When it comes to the world of business, one of the things that is a given is taxation.
It is one of the main ways in which the government raises funds for its functions.
Not too long ago, there were numerous taxes that were levied on businesses.
It was only in the year 2016 that the GST act was implemented, that most of these taxes were repealed, in favor of a single ‘Goods & Services Tax’ or GST.
Although there have been many issues with the tax system, ranging from actual flaws to general criticism, one can say that the gst number, in delhi or otherwise, is one of the best things to have happened in the Indian taxation system, given how it simplified the taxation process.
With regard to the actual GST, be it gst registration in delhi or otherwise, there are four taxes that come under the system.
The details of the same are explained in the points below.
- Central GST or CGST
As the name would suggest, the Central GST or CGST, is the tax levied by the central government on goods and services in India.
Some of the central taxes that have been subsumed by the CGST are,
- Central Sales Tax
- Central Excise Duty
- Services Tax
- Excise Duty under Medical & Toiletries Preparation Act
- Additional Excise Duties Countervailing Duty (CVD)
More details about these various taxes can be known, when you apply to register gst in delhi or elsewhere.
Also to note is that the tax is applicable on all the goods and services that can be amended by a specialized body under the central government at periodic intervals. The input tax involved is given to the state governments, which can be utilized after the payment of the CGST to the central government is completed.
- State GST or SGST
The State GST or SGST is the tax levied by state governments, on the various goods and services sold in the marketplace.
Some of the state taxes that have been replaced by the SGST are as follows,
- State Sales Tax
- Luxury Tax
- Levies on Lottery
- Entertainment Tax
- Entry Tax
The funds collected from holders of gst no in delhi and other places under the SGST belong to the state governments. The process is managed by the GST authorities, with each state having its own separate GST department.
Also to note is that although the states have complete control over the taxes collected under SGST, the framework involved has to be in accordance with the central government. In other words, the states do not have complete autonomy to regulate the SGST by themselves.
- Union Territory GST or UTGST
As the name would suggest, this the GST that is charged at the Union Territory Levels, in places like Daman & Diu, Pondicherry, Andaman & Nicobar Islands, etc.
Just like in the case of CGST and SGST, the UTGST subsumes the various taxes levied at the Union Territory level. Currently, the UTGST is under the jurisdiction of the GST act that was passed in 2016. There is a proposal underway to have this process be brought under a separate act, although the bill hasn’t been passed yet.
The reason for the above is that Union Territories currently charge both CGST as well as UTGST, leading to an increase in the overall tax rate. This has been criticized by many, due to the fact that Union Territories are in fact run by the central government, rather than those of the states. The actual implementation of the changes may take a bit of time to come into effect.
In simple words, this tax would apply for gst, in delhi and other such union territories. You can get to know more about it, when you register gst in delhi or whichever place you are applying the same for.
Also, this is one of the more difficult taxes to understand when it comes to GST. Do check with a gst consultant in delhi or whichever union territory you are in, for more information.
- Integrated GST or IGST
The IGST is a tax levied on those transactions, where two or more states are involved. This is a tax that is levied on interstate transactions, on holders of the gst no in delhi and elsewhere.
If, for example, there is a sale of goods or services from Karnataka to Tamil Nadu, the IGST will be levied on these transactions according to existing GST tax rates. This would also apply for gst, in delhi and other states as well.
The taxes collected under IGST will be shared between the state and central government, in accordance with existing GST guidelines. This is something that holds true whether it were a gst number in delhi or any other part of India.
If you would like to know more about this, do check with a gst consultant in delhi or whichever state you are in, for more details.
In all, it can be summed up that the GST regime in India, whether a gst registration in delhi or elsewhere, is divided into four types, namely CGST, SGST, UTGST and IGST.
It should also be added that while these are the taxes that currently exist, it is very likely that the system may be modified in the near future. The GST regime in existence is still in its infancy in India, meaning that there is plenty of room for changes in the near future.