Question

Consider the following statements with respect to Goods and Service Tax(GST) in India :

1. India follows a dual GST model with the Centre and the States simultaneously levying it on a common base.
2. Interstate GST is levied and collected by respective trading states.

Which of the above statement/s is/are correct ?

• A. Both 1 and 2
• B. None of the above
• C. 1 only
• D. 2 only

Answer 1

The correct option is C 1 only

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> India follows a dual GST model with the Centre and the States simultaneously levying it on a common base. The GST, levied by the Centre is called Central GST (CGST) and that levied by
the States is called State GST (SGST). This is to protect the fiscal federalism of the country as both the levels of government have the constitutional mandate to levy and collect specific taxes.

SGST is applicable only if both the buyer and seller are located within the state. CGST does not have any such restriction regarding location.The Centre(and not states) levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services.

There is seamless flow of input tax credit from one State to another and proceeds of IGST are apportioned among the States.CGST and SGST are levied at rates which are mutually agreed upon by the Centre and the States.