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CA Intermediate · Taxation · GST in India - An Introduction

Mehta Traders, a registered supplier in Gujarat, sells goods to a buyer in Rajasthan. Which of the following taxes will be levied on this supply, and which authority will collect it?

IGST is levied, and it is collected by the Central Government. A sale from Gujarat to Rajasthan is an inter-State supply, and the IGST Act applies to such supplies, whereas CGST and SGST apply only when the supply is within one State.

  1. ACGST and SGST, both collected by the State Government of Gujarat
  2. BIGST, collected by the Central GovernmentCorrect
  3. CCGST and SGST, collected by the Central Government and the Rajasthan Government respectively
  4. DIGST, collected by the Rajasthan Government alone

Explanation

A supply of goods from Gujarat to Rajasthan is an inter-State supply. Inter-State supplies attract IGST, which is levied and collected by the Central Government and later apportioned. CGST and SGST apply only to intra-State supplies, so the other options misapply the tax structure.

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