Central and State Taxes Subsumed into GST in India
Goods and Services Tax was introduced from 1 July 2017 as a destination-based indirect tax designed to replace and consolidate a large number of Central and State taxes on the supply of goods and services. This page explains which taxes were subsumed into GST and which important taxes or commodities remain outside the GST framework.
Central Taxes Subsumed into GST
The principal Central taxes and duties absorbed into GST included the following:
Central Excise Duty
Central Excise Duty was historically imposed on the manufacture or production of specified goods in India. With the introduction of GST, excise duty on most goods was subsumed into GST, subject to important exclusions and continuing excise levies on specified products.
Duties of Excise
Duties of Excise under the Medicinal and Toilet Preparations legislation, together with specified Additional Duties of Excise, formed part of the Central indirect-tax structure subsumed into GST.
Service Tax
Service Tax, which applied to taxable services before GST, was subsumed into GST from 1 July 2017. The earlier service-tax rate and related cesses therefore have no application to ordinary post-GST supplies.
Additional Customs Duty (CVD)
The Additional Duty of Customs commonly known as Countervailing Duty or CVD was among the principal Central levies subsumed into GST. On imports, IGST now generally performs the corresponding GST function, subject to the Customs Tariff Act and applicable exemptions.
Special Additional Duty of Customs (SAD)
The Special Additional Duty of Customs, historically imposed to counterbalance domestic State-level indirect taxes, was also among the levies subsumed into GST.
Central Cesses and Surcharges
Central cesses and surcharges were subsumed insofar as they related to the supply of goods or services, subject to the specific statutory treatment of individual levies.
State Taxes Subsumed into GST
The principal State taxes and levies subsumed into GST included:
State VAT / Sales Tax
State Value Added Tax and sales tax on goods within the GST framework were substantially replaced by SGST/UTGST and IGST, subject to commodities that remain outside GST.
Central Sales Tax
Central Sales Tax on inter-State sales of goods brought within GST was replaced in practical terms by the IGST mechanism. CST can continue to be relevant for goods that remain outside GST.
Purchase Tax
State purchase tax was among the levies subsumed into GST for transactions falling within the GST framework.
Entry Tax and Octroi
Entry tax in its various forms was among the State and local levies absorbed into GST, removing an important layer of tax on the movement or entry of goods. Historical octroi and local-body arrangements depended on the particular levy and legislation.
Luxury Tax
State luxury tax on supplies brought within GST was subsumed, with GST applying according to the current classification and rate notifications.
Entertainment and Amusement Tax
Entertainment and amusement taxes were subsumed except where the levy is imposed by local bodies within the constitutional framework.
Tax on Advertisements
State taxes on advertisements were included among the State taxes subsumed into GST.
Lottery, Betting and Gambling Taxes
State taxes on lotteries, betting and gambling were included among the taxes subsumed into GST. This is distinct from income-tax consequences on winnings and from the current GST treatment of specified actionable claims.
Official Summary of Taxes Subsumed into GST
| Central taxes | State taxes |
|---|---|
| Central Excise Duty | State VAT / Sales Tax |
| Duties of Excise (Medicinal and Toilet Preparations) | Central Sales Tax |
| Additional Duties of Excise (Goods of Special Importance) | Purchase Tax |
| Additional Duties of Excise (Textiles and Textile Products) | Luxury Tax |
| Additional Duties of Customs (CVD) | Entry Tax (all forms) |
| Special Additional Duty of Customs (SAD) | Entertainment and Amusement Tax, except when levied by local bodies |
| Service Tax | Taxes on advertisements |
| Central cesses and surcharges insofar as related to supply of goods or services | Taxes on lotteries, betting and gambling, and State cesses/surcharges insofar as related to supply |
Taxes and Commodities Not Fully Subsumed into GST
GST did not absorb every levy. The following remain important exceptions:
- Alcoholic liquor for human consumption is constitutionally outside GST.
- Petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel remain outside GST until the legally prescribed date is brought into force on the recommendation of the GST Council.
- State VAT/CST and Central excise can therefore continue to apply to specified petroleum products under the applicable laws.
- State excise and VAT continue to be relevant to alcoholic liquor for human consumption under the respective laws.
- Electricity duty is not subsumed into GST merely because GST applies generally to supplies.
- Motor vehicle tax, stamp duties and various regulatory fees are separate levies and were not generally absorbed into GST.
- Entertainment tax may continue where constitutionally levied by local bodies.
How GST Replaced the Earlier Tax Structure
GST created a dual tax model. On an intra-State taxable supply, Central GST and State GST or Union Territory GST are generally levied together. On an inter-State taxable supply, Integrated GST is levied. The input-tax-credit mechanism was designed to reduce the cascading effect that arose when several Central and State taxes applied at different points in the supply chain.
Why Were These Taxes Subsumed?
The official GST framework identified levies for subsumption primarily where they were indirect taxes connected with the supply chain from import, manufacture or provision of services through final consumption. A major objective was to enable a more continuous flow of tax credit across intra-State and inter-State transactions and to reduce tax-on-tax effects.
Current Position as on 1 September 2026
The historical list of taxes absorbed into GST remains important for understanding how the Indian indirect-tax system changed from 1 July 2017. For current transactions, however, liability must be determined under the CGST Act, SGST/UTGST law, IGST Act, current rate and exemption notifications, and any surviving non-GST legislation applicable to excluded goods or separate taxes.