What are the different types of GST in India?
India had a dual-GST system, comprising two types of Goods and Services Tax (GST). The GST regime was introduced in India on July 1, 2017, to replace multiple indirect taxes like excise duty, service tax, VAT, etc. The two main types of GST in India are:
- Central Goods and Services Tax (CGST): CGST is the component of GST that is levied by the Central Government of India on the intra-state supply of goods and services. In other words, it is imposed when the supply of goods and services takes place within the boundaries of a single state. The revenue collected from CGST is retained by the central government.
- State Goods and Services Tax (SGST): SGST is the counterpart of CGST levied by the State Governments. It is applicable to the intra-state supply of goods and services. The revenue collected from SGST is retained by the respective state governments.
These two components, CGST and SGST, are applicable to the same transaction but are administered separately by the Central and State Governments, respectively. The rates of CGST and SGST are often equal, but they may vary for specific goods and services as decided by the GST Council, a body consisting of representatives from the Central and State Governments.
In addition to CGST and SGST, there are two other GST types in India:
- Integrated Goods and Services Tax (IGST): IGST is applicable to the inter-state supply of goods and services. It is levied by the Central Government, but the revenue is apportioned between the Central and State Governments. When goods or services move from one state to another, IGST is charged, and the selling state transfers the revenue to the destination state.
- Union Territory Goods and Services Tax (UTGST): UTGST is similar to SGST but applies to the supply of goods and services within the Union Territories of India. Since Union Territories are directly governed by the Central Government, UTGST is collected and managed by the Central Government.
Please note that tax laws and rates may change over time, so I recommend checking the latest updates from official government sources or consulting a tax professional for the most current information on GST in India.