What is CGST?
Central GST or CGST would be levied under the CGST Act on the intra-state supplies of goods and services. Hence in case of intra-state supplies of goods and services, both the Central and State government would combine their levies with an appropriate revenue sharing agreement between them. The power to levy CGST and SGST has been provided for in Section 8 of the GST Act, where it has been mentioned that:
The following taxes shall be levied on all intra-state supplies of goods, or services or both, at such rates specified in the schedule to the said Act on the recommendation of the council, but not exceeding 14%, each. Such CGST and SCSt is to be paid by a taxable person.
Must check: All Sections of CGST Act 2017
What is SGST?
State GST or SCST is a tax levied under the SGST Act on intra-state supplies of goods and services, that is administered by the respective State Government. SGST lability can be set off against SGST or IGST input tax credit only.
What is IGST?
Integrated GST or IGST is the tax levied under the IGST Act on the supply of any goods and/or services in the course of inter-state trade across India. Further, IGST would include any supply of goods and/or services in the course of import into India and export of goods and/or services from India. IGST will replace the present Central State Tax which is levied on the interstate sales of goods. Thus, IGST would be applicable for all inter-state transactions, import and export of goods and/or services.
- GST 5% Item List, GST 5 Percent List in India
- GST 12% Rate Items List in India
- GST 18% Rate List, GST 18 Percent Item List in India
- GST 28% Item List, GST 28 Percent Rate list in India
How will input tax credits be adjusted between states and centre?
Suppose goods worth Rs. 10,000 are sold by manufacturer A in Maharashtra to Dealer B in Maharashtra. B resells them to trader C in Rajasthan for Rs. 17,500. Trader C finally sells to End User D in Rajasthan for Rs. 30,000.
Suppose CGST= 9%, SGST=9%. Therefore, IGST=9+9=18%
Since A is selling this to B in Maharashtra itself, it is an intra-state sale and both CGST @9% and SGST@9% will apply. B (Maharashtra) is selling to C (Rajasthan). Since it is an interstate sale, IGST@18% will apply. C (Rajasthan) is selling to D also in Rajasthan. Once again it is an intra-state sale and both CGST @9% and SGST@9% will apply.
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