What Are The Components Of GST

Do you want to know about the components of GST? If yes, then you must read this article till the end to have a clear understanding of it. You cannot just make your choices on the incorrect end.

Components of GST are there to make the process of GST collection smoother and more efficient. It can boost the scope of better financial planning. Without knowing the facts you cannot make your choices on the incorrect end.

Components of GST with examples will help you learn the way GST works in the practical field. Without knowing the steps you cannot make proper planning to pay the GST on time. So, let’s explore the details.

What Is GST?

The full form of GST is Goods and Service Tax. This is a form of indirect tax that has replaced various indirect taxes in India like excise duty, VAT, and service tax. The Goods and Service Tax was passed in India on 29th March 2017 and came into existence on 1st July 2017. You must know these facts before making the calculation of GST. The Tax law in India is a multi-stage, comprehensive, and destination-based tax system.

What Are The Components Of GST?

There are four main components of GST that you should be well aware of. You should be well aware of different components to make use of it. Without knowing it you cannot be able to tackle the burden of taxation properly.

A. CGST

The Central Goods and Service Tax is an essential component of indirect tax under the regime of GST. It is applicable for intrastate transactions. This component of GST works under the CGST Act 2017.

This is based on section 15 of the CGST Act 2017. You can understand the full concept once you go through this example.

A supplier from Mumbai has sold goods worth Rs 10000 to the customer in Mumbai and this case CGST applicable is 18%. In most of the cases, CGST and SGST are divided equally. On the total revenue earned Rs 900 will go to the central government. This is the actual process of calculation.

B. SGST

State Goods and Service Tax is an indirect tax that is levied on the intrastate movement and supply of goods and services. CGST under section 15 is levied on the transaction value of goods and services which is supplied to the goods and services.

You need to go through the details of the CGST for making the transactions of the goods and services. It is the price paid for goods and services. As per sections 12 and 13 of SGST, you need to pay the taxes on time. The obligation starts with the time of supply of goods or services and the portion that is levied accordingly.

C. UTGST

UTGST is another form of indirect tax that is imposed and collected by some respective union territory under the Goods and Service Act. It involves taxes on the Intrastate supply of goods and services.

This tax is levied on Alcoholic products that are meant for human consumption. These are excluded from the list of GST. UTGST is applicable for goods and services that take place in the union territories of Andaman and Nicobar Island.

SGST laws apply to all the union territories for Delhi and Pondicherry. Additionally, you cannot make your selection on the wrong end.

D. IGST

The Integrated Goods or Service Tax is another form of IGST that applies to intrastate goods and services. It also includes goods and services imports and exports between the 2 states. IGST is under the control of the central government under the IGST Act. It is one of the important components of GST.

The accumulated tax is divided between some respective states of the central government. Additionally, you need to identify the best options that can help you to pay off your taxes in a simplified manner.

Who Collects Different Components Of GST?

In most cases, for collecting different components of GST, you need to follow and know some of its crucial components to keep things in proper parity. Let’s find out who collects different components of GST.

• CGST is collected by the Central Government.
• The state government collects the SGST.
• UTGST is collected by the Union Territory Administration.
• The Central Government collects IGST from the taxpayer.

Final Take Away

Hence, these are some of the key components of GST that you must be well aware of. So, let’s find out which component of GST you need to pay if you want to seek your requirements. Additionally, you should go through the complete details of the components of GST to meet your requirements.

You can share your opinions and views with us to get a complete idea about it. Moreover, you should get through the details of the facts to make things happen in your favor.