If an individual consumes goods or services within a single state in India, he or she would be liable to pay both Central GST (CGST) and State GST (SGST) to the respective governments.
Under the Goods and Services Tax (GST) regime, intra-state supplies of goods and services are subject to both CGST and SGST. The CGST is levied by the Central Government, while the SGST is levied by the respective state government. The rates for CGST and SGST are the same and are fixed by the GST Council.
Being a destination-based tax, the GST is charged at the point of consumption. For example, if a person buys goods or services in Maharashtra, he or she would be liable to pay both CGST and SGST to the Maharashtra government, irrespective of where the goods or services were produced.
The GST system is designed to prevent the cascading effect of taxes, which is the taxation of taxes. To prevent this, the GST allows for the input tax credit (ITC) mechanism. The ITC mechanism allows businesses to claim the credit of the taxes paid on the purchases made for the business. This credit can be used to offset the GST liability on the output supplies made by the business.
The GST system also allows for the composition scheme for small businesses with a turnover of up to Rs. 1.5 crore. Under the composition scheme, businesses can pay a fixed percentage of their turnover as GST and are not required to maintain detailed records of their purchases and sales.
In conclusion, if an individual consumes goods or services within a single state in India, he or she would be liable to pay both Central GST (CGST) and State GST (SGST) to the respective governments. The GST is a destination-based tax, and the input tax credit mechanism is used to prevent the cascading effect of taxes. The composition scheme is available for small businesses with a turnover of up to Rs. 1.5 crore. The GST system has brought significant changes to the taxation system in India and has made it simpler and more streamlined.
