Types Of GSTs In India

Goods and Services Tax or GST is an indirect tax that is imposed on the supply of goods and services in India. Generally, it is described as comprehensive, multistage, and destination-based taxation.

It has been successful in replacing many indirect tax laws that previously existed. However, one must note that there are different types of GSTs in India, and businesses must become familiar with each of them to streamline the process of making payments.

What Is GST In India?

India has adopted and implemented the dual GST model from 1 July 2017. Under this tax regime, both the Centre and the States impose taxes on goods and services. It is levied at each stage of point of sale. Implementing this system has resulted in a free-flow of credit and implemented ‘one country, one tax-rate’ structure in India. 

With the implementation of the GST regime, these taxes were successfully replaced – VAT, Octroi, entertainment tax, purchase tax, lottery tax, luxury tax, etc. 

Importance Of GST In India:

These points below highlight the importance of GST in India –

  • It helps to lower the tax burden on goods.
  • Eliminates double taxation.
  • Ensures a uniform tax structure for a faster and cheaper movement of goods and services.

Other noteworthy benefits of GST in India include -

  • It removes the cascading tax effect successfully.
  • There is relatively less compliance under GST.
  • Increases efficiency in logistics.
  • Helps to regulate unorganised sectors.
  • Facilitates a simple online process for GST compliance.

Types Of GSTs In India:

In a broader sense, there are four types of GST in India, and they are discussed below –

  • State Goods And Services Tax Or SGST

It is the GST that is imposed by concerned State governments on the supply of intra-state trade and services, offered by a registered person or business. It is also levied on the trade that takes place within the concerned state. In this type of GST, the revenue is earned and collected by the state government.

  • Union Territory Goods And Services Tax Or UGST

When it comes to the union territories, the state government is not responsible for collecting the GST on goods and services, supplied by a registered person within that UT. Instead, it is collected by the central administration, and is known as the Union GST or UGST in short.

  • Central Goods And Services Tax Or CGST

CGST is the tax collected by the central government on intra-state transactions of goods and services. You must note that CGST is collected in addition to the SCGT or the UGST. Generally, the revenue collected is distributed between the central government and the state government. 

  • Integrated Goods And Services Tax Or IGST

The Central government collects IGST or Integrated Goods and Services Tax. It is levied on inter-state sales and import. Generally, it is equivalent to the summation of CGST and SGST or UTGST.

This table below represents all information pertaining to the types of GST tax –

Types Of GST In India



Applicable Transactions


Central Government

Central Government

Intrastate transactions


Union Territory Government

Union Territory Government

Transactions made within a single UT


State government 

State Government

Intrastate transactions


Both Central and State Government

Central Government

Interstate transactions

Input Tax Credit – In Brief:

Taxpayers can opt for the input credit mechanism under the purview of the GST Act. Typically, manufacturers, suppliers, e-commerce operators, aggregators, or agents registered under the GST regime are eligible to claim input credit on the taxes, paid by them on their purchases. 

However, to avail the same, a taxpayer’s suppliers must also be GST compliant. Further, the registered suppliers must have deposited the tax amount due to be considered eligible to claim it.

GST Rates Of Common Goods:





Household necessities – 

tea, coffee, sugar, edible oil, and spices.

Life-saving drugs, coal, sweetmeats, etc.




Hair oil, toothpaste, soap, industrial intermediaries, and capital goods.




Computers and processed food




Premium cars, luxury items, consumer durables including AC, cigarettes, aerated drinks, refrigerator, high-end motorcycles, etc.




Therefore, there are different types of GSTs imposed on most goods and services available in India. Like discussed, various products and services belong to different GST slabs, as determined by the government. Further, the tax is paid by the end-user, and is remitted by the businesses to the government. 

You must also note that businesses can file for GST online and streamline the entire process without going through a lot of hassle. As a result, companies can save a lot of their productive time and energy. Similarly, at KredX businesses can access funds easily online within 24 hours and 72 hours* by availing our invoice discounting services. Since this entire process is completed online, companies can initiate the process of availing funds without any hassle.