GST levying process

10 Jun

GST levying process

This article is to explain how GST is levied on various transactions, depending on the place of supply.

Where GST is levied?

GST is leviable in case of all the transactions within the state, between the states & union territories, imports and exports.
However, GST shall not be applicable to the state of Jammu and Kashmir

Intra State Transactions:

Transactions within the state are termed as Intra state transactions. In case of supply of intra state transactions, CGST and SGST/UTGST shall be leviable.

Interstate Transactions:

Interstate transactions are the transactions between
1. the two states
2. The union territories
3. The State and Union territory

IGST shall be payable in case of Interstate transactions.

gst levied intrastate interstate


CGST refers to Central Goods and Service tax. Also Known as Central Tax.
SGST refers to State Goods and Service tax. Also known as State Tax; UTGST refers to Union Territory Goods and Service tax;
IGST refers to Integrated Goods and Service tax.

How to determine Intra State / Inter State Transactions in GST?

Where the Supply of goods and services or both shall be treated as Interstate/ Intrastate shall be determined by
1. Location of Supplier of goods, services or both and
2. Place of Supply of goods, services or Both

For example, When the Location of supplier is in a State and Place of Supply in also in the same state, the transaction shall be treated as Intra state.
However, When the Location of supplier is in a State and Place of provision is in different state/ Union Territory, the transaction shall be treated as Inter state.

Sec 12 and Sec 13 of the IGST act, 2017 determines the place of supply of goods or services or both

When GST should be levied on Goods / Services ?

GST shall be leviable at the Time of Supply based on the prescribed rates.

Time of supply is governed by the Section of the CGST act, 2017.


How Input Tax Credit will be adjusted in GST?

IGST credit can be adjusted with IGST, CGST, SGST/UTGST.

CGST credit can be adjusted with IGST, CGST; Adjustment of SGST/UTGST cannot be done with CGST;

SGST/UTGST can be adjusted with IGST, SGST/UTGST.

input tax credit in GST

What are the different proposed GST rates?

At Present, the rates prescribed are 0%, 5%,12%, 18%,28%.

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