GST in India
CGST, SGST and IGST
Within a state, GST has a central and a state part; between states, a single integrated tax is charged and shared.
Because India is a federation, both Centre and states get revenue.
Inside a state
A sale within one state carries CGST for the Centre and SGST for that state, usually in equal halves.
Between states
A sale between states carries IGST, which is then split between the Centre and the destination state.
Destination principle
Tax revenue goes to the state where goods are consumed, not where produced.
Union territories
UTGST applies in union territories without legislatures.
A cross-border sale
A shirt made in Tamil Nadu and sold in Karnataka carries IGST, with the revenue reaching Karnataka.
Assuming producing states get the revenue
Consuming states gain.
Key takeaways
- CGST and SGST apply within a state.
- IGST applies between states.
- Revenue goes to the consuming state.
- UTGST covers some union territories.
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