India has adopted a dual GST system, which was imposed concurrently by the Centre and States as CGST & SGST. Center has the power of tax intra-state sales and states are empowered to tax services. Now GST has extend to all over the India.
GST is a destination based tax applicable on all transactions involving supply of goods and services for a consideration subject to exceptions thereof. GST in India comprises of Central Goods and Service Tax
(CGST) – levied and collected by Central Government, State Goods and Service Tax
(SGST) – levied and collected by State Governments/Union Territories with State Legislatures and Union Territory Goods and Service Tax.
(UTGST)-levied and collected by Union Territories without State Legislatures, on intra-State supplies of taxable goods and/or services.
(IGST)-Inter-State supplies of taxable goods and/or services are subject to Integrated Goods and Service Tax.IGST is approximately the sum total of CGST and SGST/UTGST and is levied by Centre on all inter-State supplies.
There is single legislation – CGST Act, 2017 – for levying CGST. Similarly, Union Territories without State legislatures
[Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, Daman and Diu and Chandigarh] are governed by UTGST Act, 2017 for levying UTGST. States and Union territories with their own legislatures [Delhi and Puducherry] have their own GST legislation for levying SGST. Though there are multiple SGST legislations, the basic features of law, such as chargeability, definition of taxable event and taxable person, classification and valuation of goods and services, procedure for collection and levy of tax and the like are uniform in all the SGST legislations, as far as feasible. This is necessary to preserve the essence of dual GST.
Classification of Goods And Services;-
HSN (Harmonised System of Nomenclature) code is used for classifying the goods under the GST. A new Scheme of Classification of Services has been devised wherein the services of various descriptions have been classified under various sections, headings and groups. Each group consists of various Service Codes (Tariff). Chapters referred are the Chapters of the First Schedule to the Customs Tariff Act, 1975.
Manner of utilization of ITC;-
Input Tax Credit (ITC) of CGST and SGST/UTGST is available throughout the supply chain, but cross-utilization of credit of CGST and SGST/UTGST is not possible, i.e. CGST credit cannot be utilized for payment of SGST/UTGST and SGST/UTGST credit cannot be utilized for payment of CGST. However, cross utilization is allowed between CGST/SGST/UTGST and IGST, i.e. credit of IGST can be utilized for the payment of CGST/SGST/UTGST and vice versa.