The India Localization Tax Engine SuiteApp enables you to calculate Goods and Services Tax (GST) on transactions. GST is an indirect tax imposed in India on the supply of goods and services, right from the manufacturer to the consumer. It is a consumption-based and destination-based tax; therefore taxes are paid to the state where the goods and services are consumed and not the state in which they were produced.
Transactions made within single state (Intra-State) are imposed with Central (CGST) by the Central Government and State GST (SGST) by the State Government.
Transaction with imported goods or services made in between states (Inter-State) are imposed with Integrated GST (IGST) by the Central Government.
GST Tax Components
- CGST (Central GST) — This is the tax to be collected by the Central Government on an intra-state sale.
- SGST (State GST) / UTGST (Union Territory GST) — This is the tax to be collected by the State/Union Territory Government on an intra-state sale.
- IGST — This is the tax to be collected by the Central Government on an inter-state sale and import.
GST Tax Rate Structure
The tax structure of GST have the following rates:
- Nil Rated (0%) – This is a nil tax rate applied on essential goods and services. This means it will not have any effect on the amount of the item or service.
- Exempted – This applies to supplies exempted from tax liability. Supplies are taxable but they do not have GST and Input Tax Credit (ITC) cannot be claimed.
- Lower Rate (5%) – This rate is mostly applied on goods and services included in the Consumer Price Index (CPI) market basket and items for mass consumption.
- Standard Rate (12% and 18%) – This rate is mostly applied on goods and services that includes capital goods, industrial intermediaries, iron and steel, financial, and telecommunication services.
- Higher Rate (28%) – This rate is applied on luxury goods and services.