What is GST? How does GST Works?


Finally, GST is one indirect tax for our India, which will make India one unified common market.

GST is only a single tax on the supply of goods and services, ideal from the manufacturer to the buyer. Credits of input taxes paid at each stage will be accessible in the consequent phase of significant worth expansion, which makes GST basically a tax just on value addition at each stage. The last customer will accordingly bear just the GST charged by the last merchant in the store network, with set-off advantages at all the past stages.

How do GST works?

When Goods and Services Tax is implemented, there will be 3 kinds of applicable Goods and Services Taxes:

  • CGST: where the revenue will be collected by the central government
  • SGST: where the revenue will be collected by the state governments for intra-state sales
  • IGST: where the revenue will be collected by the central government for inter-state sales
Transaction TypeNew RagimeOld RagimeComments
Sale within StateCGST + SGSTVAT + Central Excise/Service taxRevenue will now be shared between the Centre and the State
Sale to another StateIGSTCentral Sales Tax + Excise/Service TaxThere will only be one type of tax (central) now in the case of inter-state sales.

Related Article: Taxman & Startups: How will GST impact your Startup?


The thought of having one consolidated indirect tax to subsume various as of now existing roundabout charges is to profit the Indian economy in various ways:

  • It will enable the nation’s organizations to pick up a level playing field.
  • It will put us keeping pace with outside countries who have a more organized tax system.
  • It will likewise convert into picks up for the end purchaser who not needs to pay falling expenses anymore.
  • There will now be a single tax on goods and services.

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