Who should collect GST?

GST is a destination based tax i.e. the tax should be received by the state in which the goods or services are consumed and not by the state in which such goods are manufactured.

Here are some scenarios which will help your understanding about GST calculation and Payment.

Scenario 1: Within the state

A dealer in Karnataka supplies goods to the consumer in Karnataka worth Rs. 1,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%, in such case the dealer collects Rs. 180 and Rs. 90 will go to the central government and Rs. 90 will go to the Karnataka government.

Scenario 2: Interstate (from one state to another)

Now, if the dealer in Karnataka had supplied goods to a dealer in Tamil Nadu worth Rs. 1,000. Let’s say the GST rate is 18%, the dealer will charge as IGST and this amount of Rs. 180 will go to the central government.

Scenario 3: Let’s make this a little more complex

Mr. A (Trader in Bangalore, Karnataka) sold goods worth Rs 1000 to Mr. B (Trader in Mysore, Karnataka) and then Mr. B sold goods worth Rs 1,200 Mr. C (Trader in Coimbatore, Tamil Nadu) and lastly Mr. C sold goods worth Rs 1,600 to Mr. D (Trader in Chennai, Tamil Nadu).

Mr A will collect a total of Rs 90 as SGST and Rs 90 and CGST and make the payment through the GST portal.

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