What is GST? | One Nation, One Tax
The Goods and Services Tax (GST) is a comprehensive indirect tax on manufacture, sale, and consumption of goods and services. Learn the 'Dual GST' model of India.
The GST Structure
India follows a Dual GST model where both the Central and State governments simultaneously levy GST on a common base. This was implemented on July 1, 2017, through the 101st Constitutional Amendment Act.
CGST
Central GST
Levied by the Center on intra-state supply of goods and services.
SGST
State GST
Levied by the State on intra-state supply of goods and services.
IGST
Integrated GST
Levied by the Center on all inter-state supplies of goods and services.
The GST Council
The GST Council is a constitutional body (Article 279A) for making recommendations to the Union and State Government on issues related to GST.
Chairperson: Union Finance Minister
Decisions are taken by a 3/4th majority. Center has 1/3rd voting power, and all States together have 2/3rd voting power.
Input Tax Credit (ITC)
The most significant feature of GST is Input Tax Credit, which eliminates the cascading effect of taxes (tax on tax).
How it works
Challenges & Benefits
Benefits
- Wider tax base
- Ease of doing business
- Automated compliance
Challenges
- High compliance cost for SMEs
- Technology dependency
- Revenue loss for some states
View GST Flow Visualizer
See how tax flows from producer to consumer.