GST (Goods and Services Tax) is India's unified indirect tax system, implemented on July 1, 2017. It replaced multiple cascading taxes (excise, VAT, service tax) with a single tax system.
GST Rate Slabs
- 0%: Essential goods (milk, fresh vegetables, grains)
- 5%: Basic necessities (packaged food, footwear under ₹1,000)
- 12%: Standard goods (butter, mobile phones)
- 18%: Most services (IT services, restaurants)
- 28%: Luxury/sin goods (cars, tobacco, aerated drinks)
Components
On intra-state sales: CGST + SGST. On inter-state sales: IGST. Input tax credit allows businesses to deduct tax paid on purchases.