WHAT IS CGST, SGST, AND IGST?

These are the three types of GST (Goods and Service Tax). CGST stands for Central Goods and Service Tax, SGST stands for State Goods and Services Tax, and IGST Integrated Goods and Services Tax. The taxation rate under each of them is different.

CGST stands for CENTRAL GOODS AND SERVICE TAX

It is authorized by the Central Government. CGST is a tax under the GST regime that is applicable to intrastate transactions. The CGST is governed by the CGST Act. For example, if a trader from West Bengal has sold goods to customers in West Bengal worth Rs 4,000. Then the GST is applicable on the transaction will be partly CGST and partly SGST. If the rate of GST charged 16%. It will be divided equally in the form of 8% CGST and 8% SGST. The total amount charged by the trader, in this case, will be Rs 4800. The revenue earned from GST under the head of CGST, i.e., Rs 360.

SGST stands for STATE GOODS AND SERVICE TAX

It is authorized by the state government. SGST is a tax under the GST regime. It is applicable within the same state. In the case of an intrastate supply of both goods and services is levied. SGST is applied to goods and services that are purchased and sold within the state. As mentioned in the above instance. For example, if a trader from West Bengal has sold goods to customers in West Bengal worth Rs 4,000. Then the GST is applicable on the transaction will be partly SGST and partly CGST. If the rate of GST charged 16%. It will be divided equally in the form of 8% CGST and 8% SGST. The total amount charged by the trader, in this case, will be Rs 4800. The revenue earned from GST under the head of SGST, i.e., Rs 360.

IGST stands for INTEGRATED GOODS AND SERVICES TAX

It is authorized by the central and state government. IGST is a tax under the GST regime that is applied between two states. Supply of goods and services are well as imports and exports. The IGST is governed by the IGST Act. The body is responsible for collecting taxes by the central government. After the collection of taxes, it is further divided among the respective states by the Central Government. For example, if a trader from West Bengal has sold goods to a customer in Karnataka worth Rs 5,000. Then IGST will be applicable as the transaction within the state. The rate is 16%, the trader will charge Rs 5,800 are the goods. IGST collected is Rs 800 which will be going to the central government.

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