Stage 1 · GST basics
GST-1: One Tax, Many Hands
Follow one school uniform from yarn to a parent and watch ₹25 of GST travel. Learn why every business collects it, and only one person really pays it.
What you will learn in GST-1
- What GST is, and CGST, SGST and IGST (s. 9)
- Why each business pays only on the value it adds
- Input tax credit in one picture (s. 16)
- The GST on a ₹10 lakh school order
Chapters
- Who pays GST? · GST is charged at every sale, but the buyer at the end carries it (s. 9)
- Each one pays only on what they add · Collect GST on the sale, take credit for GST on purchases, pay the difference (s. 16)
- 2,000 uniforms at once · The same idea for the whole school order (s. 9)
- Spot the mistakes · Five things people often get wrong about GST (ss. 9, 16)
Key terms
- Goods and Services Tax (GST) (s. 9): One tax on the supply of goods and services across India, charged at each sale. Within a state it is split into Central GST (CGST) and State GST (SGST); between states it is Integrated GST (IGST).
- Input tax credit (ITC) (s. 16): The GST a registered business paid on what it bought for its business, which it can set off against the GST it collects on its sales.
Common questions
Who actually pays GST?
The final consumer, through the price. Registered businesses collect GST on sales and claim credit for GST on purchases, so they pay the government only the tax on the value they add.
What is the difference between CGST, SGST and IGST?
A sale within one state carries CGST (to the Centre) and SGST (to the state) in equal halves. A sale from one state to another carries IGST, collected by the Centre and shared with the destination state.
What is input tax credit?
The GST a registered business paid on its business purchases, which it sets off against the GST it collects on its sales (section 16).
CGST Act, 2017, sections 9 and 16. Checked against the GST law in force on 8 November 2026. Selvi Garments, the school order and every figure in this lesson are fictional. Read the official text on the CBIC GST Acts and Rules page ↗ before applying it to real work.