Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It is a combination of multiple taxes like Central Excise Duty, Service Tax, State VAT, etc. The GST is comprised of the following components:
- CGST (Central Goods and Services Tax): This component of GST is collected by the Central Government on the supply of goods and services within a state. For example, if a taxpayer sells goods worth Rs. 100 and the CGST rate is 9%, then the CGST amount payable would be Rs. 9.
- SGST (State Goods and Services Tax): This component of GST is collected by the State Government on the supply of goods and services within a state. For example, if a taxpayer sells goods worth Rs. 100 and the SGST rate is 9%, then the SGST amount payable would be Rs. 9.
- IGST (Integrated Goods and Services Tax): This component of GST is collected by the Central Government on the supply of goods and services from one state to another. For example, if a taxpayer sells goods worth Rs. 100 in a different state and the IGST rate is 18%, then the IGST amount payable would be Rs. 18.
The total GST payable on a supply of goods or services would be the sum of CGST, SGST, and IGST, as applicable.
For example, if a taxpayer sells goods worth Rs. 100 within a state, and the CGST and SGST rates are 9% each, then the total GST payable would be Rs. 18 (9% CGST + 9% SGST).
It is important to note that GST rates vary for different goods and services and can range from 0% to 28%. It is the taxpayer’s responsibility to ensure that the correct GST rate is applied to the supply of goods and services and the correct amount of GST is paid to the government.
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