SGST

SGST

SGST is one of the tax components of GST in India. SGST refers to State Goods and Service Tax. It is one of the three categories under Goods and Service Tax (CGST, IGST and SGST) with a concept of one tax one nation. SGST falls under State Goods and Service Tax Act 2017.

It is levied on the Intra State movement of goods and services. The revenue collected under State Goods and Services Tax is for the State Government. However, Input Tax Credit on it is given partly to the Centre and partly to the States as it will be utilized against the payment of both SGST and IGST.

The present state taxes of

• State Sales Tax
• VAT
• Luxury Tax
• Entertainment tax (unless it is levied by the local bodies)
• Taxes on lottery
• Betting and gambling,
• Entry tax not in lieu of Octroi,
• State Cesses and Surcharges etc.

are subsumed into one tax in GST called State GST.

FEATURES OF SGST

• Levied by the States through a statute on all transactions of goods and services made for a consideration.
• State GST would be paid to the accounts of the respective State.
• Exceptions would be exempted goods and services, goods kept out of GST and transactions below prescribed threshold limits.
• Basic features of law such as chargeability, taxable event, measure, valuation, classification would be uniform across these Statutes / States as far as practicable.

ADVANTAGES

• Reduction of cascading effect of taxes, as there will not be tax at two levels.
• It enhances the revenue capacity of the States and reduces their dependence on the Centre.

DISADVANTAGES

• It would seriously impair the Centre’s revenues. The reduction in fiscal transfers to the States would offset this loss, but still the Centre would want to have access to this revenue source for future needs.
• Major amendments to the Constitution of India will be required.
• The option may not be revenue neutral for individual States.
• The incremental revenues from the transfer of the Centre’s tax collection would benefit the higher-income States, while a reduction in fiscal transfers would impact disproportionately the lower-income States.
• Businesses will have to comply with tax laws of each State – which will definitely lack uniformity and harmony. At the same time, decision making will be impacted and may affect business stability.
• It would be impractical to bring inter-State services within the ambit of the State GST without a significant coordinating support from the Centre.
• There may be unhealthy competition among the States using local tax structure as a tool to attract industry within the States. This could lead to retaliatory measures by other States.

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Also Study:	Also Study:	Also Study:	Also Study:
GST and its features	History of GST	Advantages of GST	Disadvantages of GST
Constitutional aspects of GST	Liability of tax payer	Objectives of GST	IGST
CGST	GST Council	UTGST	SGST
Levy and collection of GST	Composition Levy	Online GST Registration	Exemptions under GST
Reverse Charge in GST	Taxable supply	Time of supply	Value of supply
Place of supply	Inter-state supply	Intra-state supply	Composite supply
Mixed supply	Composite and mixed supply	Online payment of GST	How to Claim TCS in GST
How to claim TDS in GST	Input tax credit under GST	Tax Invoice	Debit Note in GST
Credit Note in GST	Revised Invoice in GST	Supplementary Invoice	E-Way bill in GST
GST Returns	GSTN (Goods and Service Tax Network)	GST Suvidha Provider	GST Portal