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UTGST Full Form, Meaning and Applicability of UTGST

What is UTGST?

UTGST full form is  Union Territory Goods and Service Tax. UTGST is applicable when goods or services or both are consumed in the supplied regions of India that include Andaman and Nicobar Islands, Lakshadweep, Dadra & Nagar Haveli and Daman & Diu, Ladakh and Chandigarh, termed as Union territories of India. Union Territory GST will be charged simultaneously with the Central goods and services tax (CGST).

What is UTGST and when is it applicable?

The State Goods and Services Tax (SGST) can not be levied by a Union Territory without a governing body under GST. To decrease this challenge, the GST Council has chosen to have Union Territory Goods and Services Tax Law (UGST) similar to SGST. Though SGST can be executed in Union Territories, for instance, New Delhi and Puducherry, both have individual governing bodies and can be considered States according to the GST process.

Here is the complete list of Union Territories for the Applicability of UTGST

UTGST is applicable when there is a separate governing body. Here is the list of the Union Territories where the UTGST Act is applicable:

(i) Chandigarh

(ii) Lakshadweep

(iii) Ladakh

(iv) Dadra and Nagar Haveli and Daman and Diu

(v) Andaman & Nicobar islands

Administration

There are two types of union territories in India:

  • Union territory with the legislature
  • Union territory without legislature

Currently, there are two union territories with the legislature; Delhi and Puducherry. These types of union territory have a defined legislature and an elected government. Hence, for these states SGST is applicable.

The central government directly controls the other union territories. Union Territories that are governed now by the Central Government have a Lieutenant Governor as an executive. He is the representative of the President of India and appointed by the Central government. The UTGST Act governs these UTs.

UTGST Applicability

Output liabilities of the taxable person as per the UTGST Act can are often explained as follows:

Supply Type Output tax Liability Section Applicable
Supplies made in a Union Territory without governing body UTGST and CGST (within the UT border) As per Section 8(1) and 8(2) of the IGST Act
Supplies made between two Union Territories without governing body Integrated GST (Between two or more UT) As per Section 7(1) and 7(3) of the IGST Act
Supplies arranged between a Union Territory without governing body and a State or UT with the governing body. Integrated GST As per Section 7(1) and 7(3) of the IGST Act

UTGST Rates

Union Territory Goods and Services Tax has the same rates as State Goods and Services Tax. So, the UTGST rates are 0%, 5%, 12%, 18% and 28% respectively. Further, the exemption rules for goods and services are also similar to SGST.

Example of UTGST

Here we see how the different elements under GST work in India. Suppose the GST rate applicable to a product is 18%.

Sales From Sales To Amount of Sale Type of Tax GST Amount
Maharashtra Maharashtra 1,00,000 INR CGST+SGST

(9,000+9,000)

18,000 INR
Maharashtra Punjab 1,00,000 INR IGST 18,000 INR
Daman & Diu Daman & Diu 1,00,000 INR CGST+UTGST

(9,000+9,000)

18,000 INR
Daman & Diu Maharashtra 1,00,000 INR IGST 18,000 INR
Maharashtra Chandigarh 1,00,000 INR IGST 18,000 INR

 

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