Last updated on: July 29, 2025
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.
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.
India’s GST structure has four main types:
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.
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.
Pros
Cons
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.
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.
Pros
Cons
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.
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.
Pros
Cons
Type | Who Collects | Applied On | Input Tax Credit Utilization | Typical Rate (2025) |
---|---|---|---|---|
CGST | Central Govt | Intra-state sales | Only for CGST | 2.5 to 9 percent |
SGST | State Govt | Intra-state sales | Only for SGST | 2.5 to 9 percent |
IGST | Central Govt | Inter-state or export | For IGST, CGST, and SGST (with rules) | 5 to 18 percent |
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.
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.
Pros
Cons
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.
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.
Pros
Cons
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.
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.
Pros
Cons
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.
The main deciding factors are:
Pros
Cons
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.
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.
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.
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Written by Prem Anand, a content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors.
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.
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.
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