'Is It Normal Or Do I Need To Go Back To School?': Reddit User Raises Questions Over Levy Of CGST, SGST & IGST

The Goods and Services Tax or GST, system was brought into existence in 2017 to simplify the taxation system, which was long claimed to be complex. It was deemed to be the reason or an element acting as a hinderance in the Indian growth story.

Is This Normal?

Nevertheless, although, there are far fewer avenues that one has top encounter, the system can still sometimes be abstruse for some.

A Reddit user recently shared a post raising questions over the tax being levied on the transaction. The user shared a photograph of the receipt for internet services provided to the user.

In the receipt, the user was charged a total amount of Rs 576; apart from the basic plan amount of Rs 422, different taxes were charged on the transaction.

These taxes included CGST, amounting to Rs 38, SGST amounting to Rs 38 and then IGST amounting to Rs 76.

The user enquired in their post, "Is this normal or do I need to go back to school? They are charging IGST, SGST AND CGST."

The World of GST

Now, to understand the system better, we need to know the basics. Within the GST regime, we have the CGST or Central Goods and Services Tax, SGST or State Goods and Services, IGST or Integrated Goods and Services Tax, and UTGST or Union Territory Goods and Services Tax. In addition, the GST regime has 4 slabs: 5 per cent, 12 per cent, 18 per cent and 28 per cent.

What Can Be Levied & Where?

Now, as per rules, when it comes to a transaction carried out between entities within a state or intra-state transaction, both SGST and CGST are levied at the time of collection of the said tax.

Now, when it comes to transaction carried out by entities in two different states or Inter-state transactions, IGST comes into the picture, and its is applicable.

Therefore, SGST and CGST are charged on intra-state transactions. On the other hand, only IGST is gathered for interstate transactions. Thereafter, the IGST collected is then split between the state and the central government.