Structure of GST

2.1 Dual GST Model

India adopted the Canadian dual GST model - both Centre and State simultaneously levy tax on the same supply, each having their own legislation:

Tax Component	Levied By	Applicable On	Revenue Goes To
CGST (Central GST)	Central Government	Intra-state supply of goods/services	Central Govt
SGST (State GST)	State Government	Intra-state supply of goods/services	Respective State
IGST (Integrated GST)	Central Government	Inter-state supply + imports	Centre then distributes to consuming state
UTGST (Union Territory GST)	Central Government	Intra-UT supply (for UTs without legislature: Chandigarh, D&NH, DD)	Central Govt

Example: A trader in Jaipur (Rajasthan) sells goods worth ₹10,000 to a buyer in Jaipur:

• CGST @ 9% = ₹900 -> goes to Centre
• SGST @ 9% = ₹900 -> goes to Rajasthan govt
• Total GST = ₹1,800 (18% combined)

Example: Same trader sells to a buyer in Mumbai (Maharashtra):

• IGST @ 18% = ₹1,800 -> Centre collects; Maharashtra receives it as consuming state

2.2 GST Rate Structure

Rate Slab	Typical Coverage	Examples
0% (Exempt)	Essential and exempt supplies	Fresh vegetables, food grains, milk, education, healthcare services
5% (Essential)	Basic consumption goods and low-rate services	Edible oils, sugar, tea, coffee, coal, economy class air/train tickets
12% (Standard)	Moderately taxed goods	Processed food, butter, cheese, computers, mobile phones, medicines
18% (Standard Plus)	Most services and standard industrial or consumer goods	Most services, FMCG, chemicals, paints, capital goods, telecom services
28% (Luxury)	Luxury and demerit goods	Luxury cars, tobacco, cement, aerated drinks, air conditioners, dishwashers

Cess: Additional levy on sin goods (tobacco products, pan masala, luxury cars, aerated drinks) beyond 28% rate. Cess revenue goes to the GST Compensation Fund (to compensate states for revenue loss during the 5-year transition period - which ended June 2022).

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