BharatNotes What is CGST?
CGST (Central Goods and Services Tax) is the component of GST levied by the Central Government on intra-state supplies of goods and services, i.e., supplies where the location of the supplier and the place of supply are in the same state or union territory. It is governed by the Central Goods and Services Tax Act, 2017 (Act No. 12 of 2017), which received Presidential assent on 12 April 2017; the GST regime itself was rolled out nationwide on 1 July 2017. On every intra-state transaction, CGST and SGST (or UTGST) are charged simultaneously and in equal halves of the applicable GST rate, with CGST revenue going to the Centre.
Constitutional and Legal Basis
The Constitution (101st Amendment) Act, 2016 created the framework for GST. Article 246A confers concurrent power on Parliament and state legislatures to legislate on GST; Article 269A governs IGST on inter-state trade; and Article 279A establishes the GST Council, chaired by the Union Finance Minister, on whose recommendations CGST rates are notified. Under Section 9 of the CGST Act, the levy applies to all intra-state supplies except alcoholic liquor for human consumption, at rates not exceeding 20 per cent. Petroleum products remain outside GST until the Council decides otherwise.
| Component | Levied by | Applies to | Revenue goes to |
|---|---|---|---|
| CGST | Centre | Intra-state supply | Central Government |
| SGST/UTGST | State/UT | Intra-state supply | State/UT Government |
| IGST | Centre | Inter-state supply and imports | Apportioned between Centre and states |
Key Features
- CGST subsumed major central levies: Central Excise Duty, Service Tax, Additional Customs Duty (CVD), Special Additional Duty and central surcharges and cesses.
- Input tax credit (ITC) of CGST can be used against CGST and IGST liability, but not against SGST — preserving the fiscal separation of the two governments.
- Administration is by the Central Board of Indirect Taxes and Customs (CBIC), with taxpayers divided between central and state administrations under cross-empowerment arrangements.
Current Status (as of June 2026)
The 56th GST Council meeting (3 September 2025) approved the "GST 2.0" rationalisation: the 12% and 28% slabs were abolished, leaving a two-rate structure of 5% (merit) and 18% (standard), plus a 40% de-merit rate for luxury and sin goods, effective 22 September 2025 for most items. Life and health insurance were exempted. Gross GST collections stood at ₹1,94,184 crore in May 2026 (up 3.2% year-on-year), of which gross domestic CGST was ₹37,397 crore; April 2026 saw a record ₹2,42,702 crore.
UPSC Angle
CGST is a foundational concept that underpins questions on fiscal federalism, the 101st Amendment, the GST Council and centre–state revenue sharing. Prelims typically tests the CGST–SGST–IGST distinction and which articles govern each; Mains (GS3) draws on it for questions on indirect tax reform, revenue buoyancy and the impact of the 2025 rate rationalisation on consumption and state finances.
