What is GST

                                 GST( Goods and Service Tax)

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017. GST is one indirect tax for the entire country. GST Law has replaced many indirect tax laws that previously existed in India.

There are 3 taxes applicable under GST

• CGST: Collected by the Central Government on an intra-state sale (Eg: Within Delhi)
• SGST: Collected by the State Government on an intra-state sale (Eg: Within Delhi) 
• IGST: Collected by the Central Government for inter-state sale (Eg: Delhi to Mumbai)

·        How CGST, SGST and IGST will apply

Let us consider goods manufactured in Delhi and sold to the final consumer in Mumbai. Because (GST) is levied at the point of consumption, in this case the entire tax revenue will go to Centeral Goverment.

Before and After Indirect tax

Sale Of Goods	Indirect tax Before	Indirect Tax After (GST)
Sale within the state	VAT, Service tax, Central Excise	CGST @9%+ IGST @9%
Sale to other state	CST @ 2%	IGST@18%

Rate of CGST and SGST depend on the GST rate of that particular Goods i.e the Rate of GST is equally divide into CGST and SGST. If GST is 12% then SGST= 6% and SGST= 6%.  

Example of IGST: 

• Suppose that a dealer of Uttarakhand had sold the goods to a dealer in Delhi worth Rs. 1,00,000/-. The GST rate is 18% comprising of only IGST.

In such case, the dealer has to charge Rs.= 100000*18%= 18000/- as IGST. This IGST revenue will go to the Central Government.


Example of SGST and CGST:

• The same dealer sells goods to a consumer in Punjab worth Rs. 50,000. The GST rate on that good is 12%. This rate comprises of CGST at 6% and SGST at 6%.

The dealer has to collect Rs. 6,000 GST tax. As the GST Rs. 6000/- Collected by the dealer, he will pay Rs. 3,000 will go to the Central Government and Rs. 3,000 will go to the Punjab government as the sale is within the state.

GST Council Decision:-

Some of the major decisions taken by the GSTC:

         There would be four types of tax rates under the GST regime, i.e., 0%, 5%, 12%, 18%, and 28%. 

          28% Tax would be levied on certain sin and luxury goods.

        The administrative control over 90% of taxpayers with turnover less than Rs.1.5 crore would be with the State tax administration. 10% of control would be with the Central tax administration.

         Administrative control over taxpayers having turnover above Rs.1.5 crore would be equally divided between the State and Centre tax administration.