Costing and Taxation · Ch 7 — Goods and Service Tax (GST)
Structure and Types of GST
Structure and Types of GST
The Dual GST structure
India adopted a Dual GST model, reflecting the country's federal structure — both the Centre and the States/Union Territories simultaneously levy GST on the same taxable supply, rather than one level of government levying it alone.
| Type of supply | GST levied |
|---|---|
| Supply of goods/services WITHIN one State (intra-State supply) | Central GST (CGST), by the Centre + State GST (SGST), by that State, levied simultaneously on the same transaction value, generally at equal rates |
| Supply of goods/services WITHIN one Union Territory (without its own legislature) | CGST + Union Territory GST (UTGST), in place of SGST |
| Supply of goods/services BETWEEN two States/Union Territories (inter-State supply), or on IMPORT into India | Integrated GST (IGST), levied by the Centre, broadly equal to CGST + SGST combined, and later apportioned between the Centre and the destination State |
A worked example of the logic (illustrative, not a computation exercise)
If a trader in West Bengal sells goods to a buyer also in West Bengal, the supply is intra-State, and CGST + SGST both apply, split roughly equally between the Centre and the West Bengal Government. If the same trader instead sells to a buyer in another State, the supply is inter-State, and IGST alone applies — collected by the Centre and, since the tax is destination-based, ultimately apportioned to the DESTINATION State (where the buyer/consumer is), not the origin State.
Types of GST, summarised
| Type | Levied by | Applies to |
|---|---|---|
| CGST | Central Government | Intra-State supply (component 1 of 2) |
| SGST | State Government | Intra-State supply (component 2 of 2) |
India's GST model, under which the Centre and the States/UTs simultaneously levy GST on the same taxable supply — CGST+SGST (or CGST+UTGST) for an intra-State/UT supply, IGST for …
CGST: Central GST on intra-State supply. SGST: State GST on intra-State supply. UTGST: Union Territory GST, in place of SGST for a Union Territory without its own legislature. IGST: Integrated GST on inter-State supply and imports, levied by the Cen …