Administrative Structure of GST in India

What is the Structure of GST in India?

Working in a dual model, India’s GST system includes the Central and State Governments, and both have the power to levy and collect taxes. It also provides a shared responsibility toward tax collection and allocation of revenues within the country. There are different taxes levied under the structure of GST in India:

• Central GST (CGST): Any tax levied by the Central Government on intra-state supplies of goods and services (transactions within the same state).
• State GST (SGST): This is a tax levied by the respective State Governments on the movement of goods and services within a state.
• Integrated GST (IGST): A tax imposed by the Central Government on interstate supplies, i.e. transactions carried out between two or more states or Union territories. Also applies to imports at the point of entry.
• Union Territory GST (UTGST): Similar to SGST, UTGST applies to intra-union territory transactions and is levied and collected by the Central Government for specific Union Territories without a legislature (e.g., Chandigarh, Lakshadweep).

Also Read: SGST, CGST and IGST – What They Mean, How They Differ & Their Challenges

Structure of GST (Four-tier Tax System)

Indian GST has a tier-rate structure, incorporating a four-tier system to categorise and tax goods and services based on their nature, essentiality, and market conditions. Here’s a breakdown of the entire system:

Importance of Understanding the Structure of GST

• Compliance Management: Establishing which authority is responsible for what matter can help businesses send the queries to the proper channels, thereby avoiding undue delays in compliance. For example, if it’s a registration issue, it lies with state authorities; if it’s an interstate transaction query, it falls under the purview of the central departments.
• Strategic Planning: The existence of the multiple-tiered set-up gives businesses the responsibility of considering various compliance requirements when setting up intrastate operations.
• Risk Mitigation: Awareness of the administrative hierarchy helps businesses prepare for potential audits and assessments. Different levels handle different types of scrutiny and understanding. This helps in maintaining appropriate documentation and compliance standards.
• Dispute Resolution: The structured appeal mechanism, from original authority to appellate authority to tribunal, requires businesses to understand jurisdictional aspects for effective grievance redressal.

Also Read:  What is IGST - Integrated Goods & Services Tax? Meaning & Full Form

GST Regulations and Changes

In the tax reform journey of India, GST stands out as one of the biggest reforms. Introduced in 2017, it brought tax uniformity and improved transparency by merging multiple indirect taxes into a single system. The body behind GST reforms is the GST Council, a joint body of the Centre and States that collectively makes recommendations and decides key issues on implementation.

Over 7 years later, the data shows increased tax compliance across the country and a growing formalisation of the economy: the highest gross collection of GST in 2024-25 amounted to ₹22.08 lakh crore, showcasing a rise of 9.4% from the previous year.

The long-overdue 56th GST Council meeting is set to take place in August 2025, after Parliament concludes its monsoon session. Reportedly, the GST structure could undergo a key reform, though no official sources have confirmed the same yet. Among the discussions are revisions to the current four-slab structure by eliminating the 12% slab and implementing simpler rules.

To Conclude

The administrative structure of GST in India is designed to provide clarity and efficiency to the taxation system. This directly responds to the day-to-day activities of business, including its needs concerning finances and compliance. From applying for Business Loans to filing GST as part of compliance, it’s crucial to stay up to date with the current GST framework.

Frequently Asked Questions

Who administers GST in India?

GST is administered jointly by the Central Government, through the CBIC, and the State Governments, through their State Tax Departments. This dual administration ensures compliance.

What are the four GST tax slabs in India?

The main GST rates are as follows: 5% (lower rate slab), 12-18% (standard rate slab), and 28% (higher rate slab). Goods and services are categorised into these slabs depending on their nature and usage.

What is the role of the GST Council?

The GST Council is a constitutional authority that provides recommendations on matters concerning the implementation of the Goods and Services Tax (GST) in India.

Are all products and services covered under GST?

No, some items like petrol, diesel, and alcohol are excluded from GST and continue to be taxed separately by state or central governments.

What documents are required for GST Registration?

Some mandatory documents required for GST registration are PAN, proof of business address, bank account details, identity, and address proof of the proprietor or directors.

How has GST benefited businesses?

GST has streamlined the indirect tax system by putting in place a uniform tax structure and a centralised mode of collection all across the country. It has, therefore, helped businesses enhance their operational efficiency and cut down on operating costs.