Question

Explain ‘Dual GST’.

Hint:

Under Dual GST, both the Centre and the State levy GST on one supply, as CGST and SGST. Between states, IGST is charged.

Answer 1

Step 1: What 'Dual GST' means:
India has a federal set-up. The Centre and the States both have the power to tax. So GST is levied by both of them on the same supply.
This two-level system, one tax run by the Centre and one by the State, is called Dual GST.

Step 2: Components of Dual GST:
On a supply inside a state, two taxes are charged: CGST (for the Centre) and SGST (for the State). In a Union Territory without legislature, UTGST is charged in place of SGST.
On a supply between two states, only IGST is charged. The Centre collects it and shares it with the destination state.

Step 3: Example:
A trader in Jaipur sells goods of ₹10,000 to a buyer in Jodhpur. GST is 18%.
CGST is 9% of ₹10,000 = ₹900. SGST is 9% of ₹10,000 = ₹900. The buyer pays ₹11,800 in all.

Step 4: Why it is useful:
Both governments get their own share of revenue. Taxes on the same goods are no longer piled up one over another. The country moves towards one common market.

Final Answer:
Dual GST is the GST system where the Centre and the State both levy GST on the same transaction, through CGST and SGST (and IGST for inter-state sales).