GST & Tax Structure
Economy Advanced · GST और कर संरचना
📋Quick Overview
GST (Goods and Services Tax) is India's biggest indirect tax reform, implemented on July 1, 2017 under the slogan 'One Nation, One Tax.' It replaced 17 central taxes and 13 state taxes with a unified tax framework. The 101st Constitutional Amendment Act (2016) enabled GST by adding Article 246A, 269A, and 279A to the Constitution. The GST Council was established under Article 279A.
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GST Council is chaired by the Union Finance Minister with 1/3 weightage to Centre and 2/3 to States. Decisions require 3/4 majority. States were compensated for 5 years (until June 2022) at 14% guaranteed annual revenue growth.
📖GST Rate Structure
| GST Rate | Category | Examples |
|---|---|---|
| 0% | Exempted / Essential items | Fresh vegetables, milk, eggs, cereals, education, healthcare |
| 5% | Mass consumption items | Packaged food, tea, coffee, fertilizers, railways (economy class) |
| 12% | Standard goods | Processed food, computers, medicines, smartphones (some) |
| 18% | Standard services & goods | Most services, capital goods, industrial intermediate goods, AC restaurants |
| 28% | Luxury + Demerit goods | AC vehicles, luxury hotels, premium appliances |
| 28% + Cess | Sin/demerit goods + luxury | Tobacco, cigarettes, aerated drinks, large SUVs (cess on top of 28%) |
📖Types of GST & Constitutional Provisions
| GST Type | Full Form | Applicability |
|---|---|---|
| CGST | Central GST | On intra-state supply of goods/services; collected by Centre |
| SGST | State GST | On intra-state supply; collected by State; same rate as CGST |
| IGST | Integrated GST | On inter-state supply + imports; collected by Centre; distributed between Centre+State |
| UTGST | Union Territory GST | Applies in UTs without legislature (Delhi, Puducherry have SGST) |
- •Article 246A: Both Parliament AND State Legislature can make laws on GST (concurrent jurisdiction); this was a first
- •Article 269A: IGST collected by Centre and apportioned between Centre and States
- •Article 279A: Establishes GST Council; all states + Centre together decide GST rates
- •GSTN (GST Network): IT infrastructure backbone of GST; private company; processes returns, refunds, invoices
- •HSN Code: Harmonised System of Nomenclature — 8-digit code for goods classification under GST; used for invoices + customs