India’s Goods and Services Tax (GST) follows a dual structure managed by both the Central and State Governments. As a destination-based tax, GST is applied where goods or services are consumed rather than where they originate.
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GST structure
India’s GST framework comprises:
- Central GST (CGST): applied by the Central Government transactions within a single state;
- State GST (SGST) / Union Territory GST (UTGST): levied by State or Union Territory Governments on intra-state transactions;
- Integrated GST (IGST): applied by the Central Government on inter-state transactions and imports, with tax revenue allocated to the consuming state.
For most travel and expense-related transactions, GST is applied intra-state, meaning CGST and SGST apply, each making up half of the total GST rate. However, if an expense is incurred in a different state from the supplier’s registration, IGST applies.
GST rates
GST in India is structured into multiple tax brackets:
| Rate | Type | Examples of goods and services |
|---|---|---|
| 28% | Luxury | High-end cars, air conditioning, cigarettes |
| 18% | Standard | Most taxable goods and services |
| 12% | Reduced | Processed foods, certain hotel accommodation |
| 5% | Reduced | Essential items like tea, coffee, private transport |
| 0% | Zero | Exports, basic food items, essential services |
Find more information about GST in India on the Department of Revenue website.