UTGST stands for Union Territory Goods and Services Tax. It is one of the components of the GST regime in India, along with the CGST, SGST, and IGST. UTGST is applicable on the supply of goods and services within the Union Territories of India, which are regions that are directly governed by the Central government.
These Union Territories are:
- Andaman and Nicobar Islands
- Lakshadweep
- Dadra and Nagar Haveli
- Daman and Diu
- Chandigarh
UTGST is levied and collected by the Central government, in addition to CGST, on the intra-UT supply of goods and services. The rate of UTGST is equal to the rate of SGST in the respective states. The revenue collected from UTGST is shared between the Central government and the Union Territory government, as per the recommendations of the GST Council.
Benefits of implementing UTGST
The main benefits of implementing UTGST are:
- It simplifies the tax structure and reduces the multiplicity of taxes in the Union Territories.
- It eliminates the cascading effect of taxes and lowers the tax burden on consumers and businesses.
- It enhances the tax compliance and administration in the Union Territories.
- It promotes a uniform and harmonised tax system across the country.
- It boosts the economic growth and development of the Union Territories.
List of UTGST states
The following table shows the list of UTGST states, along with their respective codes and abbreviations.
| Code | Abbreviation | Name |
| 35 | AN | Andaman and Nicobar Islands |
| 31 | LD | Lakshadweep |
| 26 | DN | Dadra and Nagar Haveli |
| 25 | DD | Daman and Diu |
| 4 | CH | Chandigarh |
How is the UTGST levied and collected?
The UTGST is levied and collected by the Central government on every intra-UT supply of goods and services. The UGST rate does not exceed 20%, as notified by the Central government on the recommendations of the GST Council. The UTGST is charged along with the CGST on every taxable supply.
The following example illustrates how UTGST is levied and collected:
Suppose that a dealer in Chandigarh sells goods worth Rs. 10,000 to a customer in Chandigarh. The GST rate applicable on these goods is 18%, comprising 9% CGST and 9% UTGST. The dealer will charge Rs. 1,800 as GST on this transaction, out of which Rs. 900 will be CGST, and Rs. 900 will be UTGST. The dealer will collect this amount from the customer and deposit it with the Central government.
Exemption from UTGST
The central government has the power to grant exemption from UTGST to any goods or services or any person or class of persons, as per section 8 of the UTGST Act. The exemption can be granted either absolutely or subject to such conditions as may be specified in the notification. The exemption can be granted either prospectively or retrospectively, as deemed fit by the central government.
UT GST applicability
Output liabilities of the taxable person as per the UTGST Act can are often explained as follows:
| Supply type | Output tax liability | 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 |
UTGST rates
The rates of UTGST are determined by the Central government on the recommendations of the GST Council. The rates are notified through notifications issued under section 7 of the UTGST Act. Union Territory goods and services, which are the full form of UTGST tax has the same rates as State Goods and Services Tax. So, the UTGST rates are 0%, 5%, 12%, 18%, and 28% respectively. Further, the exemption rules for goods and services are also similar to SGST. The rates are aligned with the rates of SGST in the respective states.
The current rates of UTGST (as on August, 2023) are as follows:
| Rate | Goods | Services |
| Nil | Essential goods such as food grains, milk, eggs, etc. | Essential services such as health care, education, etc. |
| 0.25% | Rough diamonds and precious stones | - |
| 3.00% | Gold, silver, and other precious metals | - |
| 5.00% | Commonly used goods such as tea, coffee, spices, etc. | Transport services such as railways, airways, etc. |
| 12.00% | Processed foods such as biscuits, cakes, etc. | Accommodation services such as hotels, lodges, etc. |
| 18.00% | Industrial goods such as machinery, chemicals, etc. | Financial services such as banking, insurance, etc. |
| 28.00% | Luxury goods such as cars, motorcycles, etc. | Entertainment services such as cinema, amusement parks, etc. |
Documents required for UTGST registration
The documents required for UTGST registration are the same as the ones required for GST registration. The following is a list of the common documents required for UTGST registration:
- PAN card of the applicant
- Aadhaar card of the applicant
- Proof of business address such as rent agreement, electricity bill, etc.
- Proof of business identity such as a partnership deed, certificate of incorporation, etc.
- Bank account details such as cancelled cheque, bank statement, etc.
- Photograph and digital signature of the applicant
- Authorisation letter or board resolution for authorised signatory
The applicant can apply for UTGST registration online through the GST portal by filling the relevant forms and uploading the required documents. The registration process is completed within 3 working days after verification by the GST officer. The applicant will receive a GSTIN (GST identification number) which is a 15-digit alphanumeric code that serves as a unique identity for the taxpayer under GST.
Additional Read: GST Calculator
