1) CGST: – Under this option, the two levels of government would combine their levies in the form of a single National GST, with appropriate revenue sharing arrangements among them. In the case of a Central GST (where all goods and services are taxed by the Central government only), the Centre will collect most of the country’s total tax revenue, leaving very little for the sub national Governments.
2) SGST: – The second model is to have a State GST in which the States alone levy GST and the Centre withdraws from the field of GST or VAT completely. In this case, the State GST will work as the redistributing mechanism. The loss to the Centre from vacating this tax field could be offset by a suitable compensating reduction in fiscal transfers to the States. This would significantly enhance the revenue capacity of the States and reduce their dependence on the Centre.
3) Dual GST Model
a) Non-Concurrent Dual GST: -Under this model, GST on goods can be levied by the States only and on services by the Centre only. The States already have the power to levy the tax on the sale and purchase of goods (and also on immovable property), and the Centre for taxation of services. No special effort would be needed for levying a unified Centre tax on interstate services. This model of dual GST would not be acceptable to the Centre as well as the States. Hence, the Government has already announced its intention to follow the Concurrent Dual GST.
b) Concurrent Dual GST :- It consist of both the Central GST and State GST levied on same base. Under this model, GST will be levied by both tiers of Governments concurrently. There will be Central GST to be administered by the Central Government and there will be State GST to be administered by State Governments. In this model, both goods and services would be subject to concurrent taxation by the Centre and the States. All types of goods and services will be brought under this proposed GST structure except few exceptions. India and Canda follow the Concurrent dual GST model.
For Example, if a product has a cost of Rs. 10,000 and rate of CGST and SGST are 9% then in such case both CGST and SGST will be charged on Rs. 10,000 i.e. CGST will be Rs 900/- and SGST will be Rs. 900/-
Features of Proposed Indian Dual GST:-
• Single Registration:- Registration under GST is pan based which means PAN is mandatory for all assesses. The respective asseses are required to take registration for each premises in each state from which supplies are made. Under GST Each assesses are treated as separate assesses and the concept of separate legal entity is totally wiped out.
• Destination principle:- The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-state transactions within India, State tax would apply in the state of destination as opposed to that of origin
• Uniform Method: – Procedures for collection of Central and State GSTs would be uniform. Payment of tax is totally online through net-banking thereby encouraging ease of doing business
• Returns: – There are eight GST returns which need to be filled by the persons. As per the proposal, the returns can be filed on a specific date of a month, like on 10th of next month for outward supplies, 15th for inward supplies and 20th in case of monthly returns. There is a provision for filing of GST returns by non-resident tax payers in form GSTR-5. Non-resident tax payers could include taxi aggregators like Uber.
There will be a defaulters list of those who will be failing to file returns periodically and such details would be forwarded to GST authorities for necessary action.
• Administration:- Harmonization of center and state tax administrations, which would reduce duplication and compliance costs. Elimination of multiplicity of taxes and their cascading effects.
• Classification of goods & services: – HSN (Harmonized System of nomenclature) will form the basis of product classification for Central GST and State GST and Service tax accounting codes (commonly known as SAC) for services.