UTGST – Union Territory Goods and Service Tax

Tally Solutions |Updated on: November 4, 2022

• UTGST full form and UTGST meaning
• What is UTGST
• UTGST state list includes
• What are the 3 types of GST possible after UTGST’s inception in GST
• Order of utilization of credits taking into account of UTGST in GST
• UTGST Rates

UTGST full form and UTGST meaning

The UTGST Act expands to Union Territory Goods and Service Tax.

UTGST, the short form of Union Territory Goods and Services Tax, is nothing but the GST applicable on the goods and services supply that takes place in any of the five territories of India, including Andaman and Nicobar Islands, Dadra and Nagar Haveli, Chandigarh, Lakshadweep and Daman and Diu called as Union territories of India.

Union Territory GST will be charged in addition to the Central GST (CGST)

What is UTGST?

The reason behind UTGST applicability in GST is that the common State GST (SGST) cannot be applied in a Union Territory without legislature.

To address this issue, GST Council has decided to have Union Territory GST Law (UTGST) which would be on par with SGST. However, SGST can be applied in Union Territories such as New Delhi and Puducherry, since both have their individual legislatures, and can be considered as “States” as per GST process.

UTGST State List Includes

UTGST applies to only those union territories where we do not have a separate legislature and that list includes the following union territories :

• Chandigarh
• Lakshadweep
• Daman and Diu
• Dadra and Nagar Haveli
• Andaman and Nicobar islands
• Ladakh

What are the 3 types of GST possible after UTGST’s inception in GST

There could be the following combination of taxes applicable for any transaction:

• 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

Order of utilization of credits taking into account of UTGST in GST

In the case of utilization of Input Tax Credit of UTGST in an orderly manner, the treatment to be followed is the same as that of SGST. To sum this up, Input Tax Credit of SGST or UTGST would first set off against SGST or UTGST respectively. Output Tax liabilities and balance, if any, can be set off against IGST Credits available.

With the new rule, the IGST credit needs to be completely utilized before off-setting it with CGST or SGST. The order of setting off ITC of IGST can be done in any proportion and any order towards setting off the CGST or SGST output after utilizing the same for IGST output.

UTGST Rates

Union Territory GST contains same tax rates of 0%, 5%, 12%, 18% and 28%. Tax exemption criteria for goods and services decided by the government for SGST will be the same for UTGST.

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