Gst types

One Tax || One Nation || One Market…!!!

Yes, we can definitely say this that GST is a reason behind the increase in India’s GDP.

Do you want to know why I am saying this?

Note: It’s translucent clear that GST is something which is compulsory these days. Yeah, if you run a business then GST is a must.

So, what I suggest is – take a wise step and join an attorney that can assist you with the full GST working, registration and all. In an address to this, I will suggest you go with the — LeadingFile || Business Leading Innovation service of GST Registration. Avail the service by clicking the same anchor text.

The true purpose of the PM Mr. Narendra Modi is to make India the top country in the world. Therefore this is the reason some really important decisions are taken for the development of India. If we talk about the major decisions one of them is implementing GST.

In addition, India is seeing the major growth in the future by 2030. This forecasting is done by the World Bank.

Now let’s have a piece of knowledge on GST.

GST: Try & Understand Goods and Services Tax

GST is the biggest tax reform in the history of the Indian economy. This tax system evacuates other taxes like Value Added Tax (VAT), excise duty, service tax, customs duty, and other taxes.

However, GST was introduced in India in 1986 but, it was implemented on 1st July 2017.

Moreover, GST is gaining popularity day by day because now people just need to pay one tax only i.e — GST.

This is true that people need to pay one tax only once but the goods and service tax is imposed on every level of purchase of goods.

Yeah, you heard right.

Eighter the purchase done by a manufacturer or the customer GST will impose on every level on the consumption of goods.

In addition, GST is introduced with 5 slabs 0%, 5%, 12%, 18% and 20%.

Although, every product and services are categorized in these slabs, only/-

Well, other than the slabs the GST is also classified into the following components. Have a look…

Components Of GST: A Division To Make GST Broad

GST is divided into 4 different categories, elaborated as follows:

CGST (Central Goods and Service Tax),
SGST (State Goods and Services Tax),
IGST (Integrated Goods and Services Tax), and
UTGST (Union Territory Goods and Service Tax).

Before getting into the depth of GST types, Let’s have a look on – why they are implemented, as follows;

Why CGST, SGST, IGST is implemented?

Before elaborating this, let me show you an instance: Do you know by what a car moves? Ease: petrol or diesel.

All right, similarly, there should also be a thing by what the government performs its functions. Right?

It is nothing else but the “TAX”.

Yes, the tax – which this time is GST; a single tax collected in the whole country.

To this only, both the central and state government is depending on GST for their tax revenue and functioning.

Also, this is the only reason why GST is implemented. Especially in two-phase: one for CGST and another for SGST.

Furthermore, citizens of the country will pay one tax on every purchase of goods which is imposed at every level. Because the sale and purchase activity is done within and/or outside the state.

Do you have knowledge about inter-state and intra-state?

If not then we must know about intra-state and inter-state first, before discussing GST types.

Now coming to the Intra State of goods – It is when the location of a buyer and supplier is at the same place or within the state then this comes under the intra-state.

Moreover, a seller has to collect CGST and SGST. So, both central and state governments will be able to receive tax revenue under GST.

The Inter-State of goods – it is when the seller location and the buyer location are in two different states. Also, this implies with export and import of goods. When this supply of goods and services made from one state to another then the transaction is assumed to be the inter-state transaction. In this case, a seller will collect IGST tax from the buyer.

I hope now you understood why CGST, SGST, and IGST are implemented.

Now, Let’s discuss the types of GST.

CGST — Central Goods & Services Tax

Central goods and services tax comes under GST, it is a levied on the intra-state transactions of goods and services. The same thing also applies to the state goods and services tax (SGST).

And, the central and state government must agree to divide their levies on an appropriate proportion to share the revenue between them.

Note: In the GST section 8 act it is clearly mentioned that the taxes to levied must not exceed 14% on all the intra-state supply of goods & services.

State Goods and Services Tax

SGST is similar to CGST, SGST also levied on the intra-state transactions of goods and services. Both CGST and SGST comes under intra-state supplies.

And they must share the appropriate proportion of tax revenue among them.

Let’s take an example: A dealer in Rajashthan sells goods to the consumer of Rs 15000. The GST rate is 18%. Which is equally divided — 9% for the central government and for state government as well — 9%.

Note: Any liability that comes under SGST can be set off by SGST or IGST.

Integrated Goods and Services Tax

The IGST tax is implied on inter-state goods and services which is governed under the IGST Act. It is also applicable to the import and export of goods in India.

Let’s take an example of it.

A dealer sells goods from Punjab to Delhi which is of Rs 1,00,000/-. The GST rate is 18% including 18% of IGST. In this case, the seller has to charge Rs 18000/- as IGST.

Union Territory Goods and Services Tax

A separate tax was introduced for union territory status to impose and start GST in India with UTGST. In UTGST Act the details of goods and services tax amount to be pay against the movement of goods and services in union territory are mention.

The union territory tax only applies to the few territories of India that is Andaman & Nicobar Islands, Chandighar, Dadra and Nagar Haveli, Lakshwadeep, and Daman Diu.

It’s the same as GST but this only applies to the India territory that’s why it is named as Union Territory Goods and Service Tax.

Conclusion
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