In India, the business climate is on a churn. While it is easier to avail the best business loans than ever before, regulatory changes are causing ripples throughout industries.
The taxation mechanism in the country underwent a major shift in July 2017, when the entire system was brought under the Goods and Services Tax (GST). Though the government and associated bodies did aid the implementation of this new tax through various seminars and conferences and even through helplines businessmen could approach, a range of uncertainties persist.
The GST was aimed at building a unified system of taxes, which would be consumption-based. This means that the proceeds from these taxes would be paid to the state in which the goods or services were consumed, rather than where they originated from.
While CGST stands for Central Goods and Services Tax and SGST stands for State Goods and Services Tax, IGST refers to Integrated Goods and Services Tax. IGST was designed to enable the seamless flow of goods from one state to another, and thus ensuring that each state would have to deal only with the Centre and not another state to settle tax claims. The GST has been able to subsume 10 central and state taxes, and was intended to ease compliance with taxes, especially for businesses.
In recent times, several measures have been undertaken to ease operations for businesses. These include introduction of some of the best business loans and easier accessibility to these business loans as well. Nowadays, a businessman can easily compare business loans from the comfort of their home or office and buy one that suits their requirements. If you apply for a business loan on Finserv MARKETS, you can easily have access to business loans up to Rs. 30 lakh approved in less than 3 minutes.
The implementation of GST has given rise to a host of new terms for the taxation bodies , namely CGST, SGST and IGST. You can also get to know what are the components of GST before going with difference between them.
Read on to learn the difference between CGST, SGST and IGST with the help of a table
|This is the portion of the GST that is levied by the Centre on the intra-state supply of goods and/or services.||SGST is the share of the GST that is levied by the state governments on intra-state supply of goods and/or services.||The Integrated GST comes into play when there is supply of goods and/or services to other states different from where these goods and/or services are originating.|
|The existing taxes subsumed within the CGST include Central Excise Duty, Central Sales Tax, Service Tax, and surcharges and excesses such as Additional Excise Duties, Additional Customs Duty – Countervailing Duty, and Special Additional Duty of Customs (SAD).||The SGST subsumed taxes including the State Sales Tax, VAT, Luxury Tax, Entertainment Tax as well as taxes levied on lottery, betting and gambling, and other Entry Taxes and State Cesses and Surcharges in so far as they related to the supply of goods and/or services.||The IGST is collected by the Centre and also applies to imports.|
|The tax revenue garnered under CGST is meant for the Central government.||The input tax credit of SGST can be used by dealers, against SGST or IGST.||While trade within the state results in the GST being split up into the CGST and the SGST, IGST goes directly to the Centre in case of transaction of sale conducted between different states.|
|The input tax credit of the CGST can be used against the CGST or IGST, but not under SGST.||The SGST credit cannot be used against CGST.||However, the input tax credit of IGST can be used against either the CGST, SGST or IGST.|
The revenue collected by all three bodies has been seen to be significantly different as well. The higher revenue earned via IGST is a good sign for the economy, since it suggests that inter-state trade is growing.
Also read what is the impact of GST on personal loan only at Finserv MARKETS.
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