GST is a destination based tax i.e. the tax should be received by the state in which the goods or services are consumed and not by the state in which such goods are manufactured.

Here are some scenarios which will help your understanding about GST calculation and Payment.

Scenario 1: Within the state

A dealer in Karnataka supplies goods to the consumer in Karnataka worth Rs. 1,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%, in such case the dealer collects Rs. 180 and Rs. 90 will go to the central government and Rs. 90 will go to the Karnataka government.

Scenario 2: Interstate (from one state to another)

Now, if the dealer in Karnataka had supplied goods to a dealer in Tamil Nadu worth Rs. 1,000. Let’s say the GST rate is 18%, the dealer will charge as IGST and this amount of Rs. 180 will go to the central government.

Txn	Transaction	Type of Transition	Type of Tax
Karnataka	TamilNadu	Centre
SGST	SGST	CGST	IGST
1	When Mr B from Karnataka sells to Mr C from Tamil Nadu	(Interstate)	–	–	–	180

Scenario 3: Let’s make this a little more complex

Mr. A (Trader in Bangalore, Karnataka) sold goods worth Rs 1000 to Mr. B (Trader in Mysore, Karnataka) and then Mr. B sold goods worth Rs 1,200 Mr. C (Trader in Coimbatore, Tamil Nadu) and lastly Mr. C sold goods worth Rs 1,600 to Mr. D (Trader in Chennai, Tamil Nadu).

Mr A will collect a total of Rs 90 as SGST and Rs 90 and CGST and make the payment through the GST portal. His work ends here.

Txn	Transaction	Type of Transition	Type of Tax
Karnataka	TamilNadu	Centre
SGST	SGST	CGST	IGST
1	When Mr A from Bangalore sells to Mr B from Mysore	(Within the state)	90	–	90	–
Input Credit	0		0
Net Tax Payable by A	90		90

Mr B has paid a total of Rs 180 (SGST and CGDT) at the time of purchase of goods, which he can claim as input credit. While selling it to Mr C, he has collected IGST of Rs 216. He can set off the input credit to the IGST collected Rs 216 – Rs 180 = Rs 36. Mr B will make a payment of Rs 26 towards IGST to GST portal. His work ends here.

Txn	Transaction	Type of Transition	Type of Tax
Karnataka	TamilNadu	Centre
SGST	SGST	CGST	IGST
2	When Mr B from Karnataka sells to Mr C from Tamil Nadu	(Interstate)	–	–	–	216
Input Credit				180 (90+90)
Net Tax Payable by B				36 (216 – 180)

Mr C has paid a total of Rs 216 (IGST) at the time of purchase of goods, which he can claim as input credit. While selling it to Mr D, he has collected SGST of Rs 144 and CGDT of Rs 144.

He will first set off the input credit which is in the form of IGST against the CGST (Rs 216 – Rs 144 = Rs 72). He has a credit of Rs 72 left, which he will set off against the SGST (Rs 144 – Rs 72 = Rs 72).

Mr C will make a payment of Rs 72 towards SGST to GST portal. His work ends here.

Txn	Transaction	Type of Transition	Type of Tax
Karnataka	TamilNadu	Centre
SGST	SGST	CGST	IGST
3	When Mr C from Tamil Nadu sells to end user Mr D from Tamil Nadu	(Within the state)	–	144	144	–
Input Credit		Rs 72	144
Net Tax Payable by C		72

If you want to know how the state government and centre set off and adjust taxes within themselves. Let’s look at the adjustments made after we make the payment to the GST portal.

Transaction	Type of Tax
Karnataka	TamilNadu	Centre
SGST	SGST	CGST	IGST
Adjustment	-90	72		18
	As we know, GST is a consumption based tax, since the consumption is made in Tamil Nadu, Karnataka govt will not get any tax amount in this transaction.	Total GST amount paid by the consumer Mr D is Rs 144. This amount must go to Tamil Nadu. Trader Mr C has paid only Rs 72 after claiming input credit and the balance Rs 72 will be taken from Karnataka SGST. Tamil Nadu gets the entire Rs 144 as SGST.		After paying Tamil Nadu SGST, the balance Rs 18 will got o IGST
Net Receipts		144	90	54
		(Rs 72 from Mr C & Rs 72 from Karnataka SGST)	Centre received Rs 90 from Mr A as CGST.	The centre has received Rs 36 from Mr B and Rs 18 from Karnataka government as adjustment