Are you new to the concept of GST? Starting with the basics is the aptest thing to do and we're here to help!

GST makes it easier to do business by removing entrance obstacles at state boundaries. The new indirect tax system is intended to enhance tax compliance, increase federal and state government income receipts, and accelerate GDP growth by 1.5-2 percentage points.

The concept can seem a little overwhelming, however, this article will help you understand it better. Read on to know what GST is along with its various types in India.

TABLE OF CONTENTS

• What is GST (Goods and Service Tax)?
• What are the Types of GST in India?
• What are the Levied GST Rates in India?
• The Difference Between Types of GST in India
• Who Can Register for GST?
• Registration of GST
• FAQs
• Summing Up

What is GST (Goods and Service Tax)?

The Goods and Services Tax, or GST, is an indirect tax for the whole country that ensures indirect taxes are replaced throughout the country. This makes India a common united market.

The Goods and Services Tax Act, which was passed by Parliament on March 29, 2017, is a multi-stage tax applied on every value addition.

The GST Act went into force on July 1, 2017, and is very important since both the Central and State Governments rely on the GST for indirect tax income.

As a result of the renovated contrast, the definition is as follows:

• GST is a single, destination-based indirect tax on the value-added to products and services at each level of the supply chain.
• GST stands for Goods and Services Taxes, and it is a collection of taxes that taxpayers must pay all at once.

GST Advantages/Benefits

• The primary advantages of GST are as follows:
• India pays a single indirect tax.
• For taxes paid in another state, an input tax credit can be claimed.
• Assist the maker and carrier in transferring items from one state to another.

GST Registration Form

What exactly does GST registration entail?

According to the GST statute, GST registration entails receiving a unique number from the relevant tax authorities. This number is known as the GST Identification Number (GSTIN).

However, to obtain a GSTIN for your business or organization, you must first satisfy some fundamental requirements, like Minimum Registration Requirements.

What are the Types of GST in India?

GST is classified into four categories, which are described below:

The Central Goods and Services Tax (CGST) is a tax on goods and services that is (CGST)

• The Goods and Services Tax (GST) is a state-imposed tax on goods and services (SGST)
• The Union Territory Goods and Services Tax is a tax levied on goods and services in the Union Territory (UTGST)
• The Integrated Goods and Services Tax (IGST) is a tax on goods and services (IGST)

1.The State Goods and Services Tax (SGST)

The State Goods and Services Tax is a tax levied by the state government on goods and services (SGST).

The SGST is one of the two taxes levied by each state on transactions of goods and services. The SGST, which is levied by each state's state government, replaces all previous state taxes, including Sales Tax, Entertainment Tax, VAT, Entry Tax, and so on.

The State Government can claim the earned money under SGST.

For example, if a West Bengal merchant sells items for Rs.5,000 to a West Bengal consumer, the GST applicable on the transaction will be a combination of CGST and SGST. If the GST rate charged is 18 percent, it will be split evenly into 9 percent CGST and 9 percent SGST.

In this situation, the total sum charged by the merchant will be Rs.5,900. The money generated by GST under the heading of SGST, i.e. Rs.450, would be sent to the West Bengal state government in the form of SGST.

2.The Central Goods and Services Tax (CGST)

The Central Goods and Services Tax (CGST) is a tax charged on goods and services transactions that take place inside a state.

The Central Government imposed CGST to replace all other Central taxes, including State Tax, CST, SAD, and so on. Prices for goods and services subject to CGST are based on the basic market price.

As previously stated, if a merchant from West Bengal sells items worth Rs.5,000 to a consumer in West Bengal, the GST applicable on the transaction will be a combination of CGST and SGST.

If the GST rate charged is 18 percent, it will be split evenly into 9 percent CGST and 9 percent SGST. In this situation, the total sum charged by the merchant will be Rs.5,900.

The money generated by GST under the CGST heading, i.e. Rs.450, would be sent to the Central Government in the form of CGST.

3.The Integrated Goods and Services Tax (IGST)

The IGST is levied on interstate sales of goods and services. IGST is also levied on commodities imported for distribution among the different states. When goods and services are moved from one state to another, the IGST is collected.

For example, if a dealer from West Bengal sells items for Rs.5,000 to a consumer in Karnataka, IGST will apply because the transaction is interstate. If the GST rate on the items is 18%, the dealer will charge Rs.5,900 for the goods.

The IGST collected amounts to Rs.900, which would be paid to the Central Government.

4.The Union Territory Goods and Services Tax (UTGST)

The goal of imposing UTGST on the intra-UT supply of goods and services is to apply a collection of the tax to give advantages like SGST.

The UTGST applies to the following Union Territories: Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands, and Chandigarh.

GST is a transparent tax system that is levied on the supply of goods and services. When a consumer purchases an item, he or she sees only the appropriate state taxes on the product label, not the many tax components hidden in the goods.

The goal of applying GST is to make corporate operations easier by improving tax compliance, increasing revenue receipts for both the federal and state governments, and stimulating economic growth.

The elimination of tax cascading results in a decreased tax burden on numerous items.

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