## What is UTGST?

UTGST stands for Union Territory Goods and Services Tax, is the equivalent of SGST for Union Territories. While SGST is levied by state governments on intra-state transactions, UTGST is imposed by Union Territory governments on the supply of goods and services within their respective territories.

## List of UTGST States

Here is a complete list of UTGST States in India:

### Abbreviation

Andaman and Nicobar Islands 35 ANI
Chandigarh 4 CHD
Dadra and Nagar Haveli and Daman and Diu 26 DNDD
Delhi 07 DL
Puducherry 34 PY

## When is UTGST applicable?

UTGST applies when goods or services are supplied within a Union Territory (intra-UT). The output liabilities of a taxable person under the UTGST Act are often described as follows:

### Section Applicable

Supplies made in a Union Territory without a governing body UTGST and CGST (within the UT border) As per Section 8(1) and 8(2) of the IGST Act
Supplies made between two Union Territories without a governing body Integrated GST (Between two or more UT) As per Section 7(1) and 7(3) of the IGST Act
Supplies arranged between a Union Territory without a governing body and a State or UT with the governing body. Integrated GST As per Section 7(1) and 7(3) of the IGST Act

## How to Calculate UTGST?

Calculating UTGST is straightforward.

Here’s a basic breakdown:

STEP 1: Determine the taxable value: This is the value of the goods or services sold.
STEP 2: Identify the UTGST rate: The UTGST rate is determined by the Central government and is usually the same as the SGST rate for the corresponding state.
STEP 3: Calculate the UTGST amount: Multiply the taxable value by the UTGST rate.

## UTGST Formula

The formula for calculating UTGST is:

UTGST = (Value of Goods) x (UTGST Rate/100)

## UTGST Examples

Consider a business in Karnataka, a state in India, selling goods worth ₹10,000. Under GST, the taxes applied are Central GST (CGST) and State GST (SGST). If the GST rate is 18%, it is split into 9% CGST and 9% SGST.

• CGST: ₹10,000 x 9% = ₹900
• SGST: ₹10,000 x 9% = ₹900
• Total GST: ₹900 (CGST) + ₹900 (SGST) = ₹1,800

Now, let’s look at a similar business in the Union Territory of Lakshadweep. Since Lakshadweep does not have its own legislature, instead of SGST, UTGST is applied. For the same goods worth ₹10,000 with an 18% GST rate, the breakdown would be:

• CGST: ₹10,000 x 9% = ₹900
• UTGST: ₹10,000 x 9% = ₹900
• Total GST: ₹900 (CGST) + ₹900 (UTGST) = ₹1,800

In both cases, the total GST amount is ₹1,800, but the type of state-level tax differs. In Karnataka, it is SGST, while in Lakshadweep, it is UTGST.

## Exemption from UTGST

There are certain exemptions from UTGST, such as:

• The supply of goods and services to the Central Government, a state government, or a local authority
• The supply of goods and services that are exported outside India
• The supply of goods and services that are zero-rated or tax-free

Under Section 8 of the UTGST Act, the Central Government has the authority to grant exemptions from UTGST.

## UTGST Slab Rates

The UTGST rates are 0%, 5%, 12%, 18% and 28%.

Here’s a detailed table explaining UTGST Rates

### Examples of Goods and Services

0% Basic food items (e.g., rice, wheat), unprocessed agricultural products
5% Packaged food items, certain essential goods (e.g., tea, coffee)
12% Processed food items, some consumer goods (e.g., branded apparel, footwear)
18% Services (e.g., restaurant services, telecom services), most goods (e.g., electronic items, furniture)
28% Luxury items and sin goods (e.g., high-end cars, tobacco products)

## Benefits of UTGST

#### 1. Simplified Tax Structure

UTGST, along with CGST, creates a simpler tax framework within Union Territories. This reduces complexity and makes the tax process more straightforward for businesses.

#### 2. Revenue Sharing with Central Government

UTGST ensures that Union Territories receive their share of tax revenue, leading to better resource allocation and development within these regions.

#### 3. Consistency Across the Nation

The implementation of UTGST maintains a consistent tax system across India, helping businesses operate efficiently without dealing with varying tax regimes.

#### 4. Supports Economic Integration

UTGST helps integrate Union Territories into the national economy by ensuring they are part of the unified tax system, promoting inclusive growth.

#### 5. Less Burden on Consumers

By streamlining the tax process and avoiding multiple layers of taxation, UTGST helps reduce the overall tax burden on consumers in Union Territories, making goods and services more affordable.

### 1. What is the full form of UTGST?

UTGST stands for Union Territory Goods and Services Tax. It is a component of the GST system in India that applies specifically to Union Territories without their own legislatures.

### 2. Who is liable to pay UTGST?

Businesses and individuals who supply goods or services within a Union Territory are liable to pay UTGST. This includes both sellers and service providers operating in these regions, who must collect UTGST from their customers and remit it to the government.

### 3. Who collects UTGST?

The Union Territory government collects the revenue generated from UTGST. UTGST replaces SGST in Union Territories.

### 4. How can I claim a refund under UTGST?

To claim a refund under UTGST, businesses need to submit a refund application via the GST portal, specifying the amount of UTGST they wish to recover. They must provide all necessary documentation, including tax invoices, proof of payment, and any other relevant records. The application will be reviewed by tax authorities, and once it is approved, the refund will be processed and credited to the business’s account.

### 5. How does the input tax credit work under UTGST?

Input tax credit (ITC) under UTGST works similarly to other GST components. Businesses can claim ITC for UTGST paid on inputs used in the course of their business. This allows them to offset UTGST on their purchases against the UTGST they collect on sales.