GST Basics

GST is a dual tax with the central and states governments at once charge tax on a common tax base. GST charged by the central government on the intra-state supply of goods or services can be called the central tax, and GST charged by the states and union territories internally in the own state can be called the state tax/ union territories tax respectively.

In case goods or services are supplied across the state or union territory i.e. intra-state supplies both the central tax (CGST) & state tax/ union territories tax (SGST) is applied. In case goods or services are supplied within the state or union territory i.e. Inter-State supply Integrated GST (IGST) is charged which is equivalent to CGST + SGST. However, there is no difference in rates. That means the total rates of tax are remain same whether a supply is made within or outside the state. The manufacturers and distributors of goods or services pay the same tax for any supply of products and services across the country.

The imported goods or services from across the country are also charged integrated GST (IGST) with basic customs duty. For abroad imports, the IGST are available as credit to the importer in further supplies. Besides CGST, SGST and IGST along with Compensation Cess are charged on a few luxury goods under the GST (Compensation to States) Act, 2017. The Cess is also available as credit for further payment of Cess.

GST seats responsibility on the e-commerce operators to collect tax at source, where goods and services are supplied through them. In general, the registered supplier of good or series is needed to pay GST. However, in specified cases like imports GST is charged on the recipient under the reverse charge mechanism rather than supplier.  Further in some cases of intra-state supply of services the GST may be cast on e-commerce operators through which such services are supplied.