Since GST is a destination based tax, an end user consuming any goods or services is liable to pay the Goods and Services Tax. The tax is received by the State in which the goods or services are consumed and not by the state in which such goods are manufactured. In cases of exports, the seller of the goods or services is exempted from paying the tax.
1. Central Good and Service Tax
CGST is a tax that is levied and collected by the central government under the new regime. It has subsumed the various taxes like service tax, excise etc. It can be levied only on intra-state transaction undertaken. Also, a taxpayer is required to obtain GST registration and pay CGST only if his threshold limit exceeds Rs. 10 Lakhs in North Eastern states and Hill Stations while Rs. 20 Lakhs in other places. In addition to this, a taxpayer is given an option to opt for composition scheme and pay a standard rate of 1% as CGST.
2. State Good and Service tax
SGST is a tax that is levied and collected by the state government under the new regime. It will subsume the various taxes like luxury tax, entry tax etc. Further, it can only be levied on inter-state transactions undertaken. Also, a taxpayer is required to obtain GST registration and pay SGST only if his threshold limit exceeds Rs. 10 Lakhs in north eastern states and hill stations while Rs. 20 Lakhs in other places. In addition to this, a taxpayer is given an option to opt for GST Composition Scheme and pay a standard rate of 1% as SGST.
3. Integrated Good and Service Tax
IGST is a combination of both CGST and SGST and it is levied by the central government. Many provisions applicable to IGST differ from the provisions applicable to SGST and CGST. Like the integrated good and service tax is levied only on the inter-state transactions. Also, the suppliers who undertake the inter-state supply are required to obtain GST registration irrespective of the amount of turnover. Further, they are not eligible to opt for composition scheme.
4. Union Territory Goods and Services Tax.
The fact that Union Territories are directly under the governance of the Central Government, differentiates them from the states, which have their own elected governments. This called for a separate taxation structure for the Union Territories and thus UTGST rate or Union Territory GST was introduced instead of SGST for the following 5 Union Territories in India – Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli & Andaman and Nicobar Islands.