Levy and Charge of GST: Supply, Taxable Person, CGST/SGST/IGST and Intra vs Inter-State Supplies

Overview

This topic answers the “charging section” style questions:

• What is taxed under GST? → the taxable event is supply (concept).
• Who pays GST? → the taxable person (generally a registered person) (concept).
• Which GST applies? → depends on whether the supply is intra-state (CGST+SGST/UTGST) or inter-state (IGST) (concept).

In exams, you’ll often be asked to:

• define supply and taxable person,
• explain levy/charge in simple words,
• differentiate intra-state vs inter-state and state which tax applies.

Learning objectives

You should be able to:

• Explain levy and charge of GST in simple language (concept).
• Define supply as the taxable event and give examples.
• Explain taxable person and why registration matters.
• Identify when CGST+SGST vs IGST applies using a basic decision rule.
• Explain why place of supply is important (overview).

Levy and charge: what does it mean?

In tax law language:

• Levy means the law “imposes” a tax (i.e., the tax is created by statute).
• Charge means the law specifies when and on what the tax is payable (taxable event), and who is liable (concept).

So, for GST:

• the law levies GST, and
• it charges GST on the supply of goods/services by a taxable person (concept).

Taxable event under GST: “supply” (core)

Under GST, the taxable event is supply (not manufacture, not only sale). This is why GST applies to many types of transactions like sale, transfer, barter, exchange, license/lease, etc., when done in the course of business (concept).

Remember:

• Supply is the “trigger” that makes GST relevant.
• Once supply exists, you identify: taxable/exempt, value, time, place, and applicable tax (CGST/SGST/IGST) (concept).

What is “supply”? (simple meaning)

At a basic level, supply means making goods or services available to another person for a consideration (price) in the course of business (concept).

Examples (easy):

• selling goods to a customer,
• providing consultancy services for a fee,
• leasing a machine for rent.

Note: The detailed legal definition includes more cases; you’ll learn “consideration”, “business”, and “schedule” items in later topics.

Taxable supply vs exempt supply vs nil-rated vs non-GST (starter clarity)

Students often confuse these terms. A starter distinction:

You don’t need deep ITC rules here—just keep the vocabulary clean for short answers.

Taxable person: meaning and importance

A taxable person is a person who is registered or is required to be registered under GST and is liable to pay GST (subject to threshold and conditions) (concept).

Why this matters:

• only a registered person can generally issue a proper tax invoice with GST (concept),
• ITC claim is linked to compliance and invoices,
• the system expects returns and payments from registered taxable persons.

GST components: CGST, SGST/UTGST, IGST (revision)

• CGST: Central GST on intra-state supplies.
• SGST/UTGST: State/UT GST on intra-state supplies.
• IGST: Integrated GST on inter-state supplies and imports (concept).

Intra-state vs inter-state supply (decision table)

The simplest exam memory aid:

This decision depends on place of supply rules (next section).

Place of supply: why it matters (overview)

GST is destination-based, so the law needs a rule to decide the destination/consumption location. That rule-set is called place of supply (concept).

Place of supply helps to:

• decide whether a supply is intra-state or inter-state,
• decide whether IGST applies,
• allocate revenue to the correct State/UT (concept).

Import/export in the levy framework (quick note)

• Imports are treated like inter-state supplies → generally IGST applies (concept).
• Exports are generally treated as zero-rated supplies (overview); detailed rules are in the refunds/exports topic.

Flowchart: how to decide which GST applies

Start
  |
  v
Is there a SUPPLY?  ---- No ---> GST not triggered (concept)
  |
 Yes
  |
  v
Identify PLACE OF SUPPLY (destination) (overview)
  |
  v
Compare supplier state with place of supply
  |
  +--> Same State/UT  ---> Intra-state ---> CGST + SGST/UTGST
  |
  +--> Different State/UT ---> Inter-state ---> IGST

Mini illustrations (2 cases)

Case 1 (Intra-state): Supplier in Karnataka sells goods to a buyer in Karnataka; place of supply is Karnataka → CGST + SGST apply (concept).

Case 2 (Inter-state): Supplier in Gujarat supplies services to a recipient in Maharashtra; place of supply is Maharashtra → IGST applies (concept).

Quick recap (1-minute revision)

• GST is levied and charged on supply by a taxable person (concept).
• Decide the tax type using place of supply:
  • intra-state → CGST + SGST/UTGST
  • inter-state/import → IGST
• Keep basic terms clear: taxable/exempt/nil-rated/non-GST.