WHEN TO CHARGE CGST/SGST or IGST - Supply of Goods?

Place of Supply determines the kind of tax that is to be applied. When the location of Supplier and the place of supply are in the same state, then Central GST (CGST) and State GST (SGST) applies.In case the location of Supplier and the place of supply are in two different states, Integrated GST (IGST) is levied.

Let us consider few examples to understand this.

Example 1:

ABC Pvt Ltd, a dealer in Karnataka of electrical items sold goods to XYZ Pvt Ltd in Karnataka worth Rs 25,000. GST rate is 12%.

In this case, ABC Pvt Ltd shall levy CGST rate of 6% and SGST rate of 6% as the place of supply is in same state. The dealer will collect a total of Rs 3,000 as GST, Rs 1,500 in relation to CGST and Rs 1,500 for SGST.

Example 2: ABC Pvt Ltd, a dealer in Karnataka of electrical items sold goods to XYZ Pvt Ltd in Tamil Nadu worth Rs 25,000. GST rate is 12%.

Now, ABC Pvt Ltd shall levy IGST rate of 12% as place of supply is Tamil Nadu. The dealer will collect a total of Rs 3,000 as IGST.


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