Details
How does GST Works in India?
As Goods and Services Tax (GST) executed, there will be 3 kinds of applicable Goods and Services Taxes:
CGST: where the revenue will be collected by the central government
SGST: the revenue will be collected by the state government for intra – state sales
IGST: where the revenue will be collected by the central government for inter- state sales
For Example:
Assume, the dealer in Ahmedabad sold goods to a consumer in Ahmedabad worth Rs. 10,000, the Goods and Service Tax rate is 18% comprising CGST rate of 9% and SGST rate of 9%. In such cases the dealer collects Rs. 1,800 of this amount, Rs. 900 will go to the Central Government of India and Rs. 900 will go to the Gujarat Government.
Now, let us think the dealer in Ahmedabad sold goods to a dealer in Mumbai worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such case the dealer has to charge Rs. 1800 as IGST. This IGST will go to Central Government of India. So, now there is no need to pay CGST and SGST.
