S-GST
In this artical you will know about SGST. Their Features and Applicability.
Last updated
In this artical you will know about SGST. Their Features and Applicability.
Last updated
SGST (State Goods and Services Tax) is a type of tax under GST, in India and caters to the concept of one tax in one nation. SGST comes under the State Goods and Services Tax Act 2017. In addition, this tax levy is governed by the State Goods and Services Tax (SGST). SGST is levied on the transactional value of the goods or services supplied as per Section 15 of the SGST Act. This Act doesn't include the supply of alcohol for human consumption.
All goods and services supplied for SGST consideration are levied and collected by respective states.
Each state has a separate SGST Act under its State Goods and Services Tax Department. However, the basic features of GST law for all states such as fees, valuation, taxable incidence, measurement, classification, etc. will remain the same in the respective Acts of each state.
The tax collected is deposited in the accounts of the respective state.
SGST does not apply to exempted goods and services as they do not come under the effect of GST. Further, SGST is also not applicable where the total annual turnover is less than the prescribed limit.
The applicability of SGST/UTGST and other taxes like IGST and CGST under GST depends on the nature of supply in a given transaction. There are two types of supply:
Intra-State Supply
Inter-State Supply.
Intra-State Supply -
When the supply location of the supplier is in the same state or union territory. In the case of the supply of such goods and services, a vendor has to deposit both CGST and SGST. After depositing both taxes, part of CGST is deposited with the Central Government. And part of SGST is deposited with the concerned state government.
Let's try to understand with an example: Singh’s Enterprises, a manufacturer in Rajasthan, supplies goods to Kumar’s Traders, a dealer in Rajasthan. Goods worth Rs 1,00,000 are supplied by Sanjay Enterprises after adding GST @ 18%. Since it is an intra-state supply, GST gets deposited to both Central and State Governments. But the total GST amounting to Rs 18,000 gets deposited equally into separate heads. This means Rs 9,000 gets deposited into the CGST account. And another Rs 9,000 gets deposited into the SGST part.
Inter-State Supply
When the supplier's location and place of supply come in:
Two different States
2 Different Union Territories
A state and a Union Territory
In addition, any supply occurring in a taxable territory, and is not being supplied from the same state, is also known as an inter-state supply. Below-given are also treated as Inter-State supplies:
Supplies to or by Special Economic Zones (SEZs)
Goods or services imported to India
Services or goods exported outside India
Supply of goods or services to international tourists
Hence, only I-GST is levied and collected on the Inter-State supply of goods or services by the Central Government.
For Example, Kumar’s Ltd, a manufacturer in Madhya Pradesh, manufactures and supplies goods to Singh’s Traders, a dealer in Punjab. Goods worth Rs 2,00,000 are supplied by Kumar’s Ltd after adding GST @ 18%. As it is a type of inter-state supply, GST gets deposited only to the Central Government. Therefore, the entire GST of Rs 36,000 gets deposited into the CGST head only.
The GST rates have been revised several times since the GST came into force. The latest rate amendment came into force at the 39th GST Council meeting held on 14 March 2020. There have been several meetings of the GST Council regarding some rate revisions which were introduced later.
You can keep an eye on the details of all types of GST and rate revision by visiting the official website i.e. https://cbic-gst.gov.in/#
Disclaimer: This article is intended for general consumption only. The information in the article was accurate at the time of publication, but it is subject to change due to changes in government rules and regulations. The contents of the blog may not be copied unless prior permission is obtained.
Our GST guidebook and experts will help you with all your Goods and Services Tax Queries. Please contact us on +91 8955002477 to know more.
