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.
What is an appropriate example of CGST?
A dealer from one state is selling goods to another state worth Rs. 10000. The GST rate is 18% that includes a CGST (Central Goods and Service Tax) rate of 9% and an SGST (State Goods and Service Tax) rate of 9%. 9% of 10000 is 900.
How are CGST and SGST calculated?
GST calculation is done simply by multiplying the taxable amount by the GST rate. The CGST and SGST are calculated by both the amounts being half of the total GST amount.
What are the taxes and rules levied on an intrastate supply?
According to Section 9 of the CGST Act, 2017, intrastate state stocks or supplies are responsible for CGST. In terms of Section 7 of the UTGST Act, 2017, intrastate supplies moved by a taxable individual or person who is located in Union Territory will be taxable to the UTGST. In the case of intrastate supply, CGST, SGST, or CGST and UTGST will be applied respectively.
What is aggregate turnover for CGST?
According to Section 2(6) of the CGST Act, 2017, aggregate turnover is the aggregate value of all taxable supplies, exempt or cut off supplies. This is for the exports of goods and services and supplies within the state. Here, they must have the same Permanent Account Number, to be calculated on an all India basis. But, central tax, state tax, state tax, union territory tax, and integrated tax will not be taken into account.
What is the relationship between the recipient and the supplier, for CGST?
The relationship is determined based on the explanation of Section 15 of the CGST Act, 2017 that implies the term “related persons”.
The following persons or individuals are considered as “related persons” GST
Furthermore, people who are linked with the work of one other where one person is the sole agent or sole distributor of the other. Hence, they can be deemed to be related.
What are the basic accounts required to be maintained by a person at the principal place of business?
According to Section 35 of the CGST Act, 2017 with the CGST Rules, the following accounts are needed to be maintained on a true and accurate basis:
Is there any specific set of records to be maintained by the provider of works contract service?
Yes, as per the CGST Rules, the registered person providing works contract service can maintain the accounts showing-
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