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Types of GST - CGST, SGST, IGST and UGST Explained

  • Highlights

  • CGST, SGST, IGST and UGST are the 4 types of GST in India

  • CGST and SGST are levied on intra-state transactions

  • CGST is collected by the centre and SGST by the state

  • IGST is charged on inter-state goods/services transactions

GST subsumes erstwhile state taxes like VAT, octroi, luxury tax and purchase tax, as well as central taxes like customs duty, central excise duty and service tax. Now, under the one-nation, one-tax regime, a simple 4-fold breakup has been formulated, which allows both the centre and states to levy taxes. GST in India is classified into 4 types to distinguish between union territories, inter- and intra-state supplies and mitigates indirect taxes.

The 4 types of GST in India are:

  • SGST (State Goods and Services Tax)
  • CGST (Central Goods and Services Tax)
  • IGST (Integrated Goods and Services Tax)
  • UGST (Union Territory Goods and Services Tax)
To learn more, read about the different types of GST.

What is SGST (State Goods and Service Tax)

SGST is levied by the state government on intra-state goods and service transactions. The revenue collected through State Goods and Service Tax is earned by the state government where the transaction is made. SGST subsumes earlier taxes such as VAT, entertainment tax, luxury tax, octroi, tax on lottery and purchase tax.

In case of a union territory like Andaman and Nicobar Islands or Chandigarh, SGST is replaced by UGST or Union Territory Goods and Service Tax.

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What is CGST (Central Goods and Service Tax)?

CGST is levied by the central government on intra-state goods and service transactions. The central government collects the revenue generated through Central Goods and Service Tax. It is levied along with SGST or UGST and revenues are shared between the state and the centre.

For example, if you are a Bengaluru-based dealer and are selling to another dealer in Bengaluru, since it’s an intra-state sale, both CGST and SGST will be applicable on this transaction. If your transaction of goods is worth Rs.30,000 and it attracts 18% GST, then 9%, which is Rs.2,700 of the tax amount, is collected as SGST by the state government and a matching amount is collected as CGST by the centre.

What is IGST (Integrated Goods and Service Tax)?

Integrated Goods and Service Tax is the tax levied on inter-state goods and service transactions. It is applicable on imports and exports as well. Under IGST, the taxes charged are shared by both the centre and state. The SGST part of the tax goes to the state wherein the goods and services are consumed.

IGST also helps you claim Input Tax Credit. It’s a facility that checks cascading tax and helps business owners like you save at every stage of the supply chain.

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