India’s Goods and Services Tax (GST) is a single, unified indirect tax, but it has different components depending on who collects the tax and where the sale takes place. These components are:
- CGST – Central Goods and Services Tax
- SGST – State Goods and Services Tax
- IGST – Integrated Goods and Services Tax
- UTGST – Union Territory Goods and Services Tax
Let’s understand each one in simple language.
🔹 What Are the Types of GST?
There are 4 main types of GST in India:
| Type | Collected By | Applied On |
|---|---|---|
| CGST | Central Government | Intra-state sales (within the same state) |
| SGST | State Government | Intra-state sales (within the same state) |
| IGST | Central Government | Inter-state sales (between two different states) |
| UTGST | Union Territory Govt | Sales within a Union Territory |
Let’s look at each of these in more detail:
🏛️ 1. CGST – Central Goods and Services Tax
- CGST is the central share of tax collected when a sale happens within the same state.
- It is levied by the Central Government.
- The revenue goes to the central treasury.
📌 Example: If a trader in Patna sells goods to a customer in Gaya (both in Bihar), CGST will apply.
If GST rate is 18%,
- 9% goes as CGST
- 9% goes as SGST
🏙️ 2. SGST – State Goods and Services Tax
- SGST is the state share of tax for sales within the same state.
- It is collected by the State Government.
- It replaces state taxes like VAT, entry tax, and entertainment tax.
📌 In the above example (Patna to Gaya), 9% SGST goes to Bihar Government.
🛣️ 3. IGST – Integrated Goods and Services Tax
- IGST is applied on inter-state sales, i.e., when goods/services move from one state to another.
- Collected by the Central Government.
- Later, the Centre distributes the appropriate share to the buyer’s state.
📌 Example: A seller in Delhi sells goods to a buyer in Bihar. The full 18% IGST is collected by the Centre.
🌐 4. UTGST – Union Territory Goods and Services Tax
- UTGST is similar to SGST but for Union Territories without legislatures, like:
- Andaman & Nicobar Islands
- Chandigarh
- Lakshadweep
- Daman and Diu
- Dadra and Nagar Haveli
- UTGST is collected along with CGST in such places.
📌 Example: A sale in Chandigarh will attract 9% CGST + 9% UTGST.
📊 Quick Summary Table
| Type | Who Levies It? | Where Applicable? | Example |
|---|---|---|---|
| CGST | Central Government | Within a state (intra-state) | Patna to Gaya |
| SGST | State Government | Within a state (intra-state) | Patna to Gaya |
| IGST | Central Government | Between two states (inter-state) | Delhi to Bihar |
| UTGST | Union Territory Govt | Within Union Territories | Chandigarh |
📥 Why Are These Types Necessary?
- To ensure fair tax sharing between Centre and States.
- To avoid double taxation and simplify tax credit flow.
- To allow better tracking and compliance across states and union territories.
✅ Final Words
Although GST is “One Nation, One Tax”, it is structured into multiple components to ensure smooth coordination between Central and State governments.
Understanding the types of GST is important for:
- Correct invoicing
- Claiming Input Tax Credit (ITC)
- Filing accurate GST returns
📞 Need Help with GST?
If you are facing any difficulties related to filing returns, planning your business, GST registration, billing setup, or other tax-related services,
please contact us:
🧾 Taxeasy Solution
📍 Supaul Bazar, Biraul,
Darbhanga, Bihar – 847203
📞 Mob: 6289187606
📧 Email: jhajp96@gmail.com
