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CMA Intermediate · Direct and Indirect Taxation · Concept of Indirect Taxes

India has adopted a dual GST model. Which statement about it is correct?

Under India's dual GST, the Centre levies CGST on intra-State supplies and IGST on inter-State supplies, while the State levies SGST on the same intra-State transaction value. Both levy tax concurrently on a common base, unlike the earlier separate division of goods and services taxation.

  1. ACentre levies and collects CGST and IGST, while States levy SGST, both on a common base for intra-State suppliesCorrect
  2. BOnly the Centre levies tax on all supplies, and States receive grants
  3. CStates alone levy tax on goods and the Centre alone on services
  4. DDual GST means two different tax rates for goods and services at the same time

Explanation

In India's dual GST, on intra-State supplies the Centre levies CGST and the State levies SGST (or UTGST) on the same taxable value. On inter-State supplies the Centre levies IGST. The old division of goods versus services between States and Centre no longer applies.

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