Unified vs Dual GST Model

Aspect	Unified GST Model	Dual GST Model
Definition	A single tax levied and collected by central authority	Two-level tax: levied by both Centre and States
Tax Authority	Only central/federal government	Both central and state/provincial governments
Structure	One law, one administration, one tax rate	Separate levies: CGST + SGST (intra-state), IGST (inter-state)
Compliance	Easier, as businesses deal with only one authority	More complex, requires dealing with both Centre and State authorities
Input Tax Credit	Seamless across the country	ITC available separately under CGST & SGST; cross-utilization restricted
Uniformity	High – same rates across the country	Rates can vary if states have flexibility (though GST Council strives for uniformity)
Examples	New Zealand, Singapore, UK, South Africa	India, Canada, Brazil

India’s Dual GST Model (Since 2017)

India follows a dual GST model due to its federal structure, where both the Centre and States have taxation powers.

· CGST – Central Goods and Services Tax (levied by Centre)

· SGST – State Goods and Services Tax (levied by State)

· UTGST – Union Territory GST (for UTs)

· IGST – Integrated GST (for inter-state supply, levied by Centre)

· India’s Constitution gives taxation rights to both Centre and States.

· A unified model would take away state taxation powers, which is not constitutionally feasible.

· Unified GST Model = Simpler, centralized (used in unitary countries)

· Dual GST Model = Shared powers, suitable for federal countries (like India)