GST Flow System
Decode India's Indirect Tax regime. Understand how CGST, SGST, and IGST work together in a unified market, and how Input Tax Credit (ITC) prevents cascading effects.
The GST Ecosystem
Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It replaced almost all indirect taxes in India, creating a 'One Nation, One Tax' system.
CGST
Central GST
Collected by the Central Govt on intra-state sales.
SGST
State GST
Collected by State Govts on intra-state sales.
IGST
Integrated GST
Collected by Central Govt on inter-state sales.
Inter-State vs Intra-State Flow
Intra-State (Within Maharashtra)
Inter-State (Delhi to Mumbai)
The Magic of Input Tax Credit (ITC)
Input Tax Credit is the backbone of GST. It allows a business to reduce the tax it has already paid on inputs from the tax it has to pay on output. This removes the Cascading Effect (Tax on Tax).
Without GST
With GST (ITC)
UPSC Key Concept: GST Council
Constitutional Body (Article 279A)
Headed by the Union Finance Minister, it includes representatives from all states. It is the apex body that decides tax rates, exemptions, and thresholds. Decisions are taken by a 3/4th majority, ensuring cooperative federalism.