Dr. Sanjiv Agarwal


Concurrent Dual GST

Here the 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. Thus, the GST would comprise a Central GST and State GST: a Central-level GST will subsume central taxes, such as, excise duty, CVD, SAD and service tax; and a State-level GST will subsume VAT, octroi, entry taxes, luxury tax, etc.

Therefore, under this model, both goods and services would be subject to concurrent taxation by the Centre and the States. This variant is closer to the model recommended by the Kelkar Committee in 2002.

Example: Under existing system Centre can levy tax on goods as well as on services, such as Excise duty on manufacture of goods and Service tax on Services but State has no power to levy Tax on manufactured goods such as VAT but in concurrent dual GST model both Centre and State will have power to levy taxes on both Goods and Services.



  • This model is achievable in the short term and no significant changes are required in the current structure of indirect taxation.
  • It removes cascading effect of taxes significantly.
  • It maintains a good balance between fiscal autonomy of the Centre and States, and the need for harmonization.
  • It empowers both levels of Government to apply the tax to a comprehensive base of goods and services, at all points in the supply chain.
  • It requires least change in infrastructure of tax departments at the Union and State levels.
  • It improves the competitive environment for company working globally.
  • As single taxation system it reduces cost to the consumer.


  • It is not an ideal model. It can be a temporary or transitional model since tax would continue to be levied at two levels.
  • Compliance costs may not reduce significantly.
  • There will always be uncertainty since States might depart from the principles of uniformity.
  • To frame a comprehensive model for taxation of inter-State transactions of goods and services and sharing of its revenue amongst the State will be a challenge.

Non-concurrent Dual GST

 Under the concurrent dual GSTs, the Centre and State taxes apply concurrently to supplies of all goods and services. However, it poses two challenges. First, it requires a constitutional amendment. Second, a framework is needed for defining the place of supply of inter-State services and for the application of State GST to them.

 Therefore, as suggested in the Poddar-Ahmed Working Paper, to circumvent both of these hurdles, 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 inter- State services.

 Under this model, while levying the VAT on services, the Centre would essentially play the coordinating role needed for the application and monitoring of tax on inter-State services. The Centre would withdraw from the taxation of goods. Even the revenues collected from the taxation of services could be transferred back to the States, partially or fully.

 Within this framework, cascading could be completely eliminated by the States agreeing to allow an input credit for the tax on services levied by the Centre. Likewise, the Centre would allow an input credit for the tax on goods levied by the States.

 However, the said model may not be acceptable to the Centre as well as the States. Moreover, constitutional amendment would still be required in this model since the States are not presently empowered to levy sales tax on goods where movement of such goods take place in the course of inter-State trade or commerce. Therefore, the Government has already announced its intention to follow the Concurrent Dual GST of such goods take place in the course of inter-State trade or commerce. Therefore, the Government has already announced its intention to follow the Concurrent Dual GST.


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