Select Your Location
Table of Contents
Goods and Service Tax (GST) is a single inclusive tax for the entire country. The introduction of Goods & Service Tax replaced several indirect taxes in India, including the tax levied by Central Government on manufacture (Central Excise duty), provision of services (Service Tax), special additional duties of customs etc. Other than this the tax levied by State Governments on retail sales (VAT), Luxury Tax, entry of goods in the State (Entry Tax), etc. also fall under GST. GST further is divided into four types which include SGST, CGST, IGST, UTGST.
GST is charged on supply of goods or services or both at each stage of the supply chain from manufacture or import and till the last retail level. This means that all the taxes that were levied by the Central or State Government on the supply of goods or services fall under the umbrella of GST.
The introduction of GST is aimed at creating a single national market, common tax base, and common tax laws for States and the Centre. Other significant features of GST include the use of technology through Goods and Services Tax Network (GSTN), which helps in creating transparency in tax burden and improve the accountability of the tax administrations of Centre and State governments. In this blog we shall discuss in detail GST and its types including SGST, CGST, IGST and UTGST.
State Taxes replaced by introduction of GST:
Central Taxes replaced by the introduction of GST:
There are four types of GST, namely:
The applicability of SGST, CGST, IGST depend upon the locations of the supplier of the goods/services and that of consumers. Therefore, to determine the applicability of CGST, SGST and IGST it is important to know whether the taxable transaction is an Intra-State or an Inter-State supply.
Intra-State Transactions: In case of Intra-State transactions where the supply of goods happens within the same state, the seller collects both SGST and CGST from the buyer. SGST is deposited with the State Government whereas CGST gets deposited with the central Government.
Inter-State Transactions: In case of Inter-State transactions where the supply of goods happens between two different states, the supplier charges IGST. For an Inter-State transaction, a seller has to collect IGST from the buyer.
Following is the detailed explanation of SGST, CGST, IGST and UTGST:
First, let us understand what is Input Tax Credit?
The Input Tax Credit means while paying tax on the output (final product) one can reduce the tax already paid on inputs (purchase).
For example, you are a manufacturer, and you have to pay Rs 500 as the tax on output (final product), and you have paid Rs 300 as the tax on input (purchase). Here, you can claim Input Credit of Rs 300, and you will only have to pay Rs 200 in taxes.
Conditions to claim Input Tax Credit:
Input Tax Credit applies to the business activities registered under the GST Act, and only a registered taxable person is applicable to claim the benefit of Input Tax Credit of GST. Further, the registered person needs to fulfill the following conditions to claim ITC:
Some Important Points related to GST Input Tax Credit
Read our article:
Composition scheme under GST & Presumptive Taxation Scheme
A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Infrastructure and real estate have been regarded as India's "sunshine sector" since the turn o...
On 22nd May 2023, the Central Board of Direct Taxes (CBDT) issued a new circular under secti...
Are you human?: 1 + 3 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
GST Registration is necessary for those businesses that fulfil the eligibility criteria. However, there are times w...
18 Aug, 2021
In this article, we are going to talk about the registration requirements for NRIs under GST laws. But first, let�...
20 Jul, 2017
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!