Understand the Key Difference Between CGST & SGST | Motilal Oswal

What Is CGST And SGST: Know the Difference




SGST Vs CGST 

The central government will collect the SGST, CGST or IGST depending on the transaction under the GST legislation. When products or services are sold within the state, this is referred to as an intrastate transaction, and both SGST and CGST are collected. If the supply of products or services occurs across states, it is referred to as an inter-state transaction, and only IGST is collected. There were various taxes such as Service Tax, Central Excise and State VAT, but GST has just one tax with three components - SGST, CGST and IGST.

What is the Central Goods And Services Tax (CGST)?

The Central Goods and Services Tax is levied by the Government of India on any transaction of goods and services inside the state. It is one of the taxes levied on all intrastate transactions. All former central taxes, such as central excise duty, service tax and customs duty, have been replaced by CGST. The CGST rate is the same as the SGST rate, and both taxes are levied depending on the goods.

So, if Aakash wants to sell a product to John, who resides in the same state, he must pay two taxes. The CGST rate is 9%, and the SGST rate will be 9% as well. The consumption of the product in which the state is produced is not subject to GST collection. The state charges a tax on manufacturing, which is subsequently passed to the consuming state by the union government.

What is the State Goods And Services Tax (SGST)?

The state goods and services tax, or SGST, is one of two taxes placed on intrastate transactions of goods and services. The SGST is charged on the state in which the commodities are acquired and sold. It will be used to replace current state taxes such as entertainment tax, VAT, luxury tax, sales tax, state cess, entry tax and surcharges on any kind of transaction involving products and services. The money generated by the SGST is solely devised by the state government.

So, if Arun from Uttar Pradesh wants to sell any products to Lakshay from Uttar Pradesh, the product will be subject to 18% GST, which includes 9% CGST and 9% SGST.

What's the Difference Between SGST and CGST?

Difference

SGST

CGST

Collected by

State Government

Central Government

Meaning

SGST has replaced the existing tax like the luxury tax, sales tax, etc. This tax is levied by the state government.

The CGST has replaced the existing excise tax, services tax, etc.

Benefiting authorities

State Government

Central Government

Wrapping Up

There are several advantages to obtaining GST registration, including the ability to claim Input Tax Credit and Interstate Sales without limits. You may also choose a small business composition plan, which provides higher working capital, lower tax obligation and fewer compliances. The GST tax scheme has significantly decreased cascading.

Frequently Asked Questions About CGST And SGST

Q. What is the GST registration number?

A GST number is a unique 15-digit identification number provided to each taxpayer who has registered for GST.

Q. What is RCM in GST?

The RCM is the procedure of paying GST by the recipient rather than the provider. The registered buyer must pay GST and must self-invoice for the purchases made. In the event of intra-state transactions, the purchaser must pay CGST and SGST through the RCM.

Q. How many different kinds of SGST are there?

In India, there is just one sort of SGST. This indirect tax is collected by the state where the commodities or services are consumed, rather than the state where the products are produced.

Q. What is the GST percentage?

Over 1300 commodities and services have been accommodated by the GST council under four tax slabs of 5%, 12%, 18%, and 28% under GST.

Q. Is it possible to locate the GST number by name?

No, it is not feasible to locate a taxpayer's GST number by name. Only for the list of taxpayers given by state governments and firms that have disclosed their GSTIN on their website can you obtain GST information by name.

Q. What kind of tax is GST?

The Goods & Services Tax (GST) is an indirect tax applied on the majority of goods and services supplied for domestic consumption.

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