CGST, SGST and IGST
Central Goods and Services Tax Act, 2017 (CGST):
CGST levied and collected by
Central Government. It is a revenue source to the Central Government of India, on
intra-state supplies of taxable goods or services or both.
Under GST, CGST is a tax levied on
Intra State supplies of both goods and services by the Central Government and
will be governed by the CGST Act. SGST will also be levied on the same Intra
State supply but will be governed by the State Government.
This implies that both the Central
and the State governments will agree on combining their levies with an
appropriate proportion for revenue sharing between them. However, it is clearly
mentioned in Section 8 of the GST Act that the taxes be levied on all
Intra-State supplies of goods and/or services but the rate of tax shall not be
exceeding 14%, each.
State Goods and Services Tax Act, 2017 (SGST):
SGST levied and collected by State
Governments/Union Territories with State Legislatures (namely Delhi and
Pondicherry) on intra-state supplies of taxable goods or services or both.
It is a revenue source of the
respective State Government.
Under GST, SGST is a tax levied on
Intra State supplies of both goods and services by the State Government and
will be governed by the SGST Act. As explained above, CGST will also be levied
on the same Intra State supply but will be governed by the Central Government.
Integrated Goods and Services Tax
Act, 2017 (IGST):
IGST is a
mechanism to monitor the inter-state trade of goods and services and ensure
that the SGST component accrues to the Consumer State. It would maintain the
integrity of ITC chain in inter-state supplies. The IGST rate would broadly be
equal to CGST rate plus SGST rate. IGST would be levied and collected by the
Central Government on all inter-State transactions of taxable goods or
services.
The revenue of
inter-state sales will not accrue to the exporting state and the exporting
state will be required to transfer to the Centre the credit of SGST/UTGST used
in payment of IGST.
1. Balachandran V - Indirect Taxes
2. ICAI - Indirect Taxes
3. ICSI - Indirect Taxes
4. ICMAI - Indirect Taxes
6. ClearTax.Com
7. Taxmann.Com
8. TaxGuru.Com
9. Quora.Com
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