GST explained: how India’s goods and services tax works
The Goods and Services Tax, or GST, is India’s main indirect tax. It applies to most goods and services sold in the country.
GST replaced many older taxes in 2017. Before GST, different states charged different taxes. This made goods cost different amounts across state borders.
GST is charged at each step of production. Each business pays tax on what it sells and claims credit for the tax it paid on inputs. The final consumer bears the full tax.
There are several tax slabs. Essentials attract low rates. Luxury items and tobacco attract the highest rates plus extra cesses.
The revenue is shared between the Centre and the states. Central GST and State GST apply within a state. Integrated GST applies on trade between states.
Collections are a key economic signal. India’s GST collection rose to over Rs 2 lakh crore in September 2026, showing strong domestic demand and imports.
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Khabar 24h Editorial Desk — our explainers are prepared by the Khabar 24h editorial team using AI-assisted research tools, and every piece is reviewed by a human editor before publishing. We do not claim original reporting: our work is turning complex topics into simple, accurate summaries. Spotted an error? Write to contact@khabar24h.com — our corrections policy aims for same-day review.
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