Guide to Types Of GST in 2025

Goods and Services Tax (GST) is now the backbone of India’s indirect taxation system. GST has restructured the manner in which the businesses are conducted and the taxes are charged, collected, and credited since its introduction. Regardless of whether you operate a small online store or a multinational corporation, it is important to know the various forms of GST to ensure compliance, proper invoicing and input tax credit.

The significance of the knowledge of the GST framework is even greater in 2025 when the government introduces new amendments and the digital platforms simplify the process of compliance. This guide discusses all types of GST, differences between them, real life examples, characteristics, advantages and disadvantages, and the most recent changes that are important to businesses and consumers in 2020.

What are Types of GST in India?

There are four broad categories of GST in India:

• CGST - Central Goods and Services Tax
• SGST - State Goods and Services Tax
• IGST - Integrated Goods and Services Tax
• UTGST - Union Territory Goods and Services Tax

Depending on the nature of the transaction, GST types play a particular role in the taxation of India. How do each of them work in real business life? Let us find out.

Did You Know? The GST Council in 2025 facilitated a new real-time online GST dashboard to monitor and comply with all GST types better.

What is CGST Transaction?

The Central Government collects CGST on intra-state sales — in other words, when a sale occurs within the same state. An example is where a mobile store in Mumbai sells a phone to a customer in Pune both in Maharashtra, CGST is charged.

• The prevailing rate of CGST is always a half of the overall GST rate of the item.
• The CGST paid can be offset as an input tax credit by businesses.

Salient Features or Highlights of CGST

• Applicable: Only in intrastate sales
• Compiled by: Central Government of India
• Credits: Input tax credit available
• Online Filing: Returns payable monthly have to be filed on government GST portal

Pros

• Makes it easier to collect central taxes
• Minimises tax-on-tax problems experienced in the previous system

Cons

• Dual reporting and SGST necessary
• Micro and small business may find initial registration complicated

People Ask
Q: What is CGST in 2025?
A: CGST is 50 percent of the total GST rate, which, depending on the product or service, is charged on the value of an invoice.

What is SGST and When it is used?

Just like CGST, SGST is the state government tax on intra-state transactions. It is constantly in percentage equal to CGST on some particular good or service. When you purchase groceries at the local city market, SGST is levied together with CGST.

• SGST revenue is utilised in development and welfare activities by the states.
• The businesses have to state SGST separately on invoices.

Important Facilities or Aspects of SGST

• In Favor: Intra state sales and purchases
• Compiled by: Individual State Government
• Compliance: Monthly and yearly reports required

Pros

• Direct tax revenue is obtained by state governments
• Contributes to the local business growth

Cons

• Persistent compliance cost
• The state may at times adjust tax rates

People Ask
Q: Is SGST credit applicable to pay CGST?
A: No, SGST input credit is utilizable only against SGST liability, not against CGST or IGST.

Professional Tip: GST e-invoicing systems, compulsory in 2025 for businesses with turnover of more than 5 crore, automatically calculate and separate the CGST and SGST on your behalf.

On what Goods and Services is IGST Charged?

IGST will be applicable when there is movement of goods or services between states or on eligible exports and imports. In case you have a business in Delhi and sell a laptop to a client in Bangalore, IGST will be levied since it is an inter-state supply.

• The IGST rate is an addition of the CGST and SGST.
• IGST is paid to central government which is subsequently divided among the states on a destination basis.

Important Characteristics or Overview of IGST

• In favor of: Inter-state trade, imports, and exports
• Compiled by: Central Government
• Settlement: Revenue to states
• Invoices: Only IGST is displayed, not divided into CGST+SGST components

Pros

• Less difficult interstate commerce
• No interstate multiple filings

Cons

• Sometimes delays in settlement of funds between center and states
• Rules of place of supply may be difficult for service sector

CGST Vs SGST Vs IGST Comparison Table

People Ask
Q: Will IGST apply on interstate online sales in 2025?
A: Yes, IGST is charged when a sale is made within one state to a customer in another state even via online market places.

What is the Difference between UTGST and SGST?

UTGST is synonymous to SGST but only applicable in the Union Territories which do not have a separate legislature such as Chandigarh, Ladakh, and Lakshadweep. It takes the place of the state component of GST in those territories.

• Levied together with CGST on inter-territory sales.
• Maintains consistency in tax in Union Territories.

Important Provisions or Salient features of UTGST

• Intra-UT transactions only
• Gathered by: Union Territory administration
• Objective: To provide same benefits that SGST provides to the residents of UT

Pros

• Single tax regime in all the Union Territories
• Makes compliance easier to local retailers and service providers

Cons

• Limited to businesses in designated Union Territories
• No state lawmaking body to appeal to policy issues

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 is GST Cess and Compensation Cess?

The Introduction of GST Cess

GST Compensation Cess is a special levy on some luxury and sin items such as cars, tobacco and aerated drinks. It is employed to recompense states for revenue losses caused by GST roll-out.

• Cess rates are item-wise and typically above GST rate.
• Only applicable on notified goods and services.

Major GST Cess Characteristics

• Purpose: To compensate state revenues losses
• Length: Till March 2026 as per 2025 update
• Products: Luxury cars, coal, tobacco, etc.

Pros

• Sustains state government finances
• Discourages unhealthy or polluting products

Cons

• Increases cost of affected goods
• Cannot set off input tax against GST

People Ask
Q: Does MRP include GST Cess?
A: Yes, for consumers, GST Cess is included in the Maximum Retail Price (MRP).

How Online Marketplaces Manage Various GST?

A seller and buyer on online marketplaces such as Amazon or Flipkart can be assured of transparent GST compliance. They divide the tax based on the place of supply guidelines — CGST and SGST in intra-state orders and IGST in inter-state deliveries.

• Invoices that are GST compliant are automatically generated in marketplaces.
• Sellers have to upload GSTIN and file returns according to marketplace sales.

Key Features

• Built-in GST invoicing systems
• Real-time calculation and reporting
• Easier to compare prices of products and GST slabs among sellers

Pros

• Automated GST calculation benefits sellers
• Customers can compare end prices openly

Cons

• Sellers may incur greater costs during initial setup phase
• Occasional GST mismatches if data is incorrect

People Ask
Q: I am buying products online marketplaces to use in my business. Can I claim GST input?
A: Yes, if GST invoice containing your business GSTIN is provided then input tax credit can be claimed.

The procedure of choosing the kind of GST to apply on a transaction

• Same state: CGST and SGST or UTGST apply.
• Across states: IGST applies.
• Union Territory without legislature: CGST and UTGST apply.
• Online deliveries follow place of supply rules.

Scenarios 2025

• Shop in Goa selling to buyer in Goa: CGST + SGST.
• Seller in Daman (UT) selling within Daman: CGST + UTGST.
• Delhi business selling to Chennai: IGST.

In short / TL;DR / Short Summary

• Four forms: CGST, SGST, IGST, UTGST for different transaction types.
• CGST & SGST: Intra-state sales.
• IGST: Inter-state sales or exports/imports.
• UTGST: For UTs without legislature.
• GST Cess: On luxury and sin goods.
• 2025: Auto-GST invoicing in marketplaces.
• Knowing GST types helps in compliance, credit claims, and avoiding penalties.

FAQs: People Also Ask

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

2. When do you pay IGST?
   For inter-state, imports and exports.

3. Are GST rates equal in all states in 2025?
   Basic rates are uniform, SGST revenue varies by state.

4. Is ITC allowed on all GST types?
   Allowed on most, not on GST Compensation Cess.

5. Business in multiple states?
   Separate GST registration in each state/UT.

6. How to verify GST split in online bills?
   GST-compliant invoices indicate applicable GST type.

7. Will GST types change?
   Structure remains, rates may update annually.

Sources:

• Official GST Guide CBIC
• GST Law Times 2025 Edition
• GST Portal - Help to User