What is GST ?
The value added to products and services at each stage of the supply chain is subject to the GST tax. GST comes in four different forms: CGST, SGST, IGST, and UTGST. Each category has a distinct tax rate that applies to the buyer.
1. What is CGST ?
Central Goods and Services Tax is referred to as CGST. It took the place of all prior Central Government taxes. Central excise duty and central surcharges & cess are a couple of instances of these taxes. A state must collect CGST on every shipment of goods.
Let us look at an illustration to better grasp what CGST means.
Both SGST and CGST will be applied if a producer creates a product in West Bengal and sells it intrastate (inside the state). While the latter will end up with the Central Government, the former would go to the West Bengal State Government.
2. What is SGST ?
The State Government Sales Tax, or SGST, is the name of the GST that the State Government collects and is levied on purchases made inside its physical borders.
State Goods and Services Tax, or SGST, is a single tax imposed on intrastate supplies of goods and services, with the exception of alcoholic beverages. It may only be based on the transactional value of an item, which is the sum the customer must pay.
Due to the unique laws that each State Government has, SGST characteristics may differ from state to state. However, many traits, such as taxable occasions, valuation, categorization of products and services, and measurements, are uniform across the country.
3. What is IGST ?
Integrated Goods and Services Tax is referred to as IGST. It usually applies to transactions involving two distinct states, or interstate commerce. One of the different types of GST is imposed on the exchange of goods and services between states as well as on exports and imports (IGST plus customs).
With the help of an illustration, let us make this simpler.
Let us say a West Bengali firm offers products to a Maharashtrian client. In this scenario, the transaction amount will be subject to IGST. This money will be collected by the central government. Later, this payment will be split between the central government and the consumer state, in this example Maharashtra.
4. What is UTGST ?
Union Territory Goods and Services Tax, or UTGST, is a tax that is imposed on the sale of goods and services inside the Union Territories. The Andaman and Nicobar Islands, Lakshadweep, Daman Diu, Chandigarh, and Dadra and Nagar Haveli supply of goods are subject to this tax.
The UTGST only applies to Union Territories without a legislature, so keep that in mind.
In UTs, this tax, which is collected by the central government, takes the place of the state goods-and-services tax. The UTGST percentage is therefore comparable to the SGST percentage, which is 2.5 percent, 6 percent, 9 percent, and 14 percent.