Goods and Services Tax (GST)

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

TypeApplicabilityCollection CGSTIntra-state supplyCentral Government SGSTIntra-state supplyState Government IGSTInter-state supplyCentral Government UTGSTUnion Territory supplyUT 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

CategoryThreshold 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.