What is CGST and SGST?
- Blog|GST & Customs|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 5 May, 2021
Latest from Taxmann
What are the Components of GST?
1. CGST
Central Goods and Service Tax i.e. CGST will be payable to the Central Government for supplies of goods or services within the state.
2. SGST
State Goods and Service Tax i.e. SGST will be payable to the State Government for supplies of goods or services within the state.
3. UTGST
Union Territory Goods and Service Tax i.e. UTGST will be payable to Union Territory for supplies of goods or services within the Union Territory.
4. IGST
The Integrated Goods and Service Tax or IGST will be payable to Central Government for supplies of goods or services to other State or Union Territory i.e. inter-state supplies.
Tax Structure under GST:
An important aspect of GST is that both the CGST and SGST get levied simultaneously on every intra-state taxable supply of services and goods, except those that are exempted under GST and outside the purview of GST. Unlike VAT, both the taxes will be of the same amount. Let us take an example to understand the taxation model of CGST and SGST in a better way: Assuming GST rate is 5% i.e CGST Rate is 2.5% and SGST rate is 2.5%. A wholesale dealer in Pune supplies steel rods and bars to a company located in Mumbai for Rs 1,000, then the dealer would charge CGST of Rs. 25(Rs.1000*2.5%) and SGST of Rs. 25(Rs.1000*2.5%). Here, the revenue of CGST component will go to the Central Government, while the revenue of SGST will go to the Maharashtra State Government. For paying the CGST, the supplier can either use the input tax credit acquired from CGST or from IGST, on the other hand for paying the SGST, the supplier can either use the input tax credits acquired from SGST or from IGST. So, the input tax credit of SGST cannot be used for payment of CGST or vice-versa.
How to calculate CGST and SGST on goods/Services?
For calculating GST, you need to consider the “Taxable Price” and the applicable “GST Rate” (according to the type of transaction it can be either CGST rate and SGST rate or IGST rate). To perform the calculation, the formula is:
GST Amount = (Taxable Price X GST Rate) / 100
The invoice price is equivalent to the sum of the Taxable Price and the GST amount charged.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
