The GST council has included the UTGST in order to complete the constitutional obligation which it says The Constitution (One Hundred and First Amendment) Act, 2016, has added a new clause, namely Clause 26B on “State” in Article 366. As per this clause, “State” with reference to Articles 246A, 268, 269, 269A, and 279A includes a Union territory with Legislature yet even ‘State’ for the purposes of GST, added a Union territory with Legislature.
The purpose of UTGST bill is to apply a collection of tax on every Intra UT supply of goods and service in the union territories in absence of legislature and has similar properties as that of SGST. So all in all, the SGST cannot fulfill the needed provision here and for the same UTGST has taken its place. The Union Territory GST is applied to union territories of India namely Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands.
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Why Union Territory GST Is Implemented?
The main agenda has been taken up by the GST council for which the apex body has introduced the UTGST which will continue to provide benefits as same as SGST. Apart from that, New Delhi and Puducherry will still enjoy the SGST provisions as both states have their separate legislatures and can operate freely on the terms of SGST and has also been considered as the states by the GST Council.
For more understanding on the topic of the Union Territory GST, one can see the legislature rules and regulations written in the constitution, which says, As per Article 246(4) of Constitution, the Parliament has rights to form laws with respect to any matter for any part of the territory of India, which is not included in the State, including the matters enumerated in State List. By the verification of the aforementioned rules and laws of the constitution, the central government can forward the UTGST in the parliament for further approval.
Various combination of taxes can be as seen after the implementation GST like:
- For Supply of goods and/or services within a state (Intra-State): CGST + SGST;
- For Supply of goods and/or services within Union Territories (Intra-UT): CGST + UTGST;
- For Supply of goods and/or services across States and/or Union Territories (Inter-State/ Inter-UT): IGST
Read Also: Meaning of SGST, IGST, CGST with Input Tax Credit Adjustment
In the case of Input tax credit, Computation of utilization of Input Tax Credit of UTGST would be the equivalent like SGST. Here suggests, Input Tax Credit of SGST or UTGST would first set-off opposite SGST or UTGST individually. Output Tax liabilities and balance, if any, can be set-off against IGST Output Tax liabilities.
Want to know about the threshold limit for union territories without legislature.
“The taxpayer is not required to register under GST if his aggregate annual turnover is up to Rs. 40 lakhs in case of a supply of goods, 20 lakhs in case of the supply of services, and 20 lakhs in case of the supply of both goods and services in special category states.”
For Supply of goods and/or services within newly created Union Territories J & K and Ladakh, CGST+UTGST will be charged or IGST will be charged.
IGST
I HAVE A BILL OF CGST+UTGST, I AM FROM PUNJAB, HOW I COULD AVAIL THE BENEFIT OF GST.
You can claim credit of only cgst since credit of utgst is state specific.
My company staff meeting in div daman union territory so GST tax credit applicable or not.
You can claim the credit of CGST only since UTGST is territory specific. If you are registered in daman then the credit of UTGST can be availed.
Will anyone please tell me the highest tax rate of GST?
The highest rate of the slab under GST is 28%.
I am a tour operator from Andaman and Nicobar Islands (UT), people from other states pay me for arranging tours in the Andaman Islands. Which GST should I pay? IGST or UTGST + CGST
Please clarify the type of tour operator i.e. is he only providing travelling services or whole package includes travelling and accommodation services??