STRUCTURE Business Partner Customer CGSTSGST State A Sale 27 Sale IGST State B

Structure business partner customer cgstsgst state a

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STRUCTURE Business Partner Customer CGST+SGST State A Sale 27
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Sale IGST State B Customer Credit Structure Nature of levy Leviable on Adjustable against (in specified order ) CGST Local supply of goods /services CGST; and IGST SGST Local supply of goods /services SGST payable on local sale within same State; and IGST IGST Inter-State supply of goods/services Imports into India IGST; CGST; and SGST Cross utilization of credits between goods and services would be allowed Following are the authorities who will levy and administer GST - 1. Centre will levy and administer CGST & IGST 2. States will levy and administer SGST. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States/ Union territory would be called the State GST (SGST)/ UTGST. 28
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Similarly, Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services . Calculation of taxation for the transaction of goods and services simultaneously under Central GST (CGST) and State GST (SGST)- Let us understand this concept with the help of an example Suppose, again hypothetically, that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for, let us say Rs. 100, the ad company would charge CGST of Rs. 1 0 as well as SGST of Rs. 1 0 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not again actually pay Rs. 20 (Rs. 10+Rs. 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc.). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilize the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST. Benefits for the country because of Goods and services Tax Following are the benefits- 1. By amalgamating a large number of Central and State taxes into a single tax and allowing set- off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. 2. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden 29
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on goods, which is currently estimated at 25%-30%. 3. Introduction of GST would also make our products competitive in the domestic and international markets. This would instantly spur economic growth.
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  • Fall '17
  • Mahvish ali

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