The full form of SGST is State Goods and Services Tax. Just like CGST and IGST, SGST is also a component of GST. The Act that looks after SGST is the State Goods and Service Tax Act 2017.
So, after the introduction of SGST, all the other indirect taxes levied by the state government in the old taxation system got subsumed under SGST.
Moreover, all the tax collected under SGST remains in the hands of state governments.
Applicability of SGST
In order to know whether the supply of goods or services or both attracts SGST, it is important for us to know that if the supply is an intra-state or inter-state supply.
Intra-state supply is a type of supply where the location of the supplier and the recipient is in the same state. In this type of supply, the supplier needs to collect both CGST and SGST. The amount collected under CGST is deposited with the Central government whereas the tax collected under SGST is submitted with the state government.
Inter-State supply is a type of supply where the location of the supplier and the location of the recipient lies in different states. Moreover, import, export, or any supply made to the SEZ units or EOU is also considered as an Inter-State supply.
In the case of inter-state supply, the supplier needs to collect IGST. This IGST collected by the supplier is submitted to the Central Government.
Features of SGST
Here are some of the major features of SGST:
- SGST is levied and collected by the respective state government.
- Every state has its own State GST Act.
- SGST is not applicable to exempted goods.
Difference between CGST and SGST
Here are the key differences between CGST and SGST:
|Full Form||Central Goods and Services Tax||State Goods and Services Tax||Integrated Goods and Services Tax|
|Levied by||Central Government||State Government||Central Government|
|Collected by||Central Government||State Government||Central Government|
|ITC Utilization||(i) CGST
(ii) In any proportion towards CGST and SGST
|Applicability of composition scheme||Applicable||Applicable||Not Applicable|
|Registration Criteria||Any taxpayer whose aggregate turnover exceeds 40 Lakh INR (20 Lakh INR in special states) do not need to obtain registration.||Any taxpayer whose aggregate turnover exceeds 40 Lakh INR (20 Lakh INR in special states) do not need to obtain registration.||Every taxpayer who is carrying out inter-state supply needs to obtain registration irrespective of turnover prescribed.|
Let us see how the different components under GST work in India. Assuming the GST rate applicable to the product be 18%.
|Sales From||Sales To||Amount of Sale||Type of Tax||GST Amount|
|Delhi||UP||2,00,000 INR||IGST||36,000 INR|
|Andaman & Nicobar||Andaman & Nicobar||2,00,000 INR||CGST+UTGST
|Andaman & Nicobar||Delhi||2,00,000 INR||IGST||36,000 INR|
|UP||Lakshadweep||2,00,000 INR||IGST||36,000 INR|