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These all come under the GST law, The Central Government gathers the tax as per the transaction which is made, and They evaluate the Tax according to the movement of the goods If the movement is happening intrastate or interstate. The parliament has the right to make all the laws for the mentioned states in the list.
The mechanism of the taxes works according to the destination (State or Union Territory or Union Territory with a legislature), basically when the goods reach the destination only then are the taxes imposed on them, not where the goods are made. Earlier there were many types of taxes like Service tax, state VAT, etc but now, they have been replaced by SGST, CGST, IGST, and UTGST.
The movement determines the tax. Like the CGST tax is imposed Intrastate (Movement between the state itself) movement of supplies of both goods and services and this is governed by the CGST Act. Items like fresh milk, fruits, curd, bread, etc do not fall under GST for which ITC (Input Tax credit) can not be claimed. SGST is also imposed on the Intra State movement of goods but that is governed by the state government. According to section 8 of the GST Act that the taxes imposed on all Intra state supplies of goods and services shall not exceed 14% of each.
What is UTGST exactly?
UTGST stands for Union Territory Goods and Service Tax.UTGST is an indirect tax that is collected when Intra State goods or services are supplied, along with tax charged under the CGST Act, 2017.
SGST can be imposed in union territories such as New Delhi and Puducherry because they both have their legislature. UTGST is not applicable other than Union Territories but to a certain extent, UTGST works as SGST in other states. The government must timely collect the UTGST from their Union territories.
By the laws, The central government can make the changes and has the right forward the UTGST to parliament for further approval.
Rates and Places of Application
But out of these Delhi and Puducherry do not fall under the UTGST as both territories have their legislature.
UTGST state list includes Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Island, and there are two types of union territories in India one with the legislature and one without legislature.
UTGST tax rates are similar to the SGST:- 0%, 5%, 12%, 18. These taxes are approved by the government and these should not be excessed 20%.
UTGST Act is passed by the parliament but it is administered by an executive for the Union Territory.
The goods which are accepted in the UTGST do not approve the movement of alcohol for human consumption.
These have defined legislature and elected government. The other union territories are governed by the central government of India then there is the union territory which is governed by the representative appointed by the central government. He is the representative of India’s President. The UTGST Act governs these UTs.
Conclusion
UTGST has the same mechanism as SGST and CGST but these two could not take care of the necessary provision in the union territories, hence the UTGST was created. The reason behind having UTGST is that the common GST can not be applied in a union territory without legislature. After having this issue the GST council decided to have this tax which is similar to the SGST.
