Generalized GST queries

General
1

What are the differences between CGST, SGST, and IGST?

2

Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST) are components of the Goods and Services Tax (GST) system in India. They are different types of taxes that are levied to ensure a comprehensive and integrated indirect tax structure. Here are the key differences between CGST, SGST, and IGST:

  1. Nature of Tax:
  • CGST (Central Goods and Services Tax): Collected by the Central Government on intra-state supplies (transactions within the same state).
  • SGST (State Goods and Services Tax): Collected by the State Government on intra-state supplies (transactions within the same state).
  • IGST (Integrated Goods and Services Tax): Collected by the Central Government on inter-state supplies (transactions involving movement of goods or services from one state to another).
  1. Applicability:
  • CGST and SGST: Applicable to transactions that occur within a single state. For example, if goods are sold within Maharashtra, both CGST and SGST will be levied.
  • IGST: Applicable to transactions involving the movement of goods or services between states. It is a combination of CGST and SGST and is typically levied at the destination state.
  1. Collection and Distribution:
  • CGST and SGST: Collected and administered by the respective governments (Central or State) for intra-state transactions. The revenue collected goes to the respective government.
  • IGST: Collected by the Central Government for inter-state transactions. The tax is then apportioned between the Central and State Governments based on the destination principle.
  1. GST Rate:
  • The rates for CGST and SGST are usually the same and are decided by the GST Council. Each state may have its own SGST rate.
  • IGST is calculated as the sum of CGST and SGST rates, ensuring that the total tax on inter-state transactions is equivalent to the tax that would be levied on intra-state transactions.
  1. Input Tax Credit (ITC):
  • CGST and SGST: ITC can be claimed against the respective tax (CGST against CGST and SGST against SGST).
  • IGST: ITC can be claimed against both CGST and SGST liabilities.
  1. Invoicing and Returns:
  • CGST and SGST: Invoicing and return filing are done separately for CGST and SGST for intra-state transactions.
  • IGST: Invoicing and return filing are done for IGST in the case of inter-state transactions.