The Goods and Service Tax is an indirect tax levied by the government of India on goods, services and wealth. It is a national tax that applies to almost all businesses established in India. Each business has to pay the appropriate amount of tax at the rate they choose to base on their net sales revenue or gross receipts. The GST is collected by the central government and then will be shared amongst various states after reaching a minimum threshold. Each state will receive a specific amount from this income. So far as business operations are concerned, there should be no change made to these systems as every single business is required to register under the GST regime before it opts for e –payments for its suppliers and customers respectively.
If you are doing business in India, chances are you’ve heard of the Goods and Service Tax (GST). It is yet another tax being imposed by the government on Indian citizens and businesses. In this article, we’ll talk about the various types of GST.
1. IGST – Integrated Goods and Services Tax (IGST)
The Integrated Goods and Services Tax (IGST) is a tax levied on both goods that are consumed in the course of any business or profession, and services rendered in connection with such business or profession. This tax is levied by the Central government at the rate of 15% for all business activities except those registered under the Securities and Exchange Board of India (SEBI). The IGST was introduced to promote inter-state trade and reduce the wastage of resources by providing a single market for goods and services.
2. SGST- State Goods and Services Tax (SGST)
The State Goods and Services Tax (SGST) is levied on all goods and services consumed within the state where supply was made. It is calculated based on the total value of goods and services consumed in a particular state during a particular period. The GST returns for each state will be filed by registered dealers and suppliers who earn their revenue from supplying goods or providing services within that state only. State Goods and Services Tax (SGST)
The State Goods and Services Tax (SGST) is levied on all goods and services consumed within the state where supply was made. It is calculated based on the total value of goods and services consumed in a particular state during a particular period. The GST returns for each state will be filed by registered dealers and suppliers who earn their revenue from supplying goods or providing services within that state only.
3. CGST – Central Goods and Services Tax (CGST)
Central Goods and Services Tax (CGST) is a kind of indirect tax levied by the government on the inter-state movement of goods. This tax is collected by the central government and is paid by the seller.
Union Territory Goods and Services Tax (UTGST) is an indirect tax levied on the goods and services rendered in union territories. The Union territory goods and services tax was introduced as a single rate of tax to eliminate cascading effects on goods of similar nature, hence reducing the compliance burden and financial cost on businesses engaged in union territories This however is one of the biggest advantages of GST which has made it so favourable for the business ecosystem of the country.
