When learning about Goods and Service Tax, the first question comes to almost every person is: What is IGST, CGST, UTGST, and SGST? On one hand it is stated that almost all indirect taxes are merged into a single tax called Goods and Service Tax, and on the other hand, it is stated that there will be four taxes as IGST, CGST, UTGST, and SGST.
IGST stands for Integrated Goods and Service
CGST stands for Central Goods and Service Tax
SGST stands for State Goods and Service Tax
UTGST stands for Union Territory Goods and Service Tax
What is CGST, SGST and UTGST?
Since GST subsumed both indirect taxes of central government (excise duty, service tax, custom duty, etc. ) and state governments (VAT, Luxury tax, etc.), both the government now depend on GST for their indirect tax revenue. Therefore the GST rate is composed of two rates, one of CGST and one of SGST. Therefore, while making an intra-state sale (i.e., sale within the same state), CGST collected will go to the central government and SGST collected will go the respective state government in which sale is made.
UTGST is more or less similar to SGST. In a state, SGST will be applicable while in an union territory UTGST will be applicable.
For example: – A dealer in Maharashtra sells goods to the consumer worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such a case the dealer will collect Rs. 1800, Rs. 900 will go to the central government and Rs. 900 will go to the Maharashtra government.