What is the difference begtween CGST and SGST? What are the benefits of getting GST registration

Difference between CGST and SGST

Home » Learn » Commercial Transaction » Difference between CGST and SGST

Difference between CGST and SGST

GST or the Goods and Services Tax is the recent addition to the Indian Taxation system and it is levied on the supply of goods and services.  For the business operation to run smoothly GST  registration is required. It takes about 3-6 working days to obtain GST Registration. Any business that is operating without GST is considered to be illegal and is bound for penalties.

Under the GST law, the central government will collect the CGST, SGST, or the IGST depending on the transaction. When the supply of the goods or services is happening within the state it is called the intrastate transaction then both CGST and SGST will be collected. If the supply of the goods or services has happened between the states it is called inter-state transactions then it is called the inter-state transactions then only IGST will be collected. There were multiple taxes such as the Central excise, service tax, and the State VAT but under GST there is just one tax with three components- CGST, SGST, and IGST.

What is the Central Goods and Service Tax?

The Government of India levies the Central Goods and Service tax on any transaction of goods and services within the state. It is one of the taxes that is charged on every intrastate transaction. CGST has replaced all the existing central taxers like the service tax, central excise duty, customs duty. The rate of the CGST is equal to the SGST rate and both the taxes are charged based on the products.

So in case, If Ayaan is wanting to sell a product to Joseph who lives in the same state then he has to pay two taxes. The rate of CGST is 9% and SGST will also ve 9%. GST is levied on the consumption of the product in which the state is manufactured is not entitled to tax collection. For manufacturing the state levies the tax then the same will be transferred to the consuming state through the central government.

What are the State Goods and the Service tax?

SGST means the state goods and Service tax, which is one of two taxes that is levied on the intrastate transactions of the goods and the services. SGST is levied on the state where the goods are being purchased and sold. It will replace the existing state’s taxes that includes the VAT, entertainment tax, sales tax, luxury tax, entry tax, state cess, and the surcharge on any kind of transaction that involves the goods and services. The state government is the sole devising of the revenue earned under the SGST.

So if Ankit from Uttar Pradesh is wanting to sell some goods to Lalit in Uttar Pradesh then the product will attract the GST at 18% comprising of 9% of CGST and 9% SGST.

What is the difference between CGST and SGST?

Difference CGST GST
Meaning The Central Goods and Service tax under GST has replaced the existing tax services tax, excise tax, etc. SGST means the state goods and service tax that has replaces the existing tax like the sales tax, luxury tax, etc. This tax is levied by the state government.
Collected by Central Government State Government
Benefiting authorities Central Government State Government
Applicable on transaction Intrastate (Within the state) Intrastate (Within the state)
Registration No registration, until the turnover, is exceeding Rs.20 lakh (For northeastern states it is Rs.10 lakh) No registration, until the turnover, is exceeding Rs.20 lakh (For northeastern states it is Rs.10 lakh)
Composition scheme The dealer can use the benefits up to Rs.75 lakh under the composition  scheme The dealer can use the benefits up to Rs.75 lakh under the composition scheme

To get GST registration you can get in touch with our advisors who will help you in getting the GST registration within 6-7 days.

 What are the benefits of getting GST registration?

There are various benefits of getting GST registration like you can avail the Input tax credit and the Interstate sales without restrictions. You can also opt for a composition scheme for small businesses which offers less tax liability, high working capital, and fewer compliances. The GST tax regime has reduced the cascading considerably.

Other Related Guides

Rules 42 and 43 of CGST Rules Rules 42 and 43 of CGST Rules - Input Tax Credit Reversal Rule 42 and 43 of the CGST rules apply for claiming the input tax credit if the supply used...
Utilization of Input Tax Credit Utilization of Input Tax Credit  The Central Goods and Service Tax (Amendment) Act, 2018 has been made effective from 1st February 2019 and the said ...
GSTR-2B – Auto-drafted Input Tax Credit Stat... GSTR-2B - Auto-drafted Input Tax Credit Statement Recently, the Central Board of Indirect Taxes and Customs has launched Form GSTR-2B. Form GSTR-2B i...
Intra-State Supply of Gold under GST Intra-State Supply of Gold under GST The implementation of Goods and Service Tax had a huge effect on the gold industry. With GST in force, the gold ...
Accounting for Sales Promotion under GST Accounting for Sales Promotion under GST Due to continuous increase in the number of suppliers, there is huge competition prevailing in the market. D...

Post by Mansi Sawant

Mansi Sawant seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of IndiaFilings which provides taxation and Licensing. Writing from observations and researching makes her articles virtuous.