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What Is SGST CGST & IGST?
What Is SGST CGST & IGST?
One major point that distinguishes GST from previous indirect taxes is that GST is a
destination-based tax. The burden of the tax is finally imposed on the person consuming the
goods or the services. Hence, the tax is received by State in which the goods or services
are consumed and not by the state in which such services were provided or goods are
manufactured, produced, sold or re-sold. In case the goods are exported, the seller
(Supplier) of the goods or services is exempted from paying tax under the GST regime.
The most important reason behind the implementation of GST is the centralisation of taxes
and removing the cascading effects i.e. applying the tax on the amount of tax. This gives an
introduction to the concept of CGST, SGST, and IGST. Let us discuss these 3 words:
This was an easy and most simplified method of understanding CGST, SGST & IGST.
Why there is a split in GST as 3 different taxes; SGST, CGST, and IGST?
India is a federal country and government in India operates in parts where Central and state
governments, both have their separates rights and duties. Both the Governments have
separate responsibilities to perform towards the citizens of India. To fulfil these
responsibilities, they need money. The constitution of India has assigned the powers to
both, the Centre and the States governments, to levy and collect taxes. This is why the
Centre and States are simultaneously levying GST. Further, ensuring “One Nation, One
Tax” agenda of GST, taxpayers have the facility to take the credit against each other
(CGST, SGST, IGST).