it is forced on the inventory of intra-state on the two labor and products by the Central Government and will be control by the Central Goods and Services Tax Act. SGST is also imposed on the Intra-state supply but it is controlled by the State Government.

This indicates that both the Central and State Government have to be agreed upon on collecting the taxes with an appropriation proportion between them. Even so, it is mentioned in the Section 8 of the Goods and Service Tax Act that the taxes which is imposed on all the intra supplies of goods and services and it shall not be more than 14% each.

WHAT IS SGST?

SGST is State Goods and Services Tax, it is the tax imposed on Intra-state supplies of goods and services which is collected by State Government and will be controlled by State Goods and Service Tax Act. As we discussed above on intra-state supply CGST will also be applicable but CGST will be controlled by the Central Government.

If there is any tax liability under SGST then it can be set off in opposition to SGST or IGST ITC only.

WHAT IS UTGST?

Same as how SGST is imposed by the State Government on the supply of goods and services which is Intra-state supply, UTGST i.e. Union Territory Goods and Service Tax is imposed by the Union Territory Government. It is the tax which is imposed on the supply which is done by Union Territory of goods and services. It is controlled by the UTGST Act and it is also imposed together with CGST.

UTGST is applicable on the supplies which is made to the Union Territories of Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman Diu and Lakshadweep. Delhi and Puducherry will not fall under UTGST but will fall under SGST.

WHAT IS IGST?

IGST is Integrated Goods and Service Tax, and will be imposed on the supplies which is made between two states which is called as Inter-state supplies of goods or services. IGST will be controlled by the IGST Act. IGST is applicable in both cases of any supply of goods or services if it is importing into India or exporting outside India.

Under IGST, the exports are zero-rated and the tax will be collected by both the Central and State Government.

Authored by Adv Shivam Kumar