UTGST Full Form [Meaning & Applicability Explained]

Full Form Of UTGST & Meaning

UTGST stands for Union Territories Goods & Service Tax. UTGST is applicable when GST is levied on the Union Territories of India. SGST is not applicable to any of the union territories in India. The main reason behind formulating the UTGST bill is to levy and collect tax methodologically on every Intra Union Territory supply of goods and services, just like levied in the other states of India.

UTGST emphasises almost similar characteristics as that of SGST and CGST cannot take care of the necessary provisions in the union territories. Hence, there was a need for forming or introducing UTGST to serve the same purpose.

UTGST States List:

The State-wise Breakup Of UTGST consists of five regions of India, including-

• Andaman and Nicobar Island
• Dadra and Nagar Haveli
• Chandigarh
• Lakshadweep
• Daman and Diu

UTGST Rates

The UTGST or Union Territory Goods & Services charges the standard Indian rate which are-

0%, 5%, 12%, 18% and 28%

All exemptions from UTGST will be decided by government of India whilst keeping in mind the SGST rates.

Features Of UTGST

1. Delhi, Puducherry, Jammu & Kashmir, and Ladakh, etc are also included in our list of Indian Union Territories.
2. The 5 regions mentioned above are the ones where UTGST is applicable.
3. UTGST is nothing but the Goods and Services Tax applicable to the goods and services are consumed in any or all of these regions.
4. UTGST is not applicable anywhere else except these five regions.
5. People living and consuming goods/services or involved in purchasing and supplies in these regions need to pay Union Territory GST in addition to the Central Goods and Services Tax (CGST) to respective state governments.
6. To a certain extent, UTGST serves like SGST does in other Indian states.
7. Puducherry and Delhi (also are union territories) that are exempted from UTGST but need to pay SGST as both have their respective governing bodies.

UTGST Rules

1. SGST is not applicable to any of the union territories in India.
2. The main reason behind formulating the UTGST bill is to levy and collect tax methodologically on every Intra Union Territory supply of goods and services, just like levied in the other states of India.
3. UTGST emphasises almost similar characteristics as that of SGST and CGST cannot take care of the necessary provisions in the union territories so there was a need for forming or introducing UTGST to serve the same purpose.

UTGST Example

For example, if the applicable percentage rate of GST in India(n) state is considered to be 18% then this is how it will go-

• Sales From Gujarat- Sales To Gujarat for Rs. 50,000
• Type of Tax Applicable- CGST+SGST- 4500 + 4500= Rs. 9000
• Total GST received- Rs. 9000
• Sales From Gujarat- Sales To Maharashtra for Rs. 50,000
• Type of Tax Applicable- IGST- Rs. 9000
• Total GST received- Rs. 9000
• Sales From Dadra and Nagar Haveli- Sales To Dadra and Nagar Haveli for Rs. 50,000
• Type of Tax Applicable- CGST+UTGST- 4500 + 4500= Rs. 9000
• Total GST received- Rs. 9000
• Sales From Dadra and Nagar Haveli- Sales To Gujarat for Rs. 50,000
• Type of Tax Applicable- IGST= Rs. 9000
• Total GST received- Rs. 9000
• Sales From Gujarat - Sales To Chandigarh for Rs. 50,000
• Type of Tax Applicable- IGST= Rs. 9000
• Total GST received- Rs. 9000

GST In India

1. The GST is a single comprehensive indirect tax, levied on the production, sale, and consumption of goods and services across India.
2. It has replaced 3-5 taxes and has simplified the taxation structure of the country since its introduction in 2017.
3. There are different essential components of GST, and we will focus our discussion primarily on Union Territory Goods and Service Tax or UTGST.
4. Let us polish our knowledge about UTGST and topics relevant to it in a precise way here.

Advantages of GST

We all have a basic understanding by now what GST is. It will be worth knowing here the prominent advantages of this single, multi-stage tax precisely-

1. GST eliminates the unforeseen negative impact of tax
2. It comes backed with a simple online procedure
3. It has facilitated regulating the unorganised sectors appropriately
4. It has sidelined the complications developed by multiple taxes levied on goods and services earlier.
5. GST comes with a fewer number of compliances making it less complicated.
6. It enjoys a much high threshold for registration.
7. It will help the business to grow as GST helps to minimise the final marked price of goods/services (a single tax is levied only)

Difference Between CGST SGST IGST UTGST

• GST or Goods and Services Tax levied out in India are categorised into 4 types exclusively.
• They are known as- IGST CGST SGST UTGST
• Let's understand their full form-

1. IGST- Integrated Goods and Services Tax
2. SGST- State Goods and Services Tax
3. UTGST- Union Territory Goods and Services Tax
4. CGST- Central Goods and Services Tax

Legal Rules And Regulations For UTGST

1. According to Article 246(4) of the Indian Constitution, the Parliament has the right to frame all official laws on any matter for any part of the Indian territories, not covered under any State.
2. The Parliament can make laws on all matters that are enumerated in the State List.
3. By verification of the laws of the constitution and the rules, the central government has the right to forward UTGST in the Parliament to receive further approval.

Who Levies Union Territory GST or UTGST?

• Union Territory GST is collected by the Central Government if that specific UT does not have any Legislature or ruling of its own.
• For all those Union Territories (for example, Delhi) possessing a legislature of their own, it's the duty of their respective state government to timely collect the UTGST from there.
• For example, the state legislature of Jammu and Kashmir collects the JKGST.

Also Read: How to pay GST online?

Is UTGST applicable in Jammu and Kashmir?

1. According to Section 4 of the  Jammu and Kashmir Reorganisation Act 2019, the Union territory of Jammu & Kashmir will enjoy the status of a Union territory with its Legislature.
2. It also signifies that the Union territory of Jammu & Kashmir shall have the same recognition as that of a state.
3. It points to the fact that not UTGST but Jammu & Kashmir GST applies to the Union Territory of Jammu & Kashmir.
4. Previously, it was decided that JKGST will apply to the union territory of Ladakh as well.
5. However, now Section 2(7) of the Removal of Difficulties Order dated 30-10-2019 confirms that the people of Ladakh will pay UTGST as per the Union Territory Goods and Services Tax Act, 2017.
6. In brief, JKGST is applicable in J&K only and not in Ladakh.

Closing Note

• We hope that our in-depth guide on what is UTGST helped you with your research. GST is a singular multi-staged taxation system that has provisioned several benefits to its taxpayers, especially reducing the final goods/service consumption plus purchase/supplies cost.
• GST is furthermore divided into sub-categories depending on the geographical divisions made by the Indian constitution.
• You now know about GST quite a lot.
• Hopefully, the knowledge you gain here helps you in your endeavour!

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FAQs on UTGST

Q. What is UTGST full form?

Ans: The full form of UTGST is Union Territory Goods and Services Tax.

Q. Who will collect UTGST?

Ans: UTGST is collected by the Central Government of India.

Q. What is UGST?

1. In case of Union Territories or UT like Daman & Diu, the GST is collected by the Central Government instead of respective state.
2. Only for intrastate transactions CGST will be levied by the central government.

Q- What are the 3 types of GST?

Ans- The major 3 types of GST in India are-

1. IGST- Integrated Goods and Services Tax
2. SGST- State Goods and Services Tax
3. CGST- Central Goods and Services Tax

Q. What is IGST and UTGST?

Ans- IGST is levied on all interstate supply of goods and services while the UTGST is applicable when goods and services are supplied within the union territories.

Q. Is a GST software helpful, and what are the features to search for?

Ans: Yes, GST software can be of immense help to you, and it is indeed a quality investment.

1. Many business people are considering timely investment GST billing software to save time, complications, and energy.
2. Readymade GST invoice templates will help to save your time in creating new ones.
3. It becomes easier to track all the invoices sent. Automated notifications, specialised reports, and minimal scope to commit errors are all crucial benefits of GST billing software.
4. The features that you should look for in your GST software are tax management, fund accounting, expense tracking, billing and invoicing, purchase order, etc.

Q. What are the major highlights of the 38th GST Council Meeting 2019?

Ans: The meeting was held on the 18th of December 2019.

1. The due dates for GSTR-9 and GSTR-9C have been extended until 31st January 2020, which previously was 31st December 2019.
2. The amount of provisional ITC available is now limited to 10% instead of the previous 20%. Industrial land developers found exemption from the GST, applicable from 1st January 2020.
3. It increased the tax levitation rate on all lotteries from 12% to 28%. The meeting announced to release soon the Standard Operating Procedure for taking actions against the non-filing of GSTR-3B correctly.
4. GST Return due date has been extended for Northeastern states.

Q. Who is responsible for notifying UTGST rates?

Ans: The CBIC governed by the Government of India is responsible for notifying any changes or additions to the UTGST rate slabs.

Q. What Is UTGST Tax?

Ans: The UTGST full form is- Union Territories Goods And Services Tax which is collected by the government for cities and regions falling under Indian Union territories. It takes the place of SGST, & CGST like other Indian states.

Q. In which state is UTGST applicable?

Ans: The states where UTGST is applicable are-

• Dadra & Nagar Haveli
• Andaman & Nicobar Islands
• Lakshadweep
• Daman & Diu
• Chandigarh

Q. When was the UTGST Act implemented in India?

Ans: UTGST will be levied instead of SGST without the territorial jurisdiction or specified legislatures. The UTGST bill was passed on 6th April 2017.

Q. What Is UTGST Example?

Ans: The taxes which are levied instead of SGST(State Goods & Services Tax) on the 5 union territories of India is known as UTGST. The rate slabs are decided by the type of commodity type like-

• Daily Essentials
• Generic Automobile or Electronic Commodities
• Luxury Items & Accessories

Q. What is the maximum rate applicable for UTGST?

Ans: As per the suggestion of GST Council, the Central Government has notified that any person taxable under the UTGST Act shall not be charged over 20%.

Q. Is GST applicable To Union Territories?

Ans: Yes, Union Territory GST or UTGST is levied in all union territories of India instead of SGST, CGST & IGST.

Q. Is UTGST applicable in Haryana?

Ans: No, UTGST is not applicable in Haryana. Please read the above article and FAQ to understand the UTGST States in India.

Q. What is the difference between SGST and UTGST?

Ans: SGST is levied by the State Government of India as per your respective states while UTGST is applicable for all the 5 union territories of India.