Types of GST: CGST, SGST, UTGST and IGST!

Did you ever notice that, GST applied to products in local stores differs from the ones bought online? This is due to the GST in India having a multi-tier tax ecosystem that balances the revenue sharing for both the state and central government.

To ensure India’s tax ecosystem runs smoothly, types of GST like CGST, SGST, UTGST, and IGST play a crucial role.

Let’s deep dive into the types of GST and check how they differ from each other.

What are the Types of GST? 

The Indian tax ecosystem is based on two types of GST transactions that ensure equal distribution of revenue from GST collection between the central and state governments. The two transactions are: 

1. Inter-state Transactions: 

Trade or transactions in which two different states are involved are termed inter-state transactions. 

2. Intra-state Transactions: 

The transactions between two traders in the same state are intra-state transactions. 

GST is divided into 4 types based on the above transactions. Let’s scroll below to understand What are the types of GST. 

1. State Goods and Services Tax (SGST) 

• It’s a state tax, where SGST is applied by the Indian state governments on intra-state trade. 
• GST collection from SGST is shared as revenue with the state government. 
• SGST is identified as a part of dual GST structure which functions along with CGST. 
• SGST rates are uniform for states but can vary depending on products/service. 

2. Central Goods and Services Tax (CGST) 

• It’s a central tax, where CGST is applied on intra-state trade by the Indian government. 
• The collected revenue under CGST is directly transferred to the central government of India. 
• It operates along with SGST under the dual GST structure.
• CGST rates stay the same across the country. 

3. Integrated Goods or Services Tax (IGST) 

• The Inter-state tax, IGST, is applied on trade between two states, including imports and exports.
• The revenue collected under IGST is distributed between the central and state governments.
• The consumer state government gets the share of the GST collection here.
• It implements a unified tax structure on interstate trade, ensuring seamless tax processes. 

4. Union Territory Goods and Services Tax (UTGST)

• Union territory Tax, UTGST, is imposed on intra-union trade within the borders of a Union Territory.
• The revenue collected goes to the UT government.
• UTGST operates along with CGST on trade within the Union Territory as a part of the dual GST regime. 

Types of GST in India: Explained with Example 

1. Intra-state or UT Transactions: 

For example, let’s take a furniture shop owner in Surat, Gujarat, who supplies a dining table to a customer in Ahmedabad, Gujarat. So, it’s an intra-state transaction where the trade takes place in the same state. Here, CGST and SGST apply to the trade.

Price of Dining Table on Invoice: ₹10,000 

Goods and Services Tax Rate = 18% 

How is GST computed = CGST + SGST 

This means:

CGST = 50% of 18 = 9% 

SGST= 50% of 18= 9%

CGST = 10000 * (9/100) =  ₹900

SGST = 10000 * (9/100) =  ₹900

2. Inter-state Supply: 

Now, again consider the same furniture shops that sell a wardrobe to a customer in Maharashtra. IGST applies here. 

Cost of the Wardrobe: ₹50,000 

Integrated GST rate = 18% 

Integrated GST = 50000 (18/100) = ₹9000 

This tax is collected by the central government of India and later shared with the destination state (Maharashtra) government.

So, central Government share = 9000/2 = ₹4500

State Government Share = 9000/2 = ₹4500 

Types of GST: CGST Vs SGST Vs IGST Vs UTGST 

Category	CGST	SGST	IGST	UTGST
Full Form	Central Goods and Services Tax	State Goods and Services Tax	Integrated Goods and services Tax	Union Territory Goods and Services Tax
Administration Authority	Central Government	State Government	Central Government	Union Territory Government
Applicability	Intra-state Supply i.e. Trade within the same state	Intra-state supply  i.e. Trade within the same state	Inter-state supply i.e. trade between two different states	Intra-state supply i.e. Trade within the same state
ITC Availability	ITC can be claimed against CGST and IGST dues	ITC can be claimed against SGST and IGST dues	ITC can be claimed against IGST, CGST, SGST/UTGST dues	ITC can be claimed against UTGST and IGST dues
Revenue Shared	Central Government takes all the revenue	State Government takes all the revenue	Central government and consumer state shares the revenue	The revenue is taken by Union Territory Government

Conclusion 

There are four types of GST in India: CGST, SGST, IGST, and UTGST. It becomes crucial to understand them to ensure a transparent and streamlined tax ecosystem.

These four types of GST ensure fair revenue sharing between the central and state/ UT governments.

So, every time you buy from a local store or go for an international brand, check your invoice thoroughly for GST rates applied. Because they aren’t just numbers; they denote India’s unified tax ecosystem for streamlined trade across boundaries.

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FAQs on Types of GST

1. How many types of GST in India?

There are four types of GST in India. 

2. Which are the 4 pillars of GST? 

CGST, SGST, IGST, and UTGST are the 4 pillars of GST. 

3. Which taxes are applied on intra-state supply? 

CGST and SGST are applied on intra-state supply. 

4. Under types of GST, what is the full form of CGST? 

Central Goods and services tax is the full form of GST. 

5. Which type of GST applies to online ecommerce transactions? 

Online ecommerce transactions in one state apply CGST and SGST, while between two different states apply IGST.

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