LEVY Of CGST / SGST / UTGST


Levy of the CGST is specified under section 9 of the CGST Act, and UGST in section 5 of the UTGST Act, 2017 which envisages that:

(a)        Applicability: CGST/SGST/UTGST will be levied on all intra-state supplies of goods and/or services;

For example, AD Ltd. supplier of machinery located in Delhi supplies the machinery to BD Ltd. in Delhi. Such Supply is intra-state and will be subject to CGST/SGST/UTGST.

(b)        Value: At ad valorem basis on the value as determined under section 15 of the Act

(c)        Rates: Rates of the tax will be notified by the Centre and State Government based on the principle specified by the GST Council.

(d)       Limit on rates: The rates so notified shall however, not exceed 20% in any case. Read it  as 20% for CGST and 20% for SGST/UTGST.

(e)        Non-applicability: GST will not be applicable on the alcoholic liquor for human consumption.

(f)         Applicability on petroleum product: The five petroleum products namely petroleum Crude, High speed diesel, Motor spirit (Petrol), Natural Gas, Aviation turbine fuel will be under the levy of GST from the date notified by government on the recommendation of the council.

(g)       Reverse charge: Categories of supply of goods and services would be notified by the Centre/States Government (on recommendation of council) on which recipient would be liable to pay GST on reverse charge basis. All the provisions of this act shall apply mutatis mutandis upon such person.

(h)        Purchase from unregistered supplier: The CGST/SGST/UTGST in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

(i)        Levy on e-commerce operator: The category of e-commerce operators will also be notified by the government on recommendation of GST Council for payment of CGST/SGST/UTGST on services supplied through them and all provisions of this Act shall apply to them as if they are the person liable for payment of tax under this Act. In case e-commerce operator does not have physical presence in India, any person representing such e-commerce operator in India on behalf of such person shall be liable to pay tax. Even in case no person is representing an e-commerce operator in India, the e-commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and other compliances.

THE LIABILITY OF BEING TAXED FOR CGST / SGST /  UTGST

In general the suppliers of goods and/or service are liable to pay GST. However, there are conditions specified under the law for making recipient of goods and/or services or the third party liable for payment.

Following are the category of person/entities that are liable to pay CGST/SGST/UTGST:

a.         Intra-State Supplier of taxable goods and/or services who has cross the exemption threshold limit

b.         Recipients of inward supply of goods and/or services who are notified by the govt. for payment of tax on reverse charge basis.

c.          Recipients of inward supply of goods and/or services from unregistered person.

d..         E-commerce operator supplying the services notified by government

e.          Representative of an e-commerce entity who does not have place of business in taxable territory

Section 2(107) defines the “taxable person” means a person who is registered or liable to be registered under section 22 or section 24.

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Levy of CGST / SGST / UTGST
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