naacmate@gmail.com

Drop an email

Book a Call

FAQ's

+91 8770134858

Member Login


What is GST?

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; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.

Components of GST

  • CGST Collected by the Central Government on an intra-state sale (Eg: transaction happening within Tamilnadu)
  • SGST Collected by the State Government on an intra-state sale (Eg: transaction happening within Tamil NAdu)
  • IGST Collected by the Central Government for inter-state sale (Eg: sTamil Nadu to Maharashtra)

In India, there are mainly 3 components of GST. The following table explains the 4 types of GST and compares them on various parameters:

TYPES OF GST RETURNS

Central GST – CGST

Taxes that it will replace

VAT, sales tax, luxury tax, entry tax, entertainment tax, purchase tax, Octroi, taxes on lottery

Applicability
Supplies within a state
Input Tax Credit
Against CGST and IGST
Tax Revenue Sharing
State government
Exemption Limit
Rs 20 lakh annual turnover.
Composition Scheme
The dealer may use the benefit of turnover of Rs 50 lakh
free supplies
SGST is applicable on free supply.
Registration
Not applicable till the turnover exceeds Rs 20 lakh

State GST – SGST

Taxes that it will replace

VAT, sales tax, luxury tax, entry tax, entertainment tax, purchase tax, Octroi, taxes on lottery

Applicability
Supplies within a state
Input Tax Credit
Against CGST and IGST
Tax Revenue Sharing
State government
Exemption Limit
Rs 20 lakh annual turnover.
Composition Scheme
The dealer may use the benefit of turnover of Rs 50 lakh
free supplies
SGST is applicable on free supply.
Registration
Not applicable till the turnover exceeds Rs 20 lakh

Integrated GST - IGST

Taxes that it will replace

Central sales tax (CST)

Applicability
Interstate supplies and import
Input Tax Credit
Against CGST, SGST and IGST
Tax Revenue Sharing
Shared between state and central governments
Exemption Limit
Exemption limit not defined
Composition Scheme
Composition Scheme is not available in this regard
free supplies
IGST is applicable on free supplies
Registration
Registration is necessarily mandatory if supply is made outside the states