What is GST?
The GST is a single taxation system that is charged on goods and services from the producer to the consumer. It is integrated with the structure of the standardized market, decreasing organizational complexness and facilitating the indirect tax system. Join GST Training in Chennai at FITA Academy offers worthy certification training with 100% placement assistance.
GST is intended to lower government expenses, resulting in increased revenue efficiency. A range of external factors is projected to contribute to the additional revenue rise. Here in this blog, we describe the types of GST.
Types of GST:
IGST:
The IGST (Integrated Goods and Services Tax) is levied on the interstate supply of goods and services. The Central Government is responsible for collecting taxes under the IGST system. After collection, the tax is divided among different states based on their respective share. This tax is applied when goods or services are transported between states. Typically, a GST of 18% is levied on the products, which helps streamline the taxation process for interstate transactions. IGST is one of the most important components of the GST system to ensure smooth trade and commerce between states.
SGST:
SGST (State Goods and Services Tax) is applicable when goods or services are supplied within a single state. When a business in one state sells goods to a buyer in the same state, SGST applies along with CGST (Central Goods and Services Tax). Both SGST and CGST are each levied at a rate of 9%, making the total tax rate for intra-state transactions 18%. The revenue generated from SGST is claimed by the state government where the transaction takes place. This structure helps create a balanced tax system and supports the fiscal health of the state.
In addition to traditional businesses, SGST also has a significant impact on the e-commerce and online retail industry. GST Impact on E-commerce and Online Retailers has led to a streamlined taxation process, ensuring that online businesses comply with tax regulations in a more efficient manner. As e-commerce transactions often involve multiple states, understanding the proper application of SGST and other GST components is crucial for businesses operating in this space.
CGST:
CGST (Central Goods and Services Tax) is collected by the Central Government on intrastate transactions. This tax is applicable when the supply of goods or services takes place within the same state, and it is applied alongside SGST. For instance, if a dealer in West Bengal sells products worth Rs.5,000 to a customer in the same state, an 18% GST will be levied, with 9% allocated to CGST and 9% to SGST. The revenue from CGST contributes to the central government’s fiscal budget. Understanding CGST and its applications is crucial for anyone entering the field of taxation and finance. Excel Training in Bangalore can be a great addition for those looking to enhance their skills in handling CGST and other tax-related calculations using Excel’s powerful data management tools.
UTGST:
UTGST (Union Territory Goods and Services Tax) is similar to SGST but applies in India’s Union Territories (UTs). It is charged on the intrastate supply of goods and services in UTs and is levied along with CGST. The UTGST rate is identical to SGST and is designed to cater to the unique taxation needs of Union Territories. The revenue generated from UTGST is claimed by the Union Territory, ensuring their economic growth. The Tally Course in Bangalore can help you gain practical knowledge of UTGST, equipping you with the necessary skills to navigate taxation in Union Territories.
Also Check: How to Generate E-Way Bill for GST?