GST Apportionment Rules & Settlement to States

How Funds Collected under GST by the Central Government be apportioned and distributed among the states. This basis question is answered below. The Distribution of GST to states from the CG varies from situation to situation and is different in case of Imported Goods. Also read our earlier article explaining the benefits of GST, and also free lecture videos on GST. GST can solve existing corruption problems and will be helpful for the Indian Economy. The below article is based on Chapter VII of GST Rules.

GST Apportionment and Settlement to States including how gst money is distributed among the states by the central govenrment

Unregistered Persons : GST Apportion & Settlement

Out of the IGST paid to the Central Government in respect of inter-State supply of goods and/or services to an unregistered person or to a taxable person paying tax under section 8 of the CGST Act, the amount of tax calculated at the rate equivalent to the CGST on similar intra-state supply shall be apportioned to the Central Government.

Registered Taxable Persons : GST Apportion & Settlement

Out of the IGST paid to the Central Government in respect of inter-State supply of goods and/or services made in a year to a registered taxable person, where such taxable person is either not eligible for input tax credit or where he does not avail of the said credit within the specified period and thus remains in the IGST account after expiry of the due date for filing of annual return for such year in which the supply was made, the amount of tax calculated at the rate equivalent to the CGST on similar intra-state supply shall be apportioned to the Central Government.

Goods Imported : GST Apportion & Settlement

Out of the IGST paid to the Central Government in respect of import of goods and / or services by an unregistered person or by a taxable person paying tax under section 8 of the CGST Act, the amount of tax calculated at the rate equivalent to the CGST on similar intra-state supply shall be apportioned to the Central Government.

Out of the IGST paid to the Central Government in respect of import of goods and / or services made in a year by a registered taxable person, where the such taxable person is either not eligible for input tax credit or where he does not avail of the said credit within the specified period and thus remains in the IGST account after expiry of the due date for filing of annual return for such year in which the supply was received, the amount of tax calculated at the rate equivalent to the CGST on similar intra-state supply shall be apportioned to the Central Government.

Balance Amount : GST Apportion & Settlement

The balance amount of tax remaining in the IGST account in respect of the supply for which an apportionment to the Central Government has been done under sub-section (1), (2) or (3) shall be apportioned, in the manner and time as may be prescribed, to the State where such supply takes place as per section9 5 or 6.

General Rule : GST Apportion & Settlement

The provisions of sub-sections (1), (2), (3), (4) and (5) relating to apportionment of tax shall mutatis mutandis apply to the apportionment of interest and penalty realized in connection with the tax so apportioned.

Reductions : GST Apportion & Settlement

Where an amount has been apportioned to the Central Government or a State Government under sub-sections (1), (2), (3), (4), (5) and (6), the amount collected as IGST shall stand reduced by an amount equal to the amount so apportioned and the Central Government shall transfer to the CGST account an amount equal to an amount apportioned to the Central Government and shall transfer to the SGST account of the State an amount equal to an amount apportioned to that State, in the manner and time as may be prescribed.