GST - Goods and Services Tax

Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It was implemented in India on July 1, 2017, replacing multiple indirect taxes levied by central and state governments.

Taxes Subsumed by GST

Central Taxes: Central Excise Duty, Service Tax, Additional Duties of Excise, Additional Duties of Customs, Special Additional Duty of Customs, Cess and Surcharges

State Taxes: VAT/Sales Tax, Entertainment Tax, Octroi, Purchase Tax, Luxury Tax, Taxes on lottery, betting & gambling, State Cess and Surcharges

GST Structure

• CGST: Central Goods and Services Tax (levied by Centre)
• SGST/UTGST: State/UT Goods and Services Tax (levied by State)
• IGST: Integrated Goods and Services Tax (for inter-state supply)

GST Rates

• 0%: Essential goods (food grains, milk)
• 5%: Common-use items (tea, sugar, edible oil) and most items formerly taxed at 12% (merged into 5% under GST 2.0 from 22 Sep 2025)
• 18%: Standard rate for most goods and services (most former 28% items moved here)
• 40%: Sin and luxury goods (tobacco, pan masala, aerated drinks, high-end cars); replaced the 28% slab from 22 Sep 2025

GST Registration Threshold

• Normal category states: ₹40 lakh (goods) / ₹20 lakh (services) annual turnover
• Special category states: ₹20 lakh (goods) / ₹10 lakh (services) annual turnover
• Compulsory registration for inter-state suppliers, e-commerce operators, casual taxable persons