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Glossary

What is UTGST?

The tax that stands in for SGST when a sale happens inside a union territory such as Chandigarh.

Updated

In short

UTGST is the union territory's share of GST, charged with CGST on supplies within a union territory that has no legislature. SimpleERP lets you name a tax component UTGST in Settings so a union territory branch bills correctly.

UTGST, Union Territory Goods and Services Tax, is charged with CGST on supplies made within a union territory that has no legislature of its own, such as Chandigarh, Ladakh or Lakshadweep. It replaces SGST there at the same half rate. Supplies into or out of a union territory are inter-state and carry IGST, so UTGST only arises when supplier and place of supply are in the same territory.

UTGST: a worked example

Suppose Lakshmi Steel Furnitures opened a showroom registered in Chandigarh and sold an office chair for ₹6,450 to a Chandigarh buyer. Assuming 18% GST, the invoice would show CGST 9% of ₹580.50 and UTGST 9% of ₹580.50. The same chair sold from Coimbatore to Chandigarh is inter-state and carries IGST of ₹1,161. Rates change, so confirm the rate for your goods with your CA or the GST portal before you rely on it.

Where the sale happensTax chargedAmount on ₹6,450
Chandigarh to ChandigarhCGST 9% + UTGST 9%₹580.50 + ₹580.50
Coimbatore to ChandigarhIGST 18%₹1,161
Coimbatore to CoimbatoreCGST 9% + SGST 9%₹580.50 + ₹580.50

How does UTGST differ from SGST?

Only in who levies it and where. Everything the buyer sees on the invoice works the same way as SGST.

SGSTUTGST
Levied byThe state governmentThe centre, for the union territory
LawThe state's own GST ActThe UTGST Act, 2017
Charged on supplies withinA state, and Delhi, Puducherry or Jammu and KashmirChandigarh, Ladakh, Lakshadweep, Andaman and Nicobar Islands, or Dadra and Nagar Haveli and Daman and Diu
RateHalf the GST rateHalf the GST rate
Credit used againstSGST, then IGSTUTGST, then IGST

Which UTGST edge cases catch out old invoice templates?

Ladakh became a union territory without a legislature on 31 October 2019, so a supply within Ladakh carries UTGST where it once carried Jammu and Kashmir SGST. Dadra and Nagar Haveli and Daman and Diu merged into one union territory on 26 January 2020. And a business with GSTINs in Tamil Nadu and Chandigarh makes an inter-state supply, with IGST, when it moves stock between them.

FAQ

Questions, answered

Is UTGST charged at a different rate from SGST?

UTGST is not charged at a different rate. UTGST is charged at the same half rate that SGST would be, so an 18% supply in Chandigarh is CGST 9% plus UTGST 9%. Only the law that levies it and the account the money goes to are different.

Do I charge UTGST when I ship goods to Chandigarh from Tamil Nadu?

UTGST is not charged on goods shipped from Tamil Nadu to Chandigarh. A supply from a state to a union territory is inter-state, so you charge IGST at the full rate. UTGST applies only when the supplier is registered in that union territory and the place of supply is in the same territory.

Why does Delhi charge SGST and not UTGST?

Delhi has its own legislative assembly, which passed its own GST Act, so it levies SGST like a state. The same applies to Puducherry and Jammu and Kashmir. UTGST is only for union territories that have no legislature.

Can UTGST credit be used to pay CGST?

UTGST credit cannot pay CGST. UTGST credit works like SGST credit: it is used first against output UTGST and then against IGST, but never against CGST. Keep the heads separate in your books so your GSTR-3B set-off is easy to check.

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