GST is a multifaceted phenomenon from the gst compensation cess to the GST council, there are multiple things you need to be aware of when it comes to one of the biggest tax reforms of the country. One of the biggest aspects of GST is the different types of GST. Knowing the different types of GST can help businesses save money and avoid penalties. In this article we are going to discuss the different types of GST at length and its ramifications for different businesses. So you may learn for yourself how your company will be affected by which type of gst. So let’s get started.
- SGST
State Goods and Services Tax (SGST) is levied by state governments on certain goods and services consumed in their jurisdiction, including those imported from outside the state, subject to a ceiling limit imposed by the Central government. The State GST (SGST) applies to all goods and services supplied by a registered person in any state of India to another registered person in any other state of India. The SGST rates vary from state to state depending on the fiscal policy adopted by respective states. The SGST is governed by the SGST act and it is levied on all the goods and services sold or purchased inside a state. It is collected by the state government.
- IGST
Integrated Goods and Services Tax (IGST) is a tax levied on the inter-state movement of goods, capital and services. It was introduced in India from 1st April 2017. This new tax will replace all other taxes, including: central excise duty, state VAT, state sales tax and entry tax.
The IGST will replace all existing indirect taxes such as central excise duty, state VAT, state sales tax etc. It will be levied on inter-state supply of goods or services. The IGST rate is 18%.
The IGST will be levied on all transactions involving interstate movement of goods, including imports and exports, interstate supply of services like transport and communication etc., allocation of assets between businesses for transfer purposes and payment of consideration for job work done by an employee in another state. It is collected by the central government
- UTGST
Union Territory Goods and Services Tax (UTGST) is a tax levied by the Government of India on all goods and services sold in UTs. Hence it is essentially the counterpart of STGST but spepcifically for union territories. The UTGST act governs the UTGST and the revenue from this tax is collected by the union territories. Since it is a replacement of SGST it will be levied in addition to CGST.
- CGST
Central Government Sales Tax levied by the Government of India for the entire Indian territory on goods and services at the rate of 12% (or 18% for e-commerce transactions). The State Government may levy a local cess on such goods or services in addition to central GST to meet its share of expenditure. This tax is levied at the central level, and is applicable on all intra state movement of goods. It is levied along with SGST or UTGST depending on whether it is being levied in a union territory or a state. It is collected by the central government. The rules and regulations about different types of GST are continually changing. Hence as a business owner you should be always updated about the latest amendment to CGST rules.