Central Goods and Service Tax or CGST refers to the tax levied by the central government on the transaction of goods and services. The tax that is collected under the head CGST will be payable to the centre. Hence, CGST is levied on the intrastate supplies of both the services and goods. It is responsible for the central government and will be governed by the CGST Act. The taxes that are levied on the intrastate supplies of goods and services but the percentage of the tax will not exceed 14% each. This section is mentioned in Section 8 of the GST Act.
Elimination of multiple indirect taxes is one of the benefits of CGST. All taxes that are levied will not be in the line, i.e prevailing taxes like sales tax, turnover tax, service tax, etc, will come under a general tax called GST (Good and Service Tax).
CGST helps the common man save more money and reduce the price of goods and services. So, it is expected that the price of fast-moving consumer goods products, cinema tickets, small tickets, electrical products, etc will be reduced.
CGST brings together the tax concept for the whole country, and no separate concept is followed for states. So, this concept has the same format among all other states and is highly beneficial for interstate business.
Central GST is highly beneficial for businessmen. So, tax filing, compliance, and documentation tasks are very easy for business professionals. Additionally, return filing, tax payment, and refund process will be easy and trouble-free.
It is expected that the demands of products will increase along with supply, as GST will reduce the cost of the product.
The Central Goods and Services Act was enacted for tax collection on the intra-state supply of goods and services. Hence, it is governed by the central government. The central GST Act is applicable all over India including the states of Jammu and Kashmir.
The CGST Act can only start from a date that will be notified by the central government in the official gazette, which is from the fixed date. It is noted that different provisions apply to different states that are to be notified.
Under former taxation laws, the central government levied taxes on the manufacture of goods in the form of central excise duty, interstate sale of goods in the form of central sales tax, and certain services that provide in the form of service tax.
Likewise, the state government levy tax on retail in the form of value-added tax, purchase tax, luxury tax, and entry of goods in the state. Moreover, there are multiple types of taxes that are levied on the same supply chain.
Under GST management, taxes are levied on all-time sales. For intrastate deals, both central Goods and Service and state Goods and services will be levied. Inter-state sales are liable to integrated GST. There are many sections and scheduled rules and regulations of CGST. The common rules to be maintained in CGST are as follows:
Major documents required for CGST are PAN card, business registration proof, Identification cards, passport size photos, address proof of the individual, business address proof, and bank account records. Your bank statement can be used for verification. Further, verification includes a cancelled cheque or an extract from your passbook. Additionally, through address verification, electricity bill, rent agreement, purchase documents, property tax statement, etc can be verified.
Central GST is one of the 3 classifications under the Goods and Service Tax such as IGST, CGST, and SGST. It adheres to the concept of one tax one nation. CGST comes under Central Goods and Service Tax Act 2016.
For a detailed understanding, when CGST was introduced, the current central taxes of central excise duty, Central Sales Tax (CST), service tax, further excise duties, additional customs duties, specific additional duty of customs of new additional payment will be discarded.
CGST charges on the movement of goods and services of standard products and services can be improved from time to time by a separate body. The revenue collected supporting CGST is for the Centre. However, input tax credit on CGST is for states, and such input tax could be appropriated only against the payment of Central GST.
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