Types of GST
A small guide on different types of GST
In this post, we will discuss the Types of GST and their Applicability. Let’s look at each section in detail :
What is GST ?
Goods and Services Tax (GST) is a single, comprehensive tax on goods and services within a country. It is included in the final product price. Customers pay for the product with GST included, and businesses send the GST portion to the government. The Central Government of India imposes this tax, and for intrastate transactions, the tax is divided between the central and state governments as CGST and SGST.
Different Types of GST in India
India’s tax system has been simplified and strengthened by introducing various types of GST. Different GST percentages have simplified India’s tax system, helping taxpayers conduct business more efficiently. Let’s look at those in detail :
1.Integrated Goods and Services Tax (IGST) and its Applicability
State Goods and Services Tax (SGST) is levied on the sale of goods and services within a state. The SGST rate varies from 0% to 28% and is collected by the relevant state government.
2.State Goods and Services Tax (SGST) and its Applicability
State Goods and Services Tax (SGST) is levied on the sale of goods and services within a state. The SGST rate varies from 0% to 28% and is collected by the relevant state government.
3.Central Goods and Services Tax (CGST) and its Applicability
The Central Goods and Services Tax (CGST) applies to goods and services that are transported across states. The Central Government collects CGST, and the rate can range from 0% to 28%.
4.Union Territory Goods and Services Tax (UTGST) and its Applicability
The Union Territory Goods and Services Tax (UTGST) applies to goods and services transactions in a Union Territory. The UTGST collected by the Union Territory Government varies from 0% to 28%.
Difference Between Types of GST
The four types of GST percentages (CGST, SGST, UTGST, and IGST) change according to where they are imposed and who collects them. State and central governments collect SGST and CGST on products and services sold inside their states.
IGST, which the central government collects, applies to products and services that move between states. Union Territory governments collect UTGST on supplies inside their territories. GST rates range from 0% to 28% and depend on the kind of product or service.
Who is Liable to Pay GST?
- GST applies to all individuals, businesses, partnerships, limited liability partnerships (LLP), and other entities that offer goods or services.
- Most states require enterprises with a yearly income of more than ₹40 lakhs (for items) or ₹20 lakhs (for services) to pay GST. The threshold limit is ₹ ten lakhs for specific categories in states and northeastern states.
- Individuals who produce, sell, or distribute goods and services must register for GST.
- E-commerce enterprises that offer items or services through their platform are also liable to GST.
- Under the reverse charge system, the buyer is responsible for paying GST rather than the supplier.
Goods Exempted from GST Payment
Essential food items, such as fresh fruits and vegetables, cereals, meat, fish, milk, eggs, healthcare, and educational services, are excluded from GST in India. Certain government services, book categories, and agricultural items are excluded from GST payments.
To know more about the list of goods exempted from GST, read our blog: GST exempted list
We have concluded this post on different types of GST. Feel free to share your views and opinions in the comment section below.
FAQs
1. What are the different types of GST that are now applicable?
Ans: The present GST kinds are UTGST, CGST, SGST, and IGST.
2. Who collects the CGST?
Ans: The Central Government collects the CGST money.
3. Who collects the IGST?
Ans: The central government collects the IGST money.
4. Who collects the SGST?
Ans: The State Government collects SGST.
5. Who collects the UTGST?
Ans: The Union Territory Government collects the UTGST amount.
