Q: What is GST in India?
A: GST (Goods and Services Tax) is a unified indirect tax system implemented in India on July 1, 2017, replacing multiple indirect taxes.
GST replaced multiple earlier indirect taxes like VAT, service tax, excise duty, etc.
It applies to the supply of goods and services and is divided into:–
CGST – Central GST (collected by the Central Government)
SGST/UTGST – State GST or Union Territory GST (collected by State/UT Governments)
IGST – Integrated GST (for interstate supplies, collected by the Centre and shared with states)
Here’s a simple diagram showing where GST fits in the Indian tax structure:
TAXES IN INDIA
│
├── Direct Taxes (paid directly to the govt by individuals/entities)
│ ├── Income Tax
│ ├── Corporate Tax
│ └── Capital Gains Tax
│
└── Indirect Taxes (collected by intermediaries from consumers)
└── GST (Goods and Services Tax)
├── CGST – Central GST (within state, goes to Centre)
├── SGST – State GST (within state, goes to State)
└── IGST – Integrated GST (between states, collected by Centre)
Did You Know?
France was the first country to introduce GST in 1954.