GST Registration :
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Goods and Services Tax (GST) is a destination based tax on consumption of goods & services. It is levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. Only value addition will be taxed and burden of tax is to be borne by the final consumer. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.
Goods and Services Tax (GST) is an indirect tax (or consumption tax) levied in India on the supply of goods and services. GST is levied at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer.
The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Indian government. The tax replaced existing multiple cascading taxes levied by the central and state governments.
Unlike earlier when there were multiple taxes such as Central Excise, Service Tax and State VAT etc., under GST, there is just one tax. GST is categorized into CGST, SGST or IGST depending on whether the transaction is Intra-State or Inter-State.
The three type’s tax structure is implemented to help taxpayers take the credit against each other, thus ensuring “One Nation, One Tax”.
To determine whether Central Goods & Services Tax (CGST),State Goods & Services Tax (SGST) or Integrated Goods & Services Tax (IGST) Will be applicable in a taxable transaction, it is important to first know if the transaction is an Intra State or an Inter-State supply.
Intra-State supply of goods or services is when the location of the supplier and the place of supply of the buyer are in the same state. In Intra-State transactions, a seller has to collect both CGST and SGST from the buyer. The CGST gets deposited with Central Government and SGST gets deposited with State Government.
Inter-State supply of goods or services is when the location of the supplier and the place of supply are in different states. Also, in cases of export or import of goods or services or when the supply of goods or services is made to or by a SEZ unit (Special Economic Zone), the transaction is assumed to be Inter-State. In an Inter-State transaction, a seller has to collect IGST from the buyer.
Central Goods and Services Tax (CGST)
Under GST, CGST is a tax levied on Intra State supplies of both goods and services by the Central Government and will be governed by the CGST Act. SGST will also be levied on the same Intra State supply but will be governed by the State Government.
This implies that both the Central and the State governments will agree on combining their levies with an appropriate proportion for revenue sharing between them.
State Goods and Services Tax (SGST)
Under GST, SGST is a tax levied on Intra State supplies of both goods and services by the State Government and will be governed by the SGST Act. As explained above, CGST will also be levied on the same Intra State supply but will be governed by the Central Government.
Note: Any tax liability obtained under SGST can be set off against SGST or IGST input tax credit only.
Integrated Goods and Services Tax (IGST)
Under GST, IGST is a tax levied on all Inter-State supplies of goods and/or services and will be governed by the IGST Act. IGST will be applicable on any supply of goods and/or services in both cases of import into India and export from India.
Note: Under IGST, Exports would be zero-rated. Tax will be shared between the Central and State Government.