CGST

CGST stands for Central Goods and Services Tax. It is a tax levied by the Central Government on the supply of goods and services within India. CGST is part of the integrated Goods and Services Tax (GST) system that replaced most indirect taxes in India. When a transaction occurs within a state, both CGST and SGST (State Goods and Services Tax) are levied. CGST is collected by the Central Government, and SGST is collected by the respective State Governments. The rates for CGST and SGST are generally the same, and they are applied to the taxable value of the supply.

The introduction of GST, including CGST, aimed to create a unified national market, reduce tax cascading, and simplify the indirect tax structure. Businesses registered under GST are required to charge CGST on their taxable outward supplies and can claim input tax credit for the CGST paid on their inward supplies. This mechanism ensures that the tax is levied only on the value addition at each stage of the supply chain. The revenue collected from CGST is utilized by the Central Government for its various developmental and administrative purposes. The CGST Act, 2017, along with the IGST Act and SGST Acts of various states, forms the legal framework for the GST regime in India.