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What Is GST

Published in: Accountancy
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  • Amal P

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Short introduction of CGST,SGST and IGST.

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    WHAT IS GST? Goods and Services Tax is destination-based levy which comprehensive includes goods as well as services. The basic principles of GST are same as of value added tax. Since India is a federal system which concurrently gives powers with respect to levy of taxes to state and central, India has adopted dual GST model, i.e., Tax on inter-state transactions will be levied by Central Government (which will be shared by Centre and State as per the recommendations of GST Council) and Tax on intra-state transactions will be levied by Centre and State concurrently. Goods and Services Tax Intra-state supply CGST SGST Inter-state supply IGST WHAT IS CGST, SGST AND IGST? Two major articles were inserted to our Constitution through Constitution (101st Amendment) Act, 2016 which empowers the government to levy Goods and Services Tax. They are;
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    Article 246A Empowers the Centre and State Government to levy GST concurrently on intra- state trade or commerce Reserves right to levy tax on trade inter-state or commerce at Central level Article 269A Empowers the Centre to levy GST on inter-state trade or commerce The GST collected on inter- will transactions state apportioned Centre and State on the recommendations of GST Council Thus, the tax on intra-state trade or commerce is levied by State Government and Central Government concurrently. The tax levied by Central Government on intra-state trade or commerce is Central Goods and Services Tax (Governed by Central Goods and Services Tax Act/ 2017) The tax levied by State Government on intra-state trade or commerce is known as State Goods and Service Tax (Governed by State Goods and Services Tax Act of each states; In case of union territories, there is a separate enactment known as Union Territory Goods and Services Tax Act, 2017 which is applicable to all Union Territories except Delhi and Puducherry as they are having separate enactments) The tax levied by Central Government on inter-state trade or commerce is known as Integrated Goods and Services Tax (Governed by Integrated Goods and Services Tax Act, 2010

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