Under the GST umbrella, three taxes for states/UTs and Centre

The CGST and SGST will be levied simultaneously on every transaction of supply of goods and services except exempted goods and services, goods which are outside the purview of GST, and transactions which are below the prescribed thresholds.

GST, GST implementation, Goods and services tax, tax, GST rollout, SGST,

Under the GST regime, tax liability arises when the taxable person crosses the turnover threshold of Rs 20 lakh (Rs 10 lakh for Northeastern and “Special Category” states). (Representational photo)

Under the GST regime, the Centre and states/Union Territories shall simultaneously levy indirect taxes on a common tax base. Within the umbrella of GST, the GST levied by the Centre on intra-state supply of goods and/or services will be called Central GST (CGST), and that levied by states/UTs, State GST (SGST/UTGST). Integrated GST (IGST) will be levied and administered by the Centre on the inter-state supply of goods and services.

This was decided keeping in mind the federal structure of the country, where both the Centre and the states have the powers to levy and collect taxes through appropriate legislation.

The CGST and SGST will be levied simultaneously on every transaction of supply of goods and services except exempted goods and services, goods which are outside the purview of GST, and transactions which are below the prescribed thresholds.

Both will be levied on the same price or value — unlike state VAT, which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and recipient within the country is immaterial for the purpose of CGST, SGST will be chargeable only when the supplier and recipient are both located within a state.

IGST shall be levied and collected by the Government of India, and such tax shall be apportioned between the Centre and the states.

Under the GST regime, tax liability arises when the taxable person crosses the turnover threshold of Rs 20 lakh (Rs 10 lakh for Northeastern and “Special Category” states). Cross-utilisation of input credit of one component of tax against the other is allowed except utilisation of credit of CGST for SGST and vice versa. For example, input tax credit of CGST is allowed only for the payment of CGST and IGST, while input tax credit of SGST is allowed only for the payment of SGST and IGST.

(Series concluded)

Aanchal Magazine

Aanchal Magazine is a Senior Assistant Editor with The Indian Express, serving as a leading voice on the macroeconomy and fiscal policy. With over 13 years of newsroom experience, she is recognized for her ability to decode complex economic data and government policy for a wider audience. Expertise & Focus Areas: Magazine’s reporting is rooted in "fiscal arithmetic" and economic science. Her work provides critical insights into the financial health of the nation, focusing on: Macroeconomic Policy: Detailed tracking of GDP growth, inflation trends, and central bank policy actions. Fiscal Metrics: Analysis of taxation, revenue collection, and government spending. Labour & Society: Reporting on labour trends and the intersection of economic policy with employment. Her expertise lies in interpreting high-frequency economic indicators to explain the broader trajectory of the Indian economy. Personal Interests: Beyond the world of finance and statistics, Aanchal maintains a deep personal interest in the history of her homeland, Kashmir. In her spare time, she reads extensively about the region's culture and traditions and works to map the complex journeys of displacement associated with it. Find all stories by Aanchal Magazine here ... Read More