The GST is “Goods and Services Tax” a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It is designed to replace various indirect taxes like VAT, excise duty, service tax, and others.
It is an indirect type of tax, which has to be paid on buying goods or service and the buyer has to pay this tax, this tax is received by the state government and the central government. GST tax has been implemented in India from 1st July 2017. And GST is a completely online tax system.
Before 2017, by removing many types of indirect type taxes like “Excise Duty, Vat, Entry Tax, Service Tax” etc. in India, a tax named GST has been brought in their place.
What is GST Number?
Whichever person or company or institute gets its registration done under GST, it is given a REGISTRATION number and you can call it GST registration number or GST number if you want.
This GST number is made up of total 15 digits and 10 digits of the PAN card of the person or organization who has applied for the GST number are also added to it.
For example: 22AAAA0000A1Z5
Types Of GST
- CGST (central goods and service Tax): – Its collected by the central government on a local State sale (intra – state sale) (example: – within Maharashtra)
- SGST / UTGST (state goods and service Tax): – Its collected by the state government on a local State sale (intra – state sale) (example: – within Maharashtra)
- IGST (integrated goods and service tax): – Its collected by the central government for inter – state sale (example: – Maharashtra to Gujrat)
Types of Sales Tax
When we talk about sales tax in the context of GST, it can be divided into two types: local sales tax and interstate sales tax.
1. Local Sales Tax (CGST – SGST)
Local sales tax refers to sales that happen within the same state, meaning both the production and the sale of the product occur in the same state.
For example, if a product is made in Maharashtra and sold in Maharashtra, it is considered a local sale. In this case, CGST and SGST need to be paid.
- CGST (Central Goods and Service Tax): This tax is collected by the central government for sales within the same state (e.g., sales in Maharashtra).
- SGST (State Goods and Service Tax): This tax is collected by the state government for sales within the same state (e.g., sales in Maharashtra).
2. Interstate Sales Tax (IGST)
Interstate sales tax applies when a sale takes place between two different states. For example, if a product is made in Maharashtra and sold in Gujarat, this is an interstate sale. In such cases, IGST needs to be paid.
- IGST (Integrated Goods and Service Tax): This tax is collected by the central government for sales between different states (e.g., from Maharashtra to Gujarat).
Understanding GST Registration
A business is required to register for GST if its aggregate turnover exceeds a specified threshold limit. However, even if the turnover is below the threshold, certain businesses may still need to register, such as e-commerce businesses or those involved in interstate supply.
Who Must Register for GST?
- Businesses with a turnover exceeding ₹40 Lakhs (₹20 Lakhs for special category states like Jammu & Kashmir, Himachal Pradesh, etc.)
- Service providers with a turnover exceeding ₹20 Lakhs (₹10 Lakhs for special category states)
- E-commerce operators
- Casual taxable persons (e.g., a temporary business at a trade fair)
GST Tax Structure
GST applies at different rates, which are designed to suit the nature of the goods and services. The rates are:
- 5%: Essential items such as spices, tea, etc.
- 12%: Processed foods, mobile phones.
- 18%: Services, restaurants (without input tax credit).
- 28%: Luxury goods such as cars, high-end electronics.
Additionally, some goods and services are exempt from GST, such as basic food items, education services, and healthcare services.
All Indian states and Union Territories with their respective codes (as per GST), capitals, and other relevant details:
ascending order based on State Code (GST Code):
| State Code (GST Code) | State/Union Territory Name | Type | Capital |
|---|---|---|---|
| 01 | Andhra Pradesh | State | Amaravati |
| 01 | Jammu & Kashmir | Union Territory | Srinagar |
| 02 | Arunachal Pradesh | State | Itanagar |
| 02 | Himachal Pradesh | State | Shimla |
| 03 | Assam | State | Dispur |
| 03 | Punjab | State | Chandigarh |
| 04 | Chandigarh | Union Territory | Chandigarh |
| 05 | Uttarakhand | State | Dehradun |
| 06 | Haryana | State | Chandigarh |
| 07 | Delhi | Union Territory | New Delhi |
| 08 | Rajasthan | State | Jaipur |
| 09 | Uttar Pradesh | State | Lucknow |
| 10 | Bihar | State | Patna |
| 11 | Sikkim | State | Gangtok |
| 13 | Nagaland | State | Kohima |
| 14 | Manipur | State | Imphal |
| 15 | Mizoram | State | Aizawl |
| 16 | Tripura | State | Agartala |
| 17 | Meghalaya | State | Shillong |
| 19 | West Bengal | State | Kolkata |
| 20 | Jharkhand | State | Ranchi |
| 21 | Odisha | State | Bhubaneswar |
| 22 | Chhattisgarh | State | Raipur |
| 23 | Madhya Pradesh | State | Bhopal |
| 24 | Gujarat | State | Gandhinagar |
| 26 | Dadra and Nagar Haveli and Daman and Diu | Union Territory | Daman |
| 27 | Maharashtra | State | Mumbai |
| 29 | Karnataka | State | Bengaluru |
| 30 | Goa | State | Panaji |
| 31 | Lakshadweep | Union Territory | Kavaratti |
| 32 | Kerala | State | Thiruvananthapuram |
| 33 | Tamil Nadu | State | Chennai |
| 34 | Puducherry | Union Territory | Puducherry |
| 35 | Andaman and Nicobar Islands | Union Territory | Port Blair |
| 36 | Telangana | State | Hyderabad |
| 38 | Ladakh | Union Territory | Leh |
| 39 | Arunachal Pradesh | State | Itanagar |
Explanation of Columns:
- State Code (GST Code): The GST code is a unique two-digit code used for GST-related purposes.
- State/Union Territory Name: The name of the Indian state or Union Territory.
- Type: Specifies whether it’s a State or Union Territory.
- Capital: The capital city of the respective state or Union Territory.