consumption

[Arun Aggarwal]

Sir,

I want to understand the difference between the local consumption and local sales under the GST regime if any .

Any commodity sold locally in the same state after charging SGST and CGST not necessarily will be consumed in the same state and can be sold further to any other state after charging IGST.

The problem may arise where the sales/clearances made by the units availing the area based exemptions and after getting some benefits in the SGST and CGST from the state govt on the local consumption and which in return can be further sold to some other state after charging IGST and were never actually consumed in the same state but were only sold.

Pls help me to understand this

Thanks

Arun

AI Summary

Destination-based taxation ensures tax revenue follows consumption; intra-state supplies attract SGST and CGST, inter-state IGST.
Supply replaces sales under GST while consumption remains distinct: GST is destination based so revenue goes to the consuming state. Intra state supplies attract SGST and CGST; subsequent inter state sale attracts IGST and allows the buyer to utilise input tax credit for taxes paid on the inward supply. Area based exemption units must clear goods on payment of GST and may claim budgetary support thereafter, with reimbursement applications made after payment of CGST/IGST and utilisation of any ITC for the relevant quarter.