TYPES OF GST

In the labyrinth of India's tax system, the Goods and Services Tax (GST) stands as a
transformative dynamism, restructuring the nation's financial architecture since its
implementation on July 1, 2017. This revolutionary tax system replaced a complicated indirect
taxes and aimed to create a unified market by bringing together the various economic spheres
under one umbrella. However, Understanding the intricacies of GST can be a tough task,
especially considering the various types that exist within the system.

There are Four Types of GST :

1. Integrated Goods and Services Tax
2. State Goods and Services Tax
3. Central Goods and Services Tax
4. Union Territory Goods and Services Tax

Integrated Goods and Services Tax

Under the GST framework, taxes on imports and exports as well as interstate (between two
states) supplies of goods and/or services are referred to as the Integrated Goods and Services
Tax, or IGST. The IGST Act regulates the IGST. The Central Government is in charge of
collecting taxes under the IGST. The Central Government distributes the taxes among the
individual states after they have been collected. For example, as this is an interstate transaction,
IGST will be charged if a merchant from West Bengal sells products to a consumer in Karnataka
for Rs. 5,000. The seller will charge Rs. 5,900 for the products if the rate of GST on them is
18%. The IGST collected is Rs.900 and it will be going to the Central Government .

State Goods and Services Tax :

The intrastate (inside the same state) transactions are subject to the State Goods and Services
Tax, or SGST. When products or services are supplied within the state, both State and Central
GST are applicable.
But the state imposes the State GST, sometimes known as the SGST, on products and/or services
that are bought or sold within the state. The SGST Act is in charge of it. Only the corresponding
state government may claim the money obtained through SGST.
For Instance : Lets assume a scenario, where a trader from Maharashtra sells goods to a customer
in Gujarat worth Rs. 8,000. In this situation, the applicable GST will be Integrated Goods and
Services Tax (IGST), as it involves transactions between two different states. Assuming the GST
rate is 12%, the IGST would also be levied at the same rate. The total GST amount to be charged
by the trader would be Rs. 960 (12% of Rs. 8,000). Unlike the intrastate transaction, where
CGST and SGST are applicable separately, in this case, the entire IGST amount goes to the
central government.

Central Goods and Services Tax

Similar to State Goods and Services Tax, Central Goods and Services Tax (CGST) is a GST
regime tax that is imposed on intrastate (inside the same state) transactions. The CGST Act is
what governs the CGST. The Central Government is in charge of collecting the money received
from the CGST.

Union Territory Goods and Services Tax (UTGST)

The State Goods and Services Tax (SGST), which is imposed on the delivery of goods and/or
services in India's Union Territories (UTs), is matched by the Union Territory Goods and
Services Tax (UTGST). The supply of goods and/or services in Chandigarh, Daman Diu, Dadra
and Nagar Haveli, Lakshadweep, and the Andaman & Nicobar Islands is subject to the UTGST.
The UTGST Act regulates the UTGST. The Union Territory government is responsible for
collecting the UTGST income. In Union Territories, the SGST is replaced by the UTGST.
Therefore, in Union Territories, the UTGST will be imposed in addition to the CGST.

Difference Between the Types of GST

Various types of GST tax have their inherent differences which are summarised in the table
below:
Types Who is Priority Applicable Benefiting Rate
of collecting? of Tax transactions (Goods and authority
GST Credit Services)
use

SGST State SGST, Intra-state State

Government IGST transactions/transactions within Government
a single state 0-28% (May
Vary across
states)

UGST Union UTGST, Transaction within a Union Union 0-28%

Territory (UT) IGST Territory Territory (UT)
Government Government

CGST Central CGST, Intra-state Central 0-28%

Government IGST transactions/transactions within Government
a single state
 IGST Central IGST, Inter-state State 0-28%
Government CGST, transactions/transactions Government
SGST between two states or a state and Central
and a Union Territory (UT) Governmen

Who Has to Pay the GST?

● Every individual, company, partnership, limited liability partnership (LLP), and other
organisation that offers goods or services is required to pay GST.
● In the majority of states, businesses that generate more than ₹40 lakhs in income annually
from items or ₹20 lakhs from services are required to pay GST. For certain state and
northeastern state categories, the threshold limit is ₹10 lakhs.
● A GST registration is required for anyone manufacturing, selling, or distributing goods and
services.
● E-commerce businesses that permit the sale of goods or services via their platform are also
liable to pay GST.
● The buyer of the goods or services, not the vendor, is now in charge of paying the GST under
the reverse charge system.
Exemptions:
In India, certain goods are exempt from paying GST, including essential food items including
fresh fruits and vegetables, cereals, meat, fish, milk, eggs, healthcare, and educational services.
A few types of books, government services, and agricultural goods are exempt from paying GST.