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CS Executive · Tax Laws and Practice · Basics of Goods and Services Tax

Under India's dual GST model, which of the following correctly describes how tax is levied on an intra-State supply of goods?

On an intra-State supply, both central tax and State or Union Territory tax are levied on the same transaction. This reflects India's dual GST model, where the Centre and the States each levy tax. Integrated tax applies to inter-State supplies, not to intra-State ones.

  1. AOnly central tax is levied, and the States receive a share through the divisible pool
  2. BCentral tax and State tax (or Union Territory tax) are both levied on the same transactionCorrect
  3. COnly integrated tax is levied, and it is split later between the Centre and the State
  4. DOnly State tax is levied, and the Centre receives a share through the Finance Commission

Explanation

India follows a dual GST model in which the Centre and the States both levy tax. On an intra-State supply, CGST and SGST (or UTGST in a Union Territory) are charged together. Integrated tax is meant for inter-State supplies, so the option mentioning only IGST is wrong.

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