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Goods and Service Tax (GST) Questions and Answers

What is GST?

 

Goods and Service Tax is an Indirect Tax, It has been replaced with various taxes. Which was introduced in India on 1st July 2017 and it was applicable throughout India.

 

 

How many types of GST are there in India?

 

The following are the GST tax types in India.

  • CGST
  • SGST
  • IGST

 

 

What is SGST/CGST/IGST?

 

The SGST & CGST will be applicable incase of intra-state (Within State) supply goods or services.
The IGST will be applicable in case of inter-state (from one State to another state) supply of goods or services.

 

 

What are the taxes that GST has replaced?

 

The GST has replaced below mentioned different types of indirect taxes.

  • Service Tax
  • Central Excise Duty
  • Value Added Tax (VAT)
  • Central Sales Tax (CST)
  • Octroi
  • Entry Tax
  • Entertainment Tax
  • Luxury Tax
  • Purchase Tax
  • Countervailing Tax
  • Advertisement Tax

 

 

Which type of GST attract on local sales?

 

CGST and SGST will attract on local sales, the below is the accounting entry for local sales.

Customer A/c Dr

To Sales A/c

To CGST A/c

To SGST A/c

 

 

Which type of GST attract on interstate sales?

 

IGST will attract on interstate sales, the below is the accounting entry for interstate sales.

Customer A/c Dr

To Sales A/c

To IGST A/c

 

 

What is GST input tax credit?

 

Input tax credit means while paying GST for the particular period, the tax payer has to reduce input tax against output tax, which already paid on purchases or services received. In simple words if input GST is more than output GST called tax credit.

 

 

What is GST payable?

 

GST payable= GST collected on sales of goods or services – GST paid on purchase of goods or services

 

 

How to set off input tax credit against tax liability?

 

You have to set-off tax liability as per the below following order.

 

Input Tax Credit               Set-off Against Liability

Central Tax                       Central tax integrated tax

Integrated Tax                   Integrated tax, central tax and state tax

State Tax                          State tax and integrated tax

 

 

 

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