The comprehensive indirect tax GST was introduced in 2017 to replace the various indirect taxes in place, like excise duty, value-added tax (VAT), and other similar charges. A destination-based tax, GST, is charged on goods and services supplied. GST aims to simplify and make it a single tax system, which eases the way businesses handle this.

What are the different types of GST in India?

There are four main types of GST, which include Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UGST), and Integrated Goods and Service Tax (IGST).

Central Goods and Service Tax (CGST)

The central government charges tax on the transaction involving goods and services intrastate. This tax is levied alongside the SGST or UGST, as the case may be, where the revenues collected as taxes are split into two halves and shared equally between the state government and central government.

State Goods and Service Tax (SGST)

This refers to the tax a state government levies on the transactions involving goods and services within the state. This tax includes elements, including purchase tax, luxury tax, entertainment tax, and more.

Union Territory Goods and Service Tax (UGST)

This is similar to the SGST but applies to union territories instead of states. It is the same as the state-related GST and supersedes all other taxes like luxury, entertainment, etc.

Integrated Goods and Service Tax (IGST)

When transactions related to goods and services occur between states, then IGST applies to these transactions. This tax also applies to the import and export of goods. The revenue that this tax generates is shared between central and state governments.

The payment of GST on time is of great importance to any business. Failure to do so can result in penalties and statutory compliance issues. Often companies face issues retrieving the amount to be paid from the portal and then going through the process of making the challan, checking it, and getting the approvals internally to make the payment.

That is where a smart spend management platform like the one we offer to our customers at EnKash helps you. You can set maker, checker, and approver levels within the tax payments module so that once you retrieve the amount to pay, you can get the requisite approvals in place.

Moreover, you also have various payment options to complete the payment via the portal. Once the payment is completed, your finance system is update.

FAQ

What is the full form of CGST?

The full form of CGST is the central goods and services tax, which has been brought to supersede all the indirect taxes the central government had in place. These taxes were applicable to goods and services that were moved intrastate.

What is the full form of IGST?

IGST stands for integrated goods and services tax, which is one of the 3 components that form the goods and services tax (GST). It is applicable when goods or services move interstate.

What is the full form of SGST?

This translates to state goods and services tax, which is part of the state goods and services tax 2016. The tax applies to goods and services traded within the state and is deposited in the state government’s account.

Who collects the CGST amount?

The central government collects the CGST amount. GST applicable on transactions will be divided into the state GST and central GST.

Who collects the IGST amount?

Integrated goods and services tax will go to the central government.

Who collects the SGST amount?

Once again, the goods and services tax will be divided between the relevant state and central governments.

Who collects the UTGST amount?

Since Union territory goods and services tax is the same a SGST but applicable to union territories, the division will follow the same pattern as the SGST.

What is the use of a GST calculator?

As the name suggests, the GST calculator will help you determine the final price of a product or service before and after taxes and how the division of taxes to state and central governments will occur.

What is GSTIN?

It is the unique identification number that is assigned to each taxpayer. It consists of 15 digits and is assigned to business entities or individuals at the time of registration completion under the regime.