CHAPTER 3. CHARGE OF CGST, UTGST/SGST, IGST&CONPENSATION CESS





CGST
There shall be charged a tax
·         Called the central tax
·         On all intra state supplies of goods or services or both
·         Except on the supply of alcoholic liquor for human consumption

CGST shall be levied on value determined under sec.15 of CGST Act
CGST shall be levied at such rates not exceeding 20% as may be notified by the central Govt. on the recommendations of the Council

IGST
There shall be levied a tax
·         Called the Integrated Tax
·         On all interstate supplies of goods and services or both
·         Except on the supply of alcoholic liquor

IGST on import of goods

IGST on imports shall be collected
·         In accordance with provisions of Sec.3(7) of Customs Tariff Act, 1975
·         On value as determined under the said Customs Tariff Act, 1975
·         At point when duties of customs are levied under Customs Act, 1975

Manner of computation of Customs Duty after GST
Duty %
Duty  `

Value for levy of customs duty
-
-
1,00,000
Add : Basic Customs Duty
10%
10,000
10,000
Add : EC and SHEC @ 3% on BCD
3%
300
300
Add : Any other customs duty(safeguard, anti-dumping etc.)
-
-
-
                                   Sub total

10,300
1,10,300
Add IGST on 1,10,300
28%
30,884
30,884
Add : GST Compensation Cess on 1,10,300
12%
13,236
13,236
Total import duties for customs

54,420
1,54,420

RCM
·         On notified categories of supply of goods or services or both,
·         the tax shall be paid by recipient of such goods or services or both and;
·         All the provisions of this act shall apply to such recipient as if he is a person liable for paying the tax
Purchases from unregistered suppliers-Always RCM on registered person




GST COMPENSATION CESS
The GST Act provides for compensation to states for the loss of revenue arising due to implementation of GST for a period of 5 years(ie, transition period*) from the said date of implementation.
*transition period means 5 years from the transition date. Transition date shall mean the date on which the SGST Act of the concerned state comes into force.
CGST credit cannot be utilized for payment of SGST/UTGST. Similarly, SGST/UTGST credit cannot be utilized for payment of CGST.
Transferof input tax credit
Section 53 of CGST Act provides simple but important modus operandi in respect of post CGST utilisation towards IGST liability. Under section  49(5)(b),(c) and (d) of the Act, CGST/SGST/UTGST credits can be utilised by a   tax payer on priority basis to respective CGST/SGST/UTGST dues first. Then, in case of CGST, balance, if any, can be used to pay towards IGST. If used so, there shall be reduction in central tax caused by Central Government and equal credit shall be ensured to IGST in the prescribed manner.
In other words, if CGST is utilised to pay towards dues of IGST, there shall be reduction in CGST on such utilisation and the Central Government shall transfer equivalent amount to the credit of IGST account. Thus, in this manner the Central Government shall ensure due credit to IGST.
Such treatment shall be ensured by the Central Government for UTGST and SGST also in respective cases.
It may be noted that equivalent provision is there in Section 18 of IGST Act, 2017

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