What is the taxation structure for Indian businesses under GST?
GST follows a dual tax model for intrastate transactions, comprising:
- Central GST (CGST) – levied by the central government
- State GST (SGST) – levied by the state government
For interstate transactions, a combined Integrated GST (IGST) is charged and collected by the central government.
The GST system includes the following tax slabs:
- Zero-rated supplies - 0%
- Lower rate - 5%
- Standard rates - 12% and 18%
- Higher rate - 28%
Additionally, an Extra Cess applies to goods like tobacco, luxury cars, and aerated drinks. All GST-registered businesses receive a 15-digit GSTIN, which is PAN-based and used to track and reconcile transactions on the GST portal.