Taxes Subsumed Under GST in India: Complete List, Meaning, and Current Status
- GST was introduced to replace multiple central and state indirect taxes with one common tax system.
- Central taxes such as Central Excise Duty, Service Tax, CVD, SAD, and related cesses were subsumed under GST.
- State taxes such as VAT, CST, Entry Tax, Octroi, Luxury Tax, Purchase Tax, Entertainment Tax except local body levies, and taxes on lotteries, betting and gambling were subsumed.
- Not every tax was merged into GST. Basic Customs Duty, stamp duty, electricity duty, property tax, road tax, and excise/VAT on alcohol for human consumption remain outside GST.
- Petroleum products are constitutionally included under GST, but GST is not yet levied on petrol, diesel, crude oil, natural gas, and ATF. Existing taxes continue until the GST Council recommends a date.
- Local body entertainment tax was not subsumed. Only state-level entertainment and amusement tax was brought under GST.
- Businesses should not assume that all indirect taxes disappeared after GST. Some sector-specific taxes and duties still continue separately.
What Does “Taxes Subsumed Under GST” Mean?
India introduced GST on July 1, 2017, following the 101st Constitutional Amendment Act, 2016. This amendment created the constitutional framework for GST and enabled both the Center and States to levy GST on the supply of goods and services.
Taxes subsumed under GST are the former indirect taxes absorbed into the GST system. Before GST, businesses had to deal with different taxes at different stages, such as excise duty at the manufacturing stage, VAT at the sale stage, service tax on services, CST on interstate sales, and entry tax or octroi on the movement of goods.
After GST, many of these taxes no longer applied as separate levies. Instead, GST became the main tax on the supply of goods and services. For an intrastate supply, GST is charged as CGST and SGST . For an interstate supply, GST is charged as IGST. In simple words, subsumption means that several older indirect taxes were merged into one broader GST framework.
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Why Were Multiple Taxes Merged into GST?
Before GST, India’s indirect tax system was fragmented. The Center taxed manufacturing and services, while States taxed the sale and movement of goods. This created confusion, led to repeated tax payments, and resulted in different compliance rules across states.
The biggest issue was the cascading effect , commonly called tax on tax. For example, a manufacturer could pay excise duty on production, and later VAT could be charged on a value that already includes excise duty. This increased the final cost for businesses and consumers.
GST was introduced to reduce this problem. It allows input tax credit across the supply chain, so tax is generally paid only on the value added at each stage. It also created a more uniform tax system for businesses operating across India.
Central Taxes Subsumed Under GST
| Central Tax | What It Meant Before GST |
|---|---|
| Central Excise Duty | Tax on the manufacture of goods |
| Duties of Excise on Medicinal and Toilet Preparations | Excise duty on specified medicinal and toilet products |
| Additional Duties of Excise | Additional excise on selected goods |
| Additional Duties of Customs (CVD) | Duty on imports to balance domestic excise duty |
| Special Additional Duty of Customs (SAD) | Duty on imports to balance state-level taxes like VAT |
| Service Tax | Tax on taxable services |
| Central cesses and surcharges related to supply of goods and services | Additional levies connected with earlier indirect taxes |
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Note: Basic Customs Duty was not subsumed under GST. For imports, GST may be levied as IGST, but Basic Customs Duty continues to be levied separately.
State Taxes Subsumed Under GST
| State Tax | What It Meant Before GST |
|---|---|
| State VAT / Sales Tax | Tax on sale of goods within a state |
| Central Sales Tax (CST) | Tax on interstate sale of goods |
| Luxury Tax | Tax on luxury hotels and similar services |
| Entry Tax / Octroi | Tax on entry of goods into a state or local area |
| Entertainment and Amusement Tax | Tax on cinema, amusement, and entertainment except local body levies |
| Taxes on Advertisements | State-level tax on advertisements |
| Purchase Tax | Tax on purchase of certain goods in some states |
| Taxes on Lotteries, Betting, and Gambling | State taxes on these activities |
| State cesses and surcharges related to supply of goods and services | Additional state levies linked to taxable goods or services |
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Why These Taxes Qualified: The 4 Constitutional Principles
Not every tax could be merged into GST. The taxes that were subsumed had one common feature: they were connected to the supply, sale, manufacture, purchase, or movement of goods and services. The 101st Constitutional Amendment Act, 2016, created the constitutional framework for GST, while Article 279A empowered the GST Council to recommend which taxes, cesses, and surcharges could be subsumed.
The first principle was that the tax had to be indirect. GST was designed to replace taxes charged on goods and services, not taxes on income, property ownership, or legal documents. That is why taxes like income tax , property tax, and stamp duty were not subsumed.
The second principle was that the tax had to be linked to the supply chain. Taxes such as excise duty, VAT, service tax, CST, entry tax, and purchase tax are applied at different points in the movement of goods or delivery of services . Since GST also taxes supply, these taxes naturally qualify for merger.
The third principle was input tax credit compatibility. GST works best when tax paid at one stage can be claimed as a credit at the next stage. Many old taxes either allowed limited credit or created a tax-on-tax impact . Subsuming them helped create a smoother credit chain.
The fourth principle was Centre-State revenue alignment. GST had to balance the taxing powers of both the Union and the States. Earlier, the Centre collected taxes such as excise duty and service tax, while States collected VAT, entry tax, luxury tax, and purchase tax. GST merged these into a shared system through CGST, SGST, and IGST. So, the taxes subsumed under GST were not selected randomly. They were chosen because they fit the constitutional and practical design of a unified goods and services tax system.
Taxes Not Subsumed Under GST
Some taxes continue outside GST because they are not part of the regular goods-and-services supply chain, or because the Constitution and GST Council have kept them separate.
| Tax Not Subsumed | Current Position |
|---|---|
| Basic Customs Duty | Continues on imports under customs law |
| Stamp Duty | Continues on property and document transactions |
| Property Tax | Continues as a local body or municipal tax |
| Electricity Duty | Continues under state laws |
| Road Tax / Motor Vehicle Tax | Continues under state transport laws |
| Toll Tax / User Charges | May continue as infrastructure-use charges |
| Excise Duty and VAT on Alcohol for Human Consumption | Alcohol for human consumption remains outside GST |
| Petroleum Levies on Petrol, Diesel, Crude Oil, Natural Gas, and ATF | GST levy is deferred until the GST Council recommends a date |
| Export Duty | Continues separately on specified exports, where applicable |
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Common Misconceptions About Taxes Subsumed Under GST
“All indirect taxes were removed after GST.”
This is not correct. GST replaced many major indirect taxes, but not all. Basic Customs Duty , stamp duty, electricity duty, road tax, property tax, and alcohol-related state taxes continue to be levied separately.
“Entertainment tax is fully removed.”
State-level entertainment and amusement tax was subsumed under GST. However, entertainment tax levied by local bodies was not subsumed.
“CST and customs duty are the same.”
No. CST was a tax on the interstate sale of goods within India and was subsumed under GST. Customs duty applies to imports and continues to be charged separately.
“Central Excise Duty no longer exists anywhere.”
Central Excise Duty was largely subsumed under GST, but it still applies to specific items such as petroleum products and tobacco products, depending on the applicable law.
Practical Impact on Businesses
For businesses, GST reduced the need to manage separate tax systems like VAT, service tax, CST, and entry tax. A trader who earlier purchased goods from another state had to deal with CST and limited credit availability. Under GST, interstate purchases generally attract IGST, and eligible credit can be used against output tax.
For service providers, the earlier service tax system was replaced by GST. This gave a common tax framework for both goods and services. For manufacturers, GST reduced the earlier disconnect between excise duty and VAT. The input tax credit chain became broader, though businesses still need proper invoice matching , GST return filing, and ITC reconciliation.
For multi-state businesses, GST introduced greater standardization, but it did not eliminate state-wise registration requirements entirely. A business still needs separate GST registration in each state where it has a taxable presence.
Conclusion
The subsumption of taxes under GST was a major reform in India’s indirect tax system. It replaced many central and state taxes, reduced the cascading effect, and created a more unified tax structure for goods and services.
However, GST did not absorb every tax. Basic Customs Duty, stamp duty, electricity duty, property tax, alcohol-related taxes, and some petroleum-related levies still continue outside the regular GST levy. Petroleum products also require careful wording because they are constitutionally included in GST, but GST is not currently levied on them, pending the GST Council's recommendation of a date.
Businesses should also ensure that their accounting system can properly handle GST invoices, input tax credit tracking, return filing data, and reconciliation. Using GST-ready accounting software like BUSY Accounting Software can reduce manual errors and simplify compliance.
