gst tax

goods and services tax

State GST (SGST)

The GST to be levied by the State on intra-State supply of goods and/or services  is State GST (SGST).

Central GST (CGST)

The GST to be levied by the Centre on intra-State supply of goods and/or services is Central GST (CGST)

Integrated GST (IGST)

On inter-state supply of goods and services, Integrated GST (IGST) will be collected by Centre.

imports

On imports supply of goods and services, Integrated GST (IGST) will be collected by Centre.

GST is a consumption based tax

GST is a consumption based tax i.e. the tax should be received by the state in which the goods or services are consumed and not by the state in which such goods are manufactured. IGST is designed to ensure seamless flow of input tax credit from one state to another. One state has to deal only with the Centre government to settle the tax amounts and not with every other state, thus making the process easier.

For e.g.: – A dealer in Maharashtra sold goods to the consumer in Maharashtra worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%, in such case the dealer collects Rs. 1800 and Rs. 900 will go to the central government and Rs. 900 will go to the Maharashtra government.