Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax levied on every value addition in the supply chain. Implemented on July 1, 2017, it replaced multiple central and state taxes.
Types of GST
| Type | Applicability | Collection |
|---|---|---|
| CGST | Intra-state supply | Central Government |
| SGST | Intra-state supply | State Government |
| IGST | Inter-state supply | Central Government |
| UTGST | Union Territory supply | UT Administration |
GST Rate Structure
- 0%: Essential items (fresh food, healthcare services)
- 5%: Mass consumption items (packaged food, transport)
- 12%: Standard goods (processed food, computers)
- 18%: Standard rate (most services, industrial goods)
- 28%: Luxury and sin goods (cars, tobacco, aerated drinks)
Registration Threshold
| Category | Threshold |
|---|---|
| Goods (Regular states) | Rs. 40 lakhs |
| Goods (Special category states) | Rs. 20 lakhs |
| Services (Regular states) | Rs. 20 lakhs |
| Services (Special category states) | Rs. 10 lakhs |
Taxes Subsumed Under GST
- Central: Central Excise, Service Tax, CVD, SAD, Central Sales Tax
- State: VAT, Entertainment Tax, Luxury Tax, Entry Tax, Purchase Tax
Input Tax Credit (ITC)
GST allows seamless credit of taxes paid on inputs against output tax liability, eliminating the cascading effect of taxes.
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