Simplifying GST - Post 1

What is GST? 

Goods and Service Tax (popularly known as GST) is an Indirect Tax which has subsumed various Indirect such as excise duty, service tax, VAT etc. 

GST Act was successfully passed in the Indian Parliament on 29th of March, 2017. Though the GST Act came into force from 1st of July 2017;  GST Law is a multi-stage, comprehensive, destination-based tax levied at every stage of value addition. 

In other words, we can say GST in an advance version of VAT applicable on a national level. As the Slogan of GST is given "One Nation, One Tax", GST is one indirect tax for the whole country.

Under the GST system, the tax will be charged at every point of supply of goods or services. In the case of intra-state sales i.e. the location of the supplier and the place of supply are in the same state, CGST and SGST will be levied. 

However, in Inter-state sales i.e. the location of the supplier and place of supply are in different states, IGST will be levied on the supply.

What are the components of GST?

There are 3 taxes under this GST regime: CGST, SGST/UTGST & IGST. 

1. SGST/UTGST: Levied on an intra-state sale (Eg: Within Uttar Pradesh/Chandigarh) and collected by the State Government. 

2. CGST: Levied on an intra-state sale (Eg: Within Maharashtra) and collected by the Central Government. 

3. IGST: Levied on inter-state sale and collected by the Central Government (Eg: West Bengal to Tamil Nadu)

Transaction	GST Regime	Old Regime	Fundamental of GST Regime
Sale within the State i.e. Intra-state Supply	SGST + CGST	Central Excise/Service tax + VAT	Revenue collected will be shared equally between the Central and the State governments
Sale to another State i.e. Inter-state Supply	IGST	Excise/Service Tax + CST	Only IGST will be levied on such supply. The Central then will share the IGST revenue based on the destination of goods