Former state taxes including VAT, octroi, luxury tax, purchase tax, and central taxes like customs duty, central excise duty, and service tax are all incorporated into the GST. Now, under the one-nation, one-tax system, a straightforward three-fold breakdown has been developed, enabling the federal government and the states to impose taxes.
Types of GST and its Explanation
There are four main forms of GST, according to the recently introduced tax system:
Integrated Goods and Services Tax (IGST)State Goods and Services Tax (SGST)Central Goods and Services Tax (CGST)Union Territory Goods and Services Tax (UTGST)
Additionally, the government has fixed different taxation rates under each, which will be applicable to the payment of tax for goods and/or services rendered.
The purpose of levying the Goods and Services Tax (GST) was set or settled at Rs. 20 lakh. But in some circumstances i.e. for special category States, the lower limit is fixed at Rs. 10 lakh. All of the small suppliers were covered in the Goods and Services Tax (GST). It was noted that many suppliers had voluntarily and purposefully registered themselves in order to take advantage of all input tax credit benefits.
SGST or state goods and services tax
On intrastate (inside the same state) transactions, the State Goods and Services Tax, or SGST, is a tax under the GST framework. Both State GST and Central GST are imposed in the event of an intrastate supply of goods and/or services.
However, the state imposes the State Goods and Services Tax (SGST) or GST on any goods or services that are bought or sold within the state. The SGST Act controls it. The corresponding state government is the only one who can claim the GST money.
For instance, the GST applicable on the transaction will be partially CGST if a merchant from West Bengal sold items to a consumer in West Bengal for Rs. 5,000.
The term “IGST” stands for the Integrated Goods and Services Tax, a component of GST that operates under the “one nation, one tax” principle.
It falls under the Integrated Goods and Services Tax Act of 2017, and it is one of the three different sorts of taxes.
It is assessed on the supplies of commodities and services between states.
The characteristics of IGST IN GST are CGST Plus SGST.
According to the IGST model, the center will tax interstate supplies of goods and services at a rate roughly equivalent to CGST plus SGST.
It is a tax with a destination and will be paid by the importing state.
By just taxing Inter-State transactions once, the tax burden will be reduced
In B2B transactions, the state where the purchaser claims an input tax credit will get the tax. B2C transactions: tax implications
The UTGST, or Union Territory Goods and Services Tax
The State Products and Services Tax (SGST), which is imposed on the supply of goods and/or services in the Union Territories (UTs) of India, is mirrored by the Union Territory Goods and Services Tax, or UTGST.
In the Andaman and Nicobar Islands, Chandigarh, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep, products and/or services are subject to the UTGST. The UTGST Act controls the UTGST. The Union Territory government is in charge of collecting the UTGST revenues. In Union Territories, the SGST is replaced by the UTGST. As a result, in Union Territories, the UTGST will be imposed in addition to the CGST...