Different Types of GST in India

20^th Nov 2025...

GST in India has transformed the national tax system by consolidating separate indirect taxes into a single unified framework. This reform simplified compliance, strengthened transparency, and eliminated the cascading effect of multiple taxes. The different types of GST form the foundation of this system, as they define how taxes apply to various transactions. Each category plays a distinct role in ensuring smooth functioning of the taxation structure.

1. Central Goods and Services Tax (CGST)

CGST applies to transactions within a single state and is collected by the Central Government. For every intrastate supply, both CGST and SGST are levied simultaneously on the transaction value. Revenue from CGST flows to the centre.

Key Features of CGST:

Applies to all intrastate supplies of goods and services.
Rates are standardised across states, as decided by the GST Council.
Revenue collected is used to fund central government projects, including national infrastructure and public institutions.
Example: A vendor in Maharashtra selling goods worth ₹10,000 at an 18% GST rate must pay ₹900 as CGST to the Central Government.

2. State Goods and Services Tax (SGST)

SGST is imposed by State Governments on intrastate transactions, working alongside CGST to ensure revenue is shared between the Centre and States.

Key Features of SGST:

Applies to business activities conducted within a state’s boundaries.
Rates are uniform across all states, determined by the GST Council for identical goods and services.
Revenue from SGST supports state-level programmes such as education, healthcare, and infrastructure development.
Example: The same Maharashtra vendor selling goods worth ₹10,000 at an 18% GST rate will also pay ₹900 as SGST, which goes to the State Government.

3. Integrated Goods and Services Tax (IGST)

IGST applies to supplies of goods and services between different states or union territories. It ensures smooth interstate commerce and a transparent system for distributing tax revenue.

Key Features of IGST:

Levied on interstate supplies and imports into India.
Rates are standard across the country.
Revenue is collected by the Centre and then apportioned to the consuming states based on set criteria.
Example: Goods worth ₹10,000 sold from Maharashtra to Gujarat at an 18% GST rate will attract ₹1,800 as IGST.

4. Union Territory Goods and Services Tax (UTGST)

UTGST applies to transactions within Union Territories that do not have their own legislatures. It provides a revenue source for local administrations in these regions.

Key Features of UTGST:

Applicable in Union Territories such as Andaman and Nicobar Islands and Lakshadweep.
The rate of UTGST matches the SGST rate for comparable goods and services.
Revenue goes directly to the Union Territory government for funding local development projects.
Example: A sale worth ₹10,000 in a Union Territory at an 18% GST rate will attract ₹900 as UTGST.

Conclusion

A proper understanding of CGST, SGST, IGST, and UTGST is essential for businesses operating in India. Together, these categories form the backbone of the GST framework, ensuring efficient revenue collection by both central and state authorities. They strengthen India’s tax administration by unifying the system under a transparent and consistent structure.