There are four types of GST - CGST, IGST, SGST and UTGST. On 29 March 2017, the government announced a new indirect tax system under the Goods and Services Tax Act. This tax is intended to replace indirect taxes such as state VAT, customs duties, and entertainment tax. There are many types of GST and it can be challenging to understand this new tax system.
In simple terms, GST is a tax that applies to the value of goods and services at every stage of the supply chain. In this article, we have discussed the types of GST in India and the difference between them.
How Many Types of GST in India?
GST types in India are distinguishable based on the location where it is valid. GST is levied on the supply of goods used for domestic consumption. It is a value-added tax that is charged on the final price of a product or service. Goods and Services Tax came into effect on 1 July 2017. There are four different types of GST in India.
GST is an indirect tax law valid across India. The business keepers are obliged to forward their GST portion to the government. We have shared details of the types of GST and their full form in the table below.
Central Goods and Services Tax
State Goods and Services Tax
Integrated Goods and Services Tax
Union Territory Goods and Services Tax
Types of GST in India with Example
As mentioned, there are four types of GST in India, CGST, SGST, IGST and UTGST.
Each type has its tax rates that apply to the buyer. Before GST types, it is important to understand the motive behind the introduction of the unified tax system.
The main reason for introducing GST is to separate the State and Central Governments. The following sections will answer your questions about the different types of GST in India.
What is CGST?
CGST stands for the Central Goods and Services Tax. It replaces all previous taxes that the Central Government administered. This type of GS includes central surcharges & cess, central excise duty, and central surcharges. CGST is charged on goods that are moved within a state.
What is SGST?
SGST is the type of GST that the State Government collects. It is applied to transactions within the geographic boundaries of a particular state. SGST is levied only on intrastate supplies, and it does not include alcoholic liquor.
What is IGST?
Integrated Goods and Services Tax is IGST. It's generally applicable to interstate transactions, and it can be levied on products and services supplied between two states and exports and imports (IGST and customs). This GST type is collected by the Central Government.
What is UTGST?
UTGST refers to the Union Territory Goods and Services Tax, which applies to all goods and services traded in the UTs of India. This type of GST is only applicable to UTs that do not have a legislature. Delhi, Puducherry, and even newly formed UTs in Jammu & Kashmir are not liable to UTGST but another type of GST called SGST. This GST type is valid through
- Andaman and Nicobar Islands
- Daman Diu
- Nagar Haveli and Dadra.
Difference Between Types of GST
There is a difference between GST types, although all of them are levied as an all-encompassing indirect tax. We have demonstrated the difference between the types of GST in the table below:
Transactions within a single state
Transactions within a single state
Union Territory (UT) Government
Transactions within a Union Territory
Transactions between two states or a state and a Union Territory (UT)
Types of GST in India - Benefits
GST and its types have a lot of value in India. Multiple taxes were levied before the GST era by the State and Central governments. Regulating these taxes was a major hassle. Here are the other benefits of GST in India.
- GST is an easy-to-follow and convenient tax system.
- This reduces the chance of tax mixing-up between the State and Central Governments.
- It brought uniformity and consistency to the taxation system.
- Each type of GST has its tax rates that apply to the buyer.
FAQs on Types of GST
Q1. What is GST and what are its types?
GST or Goods and Service Tax is a tax that applies to the value of goods and services at every stage of the supply chain. There are four types of GST:
Q2. How many types of GST are there in India?
There are four types of GST in India, namely Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), UT Goods and Service Tax (UTGST) and Integrated Goods and Service Tax (IGST).
Q3. What is the difference between types of GST?
The difference between the types of GST is that each GST type determines the location in which it is valid. CGST and SGST are valid on intra-state transactions, whereas UTGST is valid on transactions within a single union territory. On the other hand, IGST is valid on transactions between two states or a state and a UT.
Q4. Are there 3 or 4 types of GST in India?
There are a total of 4 types of GST in India, namely, CGST, SGST, UTGST and IGST. The different GST types are valid through the following:
- CGST - On transactions within a single state
- SGST - On transactions within a single state
- IGST - On transactions between two states or a state and a UT
- UTGST - On transactions within a single UT
Q5. What are the types of GST returns?
There are thirteen types of GST returns, including GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08, and ITC-04. However, all of these GST returns are not valid for all taxpayers.
Q6. How many types of GST CGST is taxable on?
CGST is a type of GST that is valid on the supply of all goods and services within a single state in India. The Centre collects the Central Goods and Services Tax (CGST). This GST type is governed by the CGST Act.