SGST – State Goods And Service Tax
What is SGST stand for?
SGST is one of the GST tax components. SGST’s full form is expanded as the State Goods and Services Tax.
What is SGST? There will be one tax on goods and services when SGST is implemented. This tax will include all current state taxes such as State Sales Tax, Value-Added Tax, entertainment tax, gambling taxation, entry tax not within lieu of octroi, state cesses, and surcharges. All tax revenue collected under SGST is allocated to the State Government.
Features of the SGST:
- The SGST stands for all intrastate sales of goods and services.
- To make input tax credits available for taxes paid on the sale of goods or services.
- SGST is applicable when registered individuals to self-assess their tax liabilities.
- It also includes fines or other penalties for violating the proposed legislation.
- It reduces taxes on consumer products and services.
- It provides a complete overview of the taxpayers’ transitional provisions to the GST regime.
How often do SGST rates get revised?
On July 13, 2022, the government published nine Central Tax (Rate) notifications. These new GST rate amendments are effective from July 18, 2022. The 47th GST council meeting was place on June 28 and 29, 2022.
Difference between CGST and SGST
|Under GST, the old taxes like services, excise, etc., have been replaced by the CGST, or the Central Goods and Service tax.
|The term SGST stands for the state’s goods and service tax, which has replaced several other taxes, including the sales tax, the luxury tax, and others. The government of the state levies and collects this tax.
Understanding CGST, SGST, and IGST through a case study
A trader in Mumbai is selling a computer to a trader in Nagpur for Rs. 20,000. For this transaction, the CGST will be 14 per cent, while the SGST will also be 14 per cent. The trader in Mumbai would be charged Rs. 2,800 as CGST and Rs. 2,800 as SGST, which will be deposited into the relevant State and Central Government accounts.
This computer is now being supplied to the retailer’s shop in Chennai by the trader based in Mumbai. As this is an interstate transaction, the shopkeeper in Mumbai will charge IGST of 28 per cent or Rs. 5,600 on the base price of the commodity (Rs. 20,000) and pay the IGST sum into the government treasury.