🎉Now on Google Play! Get it on Google Play
Get Expert Advice

Last updated on: July 29, 2025

Quick Summary

There are mainly four types of GST (Goods and Services Tax) in India: CGST (Central GST), SGST (State GST), IGST (Integrated GST), and UTGST (Union Territory GST). CGST and SGST are applied together on intra-state transactions, where the tax is shared equally between the central and state governments. IGST is levied on inter-state transactions and imports, with the revenue split between the center and destination state. UTGST is similar to SGST but is applicable in Union Territories without legislatures. These types collectively ensure a uniform tax structure across India, simplify compliance for businesses, and eliminate cascading effects of previous indirect taxes by streamlining the collection process under a single GST regime.

Prem Anand Author
Prem Anand
Prem Anand
VIP CONTRIBUTOR
Prem Anand
10+ years Experienced content writer specializing in Banking, Financial Services, and Insurance sectors. Proven track record of producing compelling, industry-specific content. Expertise in crafting informative articles, blog posts, and marketing materials. Strong grasp of industry terminology and regulations.
LinkedIn Logo Read Bio
Prem Anand Reviewed by
GuruMoorthy A
Prem Anand
Founder and CEO
Gurumoorthy Anthony Das
With over 20 years of experience in the BFSI sector, our Founder & MD brings deep expertise in financial services, backed by strong experience. As the visionary behind Fincover, a rapidly growing online financial marketplace, he is committed to revolutionizing the way individuals access and manage their financial needs.
LinkedIn Logo Read Bio
9 min read
Views: Loading...

Types Of GST: Your Complete Guide for 2025

Goods and Services Tax (GST) is now the backbone of India’s indirect taxation system. Since its launch, GST has transformed how businesses operate and how taxes are levied, collected, and credited. Whether you run a small online shop or a multinational company, understanding the different types of GST is necessary for compliance, correct billing, and claiming input tax credit.

In 2025, the importance of knowing the GST framework is even higher as the government brings new amendments, and digital platforms make it easier to comply. This guide covers all GST types, their differences, practical examples, features, pros and cons, and the latest updates relevant for businesses and consumers this year.

What are the Types of GST in India?

India’s GST structure has four main types:

  1. CGST – Central Goods and Services Tax
  2. SGST – State Goods and Services Tax
  3. IGST – Integrated Goods and Services Tax
  4. UTGST – Union Territory Goods and Services Tax

Each GST type serves a specific role in India’s taxation, depending on the nature of the transaction. Let’s see how each works in everyday business situations.

Did You Know? The GST Council in 2025 enabled a new real-time online GST dashboard for better tracking and compliance across all GST types.


How Does CGST Work in a Transaction?

What is Central Goods and Services Tax (CGST)?

CGST is collected by the Central Government on intra-state sales—that means when a transaction happens within the same state. For example, when a mobile store in Mumbai sells a phone to a customer in Pune, both in Maharashtra, CGST is applied.

  • The current CGST rate is always half of the total GST rate for the item.
  • Businesses can claim an input tax credit for the CGST paid.

Key Features or Highlights of CGST

  • Applicable: Only for sales within the same state
  • Collected by: Central Government of India
  • Credits: Input tax credit available
  • Online Filing: Monthly returns must be filed on government GST portal

Pros and Cons of CGST

Pros

  • Simplifies central tax collection
  • Reduces tax-on-tax issues seen in the earlier system

Cons

  • Dual reporting required along with SGST
  • Initial registration may seem complex for micro and small businesses

People Also Ask

How is CGST calculated in 2025?
CGST is half of the overall GST rate, depending on the product or service, calculated on the invoice value.


What is SGST and When is it Applied?

What is State Goods and Services Tax (SGST)?

SGST is the tax collected by the state government on intra-state transactions, just like CGST. It is always equal in percentage to CGST for any specific good or service. When you buy groceries in your local city market, SGST is charged along with CGST.

  • States use SGST revenue for development and welfare activities.
  • Businesses are required to mention SGST separately on invoices.

Key Features or Highlights of SGST

  • For: Sales and purchases within the same state
  • Collected by: Respective State Government
  • Compliance: Requires regular monthly and annual reporting

Pros and Cons of SGST

Pros

  • State governments get direct tax revenue
  • Supports local business development

Cons

  • Ongoing compliance burden
  • Tax rates may occasionally be revised by the state

People Also Ask

Can SGST credit be used to pay CGST?
No, SGST input credit can be used only against SGST liability, not against CGST or IGST.


Expert Insight: GST e-invoicing systems, made mandatory for businesses with turnover above 5 crore in 2025, auto-calculate and split the CGST and SGST for you.


When is IGST Charged on Goods and Services?

What is Integrated Goods and Services Tax (IGST)?

IGST applies when goods or services move between different states or for eligible exports and imports. If your business in Delhi sells a laptop to a customer in Bangalore, IGST is charged because it’s an inter-state supply.

  • The IGST rate is the sum of both CGST and SGST.
  • The central government collects IGST and later shares it between the states based on destination.

Key Features or Highlights of IGST

  • For: Inter-state trade, imports, and exports
  • Collected by: Central Government
  • Settlement: Revenue shared with states
  • Invoices: Only IGST is shown, not broken into CGST and SGST parts

Pros and Cons of IGST

Pros

  • Easier cross-state business
  • No multiple filings in different states

Cons

  • Delays in funds settlement between center and states sometimes reported
  • Understanding place of supply rules can be tricky for service sector

Comparison Table: CGST vs SGST vs IGST

TypeWho CollectsApplied OnInput Tax Credit UtilizationTypical Rate (2025)
CGSTCentral GovtIntra-state salesOnly for CGST2.5 to 9 percent
SGSTState GovtIntra-state salesOnly for SGST2.5 to 9 percent
IGSTCentral GovtInter-state or exportFor IGST, CGST, and SGST (with rules)5 to 18 percent

People Also Ask

Is IGST applicable on online sales across states in 2025?
Yes, IGST is levied if a sale is made from one state to a customer in another state, including through online marketplaces.


How Does UTGST Differ from SGST?

What is Union Territory Goods and Services Tax (UTGST)?

UTGST is similar to SGST but only applies in the Union Territories with no separate legislature, like Chandigarh, Ladakh, and Lakshadweep. It replaces the state portion of GST in those territories.

  • Charged alongside CGST on intra-territory sales.
  • Ensures a uniform tax structure across Union Territories.

Key Features or Highlights of UTGST

  • Applies to: Intra-UT transactions only
  • Collected by: Union Territory administration
  • Aim: To give same benefits as SGST to UT residents

Pros and Cons of UTGST

Pros

  • Uniform tax system in all Union Territories
  • Simplifies compliance for local retailers and service providers

Cons

  • Only beneficial for businesses in specified Union Territories
  • No state legislature to address policy concerns

Did You Know? As per 2025 GST norms, all UTs with own legislatures (like Delhi or Puducherry) now use SGST instead of UTGST for all applicable transactions.


What are GST Cess and Compensation Cess?

Why Was GST Cess Introduced?

GST Compensation Cess is a special charge on certain luxury and sin goods like cars, tobacco, and aerated drinks. It is used to compensate states for revenue losses due to GST roll-out.

  • Cess rates differ by item, usually over GST rate.
  • Only applicable on notified goods and services.

Key Features of GST Cess

  • Purpose: Compensate state revenue losses
  • Duration: Extended till March 2026 as per 2025 update
  • Products: High-end automobiles, coal, tobacco, etc.

Pros and Cons

Pros

  • Helps maintain state government finances
  • Discourages consumption of unhealthy or polluting goods

Cons

  • Increases price of affected items
  • Ineligible for input tax setoff against GST

People Also Ask

Is GST Cess included in the MRP?
Yes, for consumers, GST Cess is included in the Maximum Retail Price (MRP).


Expert Insight: “Businesses dealing in luxury or sin goods should regularly check the updated GST Cess notifications on the government portal, as rates and lists may change annually,” says a GST consultant.


How Do Online Marketplaces Handle Different Types of GST?

How is GST Applied on Online Sales in 2025?

Online marketplaces like Amazon or Flipkart ensure transparent GST compliance for sellers and buyers. They split the tax according to the place of supply rules—applying CGST and SGST for intra-state orders, and IGST for inter-state deliveries.

  • Marketplaces automatically issue GST-compliant invoices.
  • Sellers must upload GSTIN and file returns as per marketplace sales.

Key Features

  • GST invoicing systems are built-in
  • Instant computation and reporting
  • Easier to compare product prices and GST slabs across sellers

Pros and Cons

Pros

  • Sellers benefit from automated GST calculation
  • Buyers can compare final prices transparently

Cons

  • Some sellers face higher compliance costs in the initial setup stage
  • Occasional GST mismatches if details are incorrect

People Also Ask

Can I claim GST input on products purchased for business use from online marketplaces?
Yes, if GST invoice with your business GSTIN is provided, input tax credit can be claimed.


Did You Know? All online marketplaces in 2025 provide a one-click option to download GST input credit-ready invoices for easier expense tracking by businesses.


How to Decide Which Type of GST Applies to a Transaction?

What Factors Determine The Type of GST Charged?

The main deciding factors are:

  • If the sale and purchase are within the same state: CGST and SGST or UTGST apply.
  • If sale and delivery are across different states: IGST applies.
  • If the sale is from a Union Territory without a separate legislature: CGST and UTGST apply.
  • Ecommerce and online deliveries follow the place of supply rules.

Example Scenarios for 2025

  • A store in Goa selling to a customer in Goa charges CGST and SGST.
  • A seller in Daman (UT) selling within Daman charges CGST and UTGST.
  • A business in Delhi selling to Chennai will use IGST.

Key Features

  • Place of supply determines the type of GST.
  • Online tools and GST libraries are available for quick checking by address and pin code.

Pros and Cons

Pros

  • Ensures transparency in multi-state commerce
  • Simple compliance using digital GST calculators

Cons

  • Confusion in special scenarios like services or e-commerce
  • Place of supply rule demands understanding of latest updates

People Also Ask

How can new businesses automate GST selection?
Use online accounting software or GST filing tools which auto-detect the correct GST type based on customer address and product category.


Expert Insight: For micro and small businesses, many banks offer integrated GST solutions in their current account packages, reducing compliance hassles.


TL;DR or Quick Recap

  • There are four main types of GST: CGST, SGST, IGST, UTGST, each relevant for specific transaction types.
  • CGST and SGST: Applied on sales within the same state.
  • IGST: For sales across state borders or exports/imports.
  • UTGST: Used in Union Territories without a legislature.
  • GST Cess: Applicable on certain luxury and sin goods.
  • Online marketplaces and digital platforms in 2025 provide auto-GST invoicing and compliance features.

Understanding the different GST types ensures you stay compliant, claim eligible credits, and avoid penalties. Always check the latest GST rates and rules according to your market and business activity.

People Also Ask: FAQs

1. What are the 4 types of GST in India?
CGST, SGST, IGST, and UTGST.

2. When do you pay IGST instead of CGST and SGST?
For inter-state transactions, imports, and exports.

3. Is GST same for all states in 2025?
Base GST rates are uniform, but SGST revenue goes to respective states.

4. Can you claim input tax credit on all types of GST?
ITC is allowed under certain rules but not on GST Compensation Cess.

5. What if my business operates in multiple states?
You must obtain separate GST registration for each state or Union Territory from where you make supply.

6. How do I check GST breakdown on my bills from online sellers?
GST-compliant invoices clearly show CGST, SGST, or IGST as per shipping location.

7. Are GST types likely to change in future?
Minor updates may occur each year, but the four-type structure remains stable for 2025.

Stay updated, and take advantage of online marketplaces and software tools to simplify your GST compliance each step of the way.


Sources:
CBIC Official GST Guide
GST Law Times 2025 Edition
GST Portal - User Help

This article reflects the latest GST laws as of January 2025.

Related Search

Written by Prem Anand, a content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors.

Who is the Author?

Prem Anand is a seasoned content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors. He has a strong command of industry-specific language and compliance regulations. He specializes in writing insightful blog posts, detailed articles, and content that educates and engages the Indian audience.

How is the Content Written?

The content is prepared by thoroughly researching multiple trustworthy sources such as official websites, financial portals, customer reviews, policy documents and IRDAI guidelines. The goal is to bring accurate and reader-friendly insights.

Why Should You Trust This Content?

This content is created to help readers make informed decisions. It aims to simplify complex insurance and finance topics so that you can understand your options clearly and take the right steps with confidence. Every article is written keeping transparency, clarity, and trust in mind.

🏅 This content follows Google's People-First Content Guidelines

Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).

Why Choose Fincover®?

💸
Instant Personal Loan Offers
Pre-approved & 100% online process
🛡️
Wide Insurance Choices
Compare health, life & car plans
📊
Mutual Funds & Investing
Zero commission plans
🏦
Expert Wealth Management
Personalised goal-based planning
Get it on Google Play

Get Started with Fincover®

Download our app and explore loans, insurance, and investments – all in one place.