Difference GST current tax regime — the taxes subsumed, the new structure across CGST, SGST, and IGST, and the compliance checklist for the transition.
The transition from the previous indirect tax regime to GST is, for a finance head, less an academic question and more a sequence of mapping decisions — which previous taxes get subsumed into CGST, which into SGST or UTGST, which into IGST, and which sit outside the unified structure. The mapping affects how invoices are raised, how purchase records reconcile, how branch-to-branch movement is documented, and how input tax credit flows from procurement through to monthly return filing. The difference between GST and the current tax regime, understood from a compliance perspective, sits in this mapping work — not in the high-level philosophy of "one nation, one tax."
Where the previous regime ran on multiple parallel tax structures levied at different points in the supply chain by different authorities, GST consolidates these into a single unified structure with three components (CGST, SGST or UTGST, and IGST) determined by the place of supply. Understanding which previous-regime tax sits under which GST component is what allows the finance team to map the chart of accounts, configure the tax masters, and avoid GST filing errors and input tax credit mismatches in the first month of operation under the new regime. The sections below walk through the structural change, the taxes subsumed under each GST component, and a compliance checklist for documenting the difference in operational terms. The broader ERP subject area discussion for compliance-led businesses treats this kind of regime-mapping work as the foundation that every subsequent return filing and credit reconciliation rests on.
The structural shift — from multiple parallel taxes to a unified three-component structure
Under the previous regime, indirect taxes were levied at multiple points by multiple authorities. The central government levied excise duty on manufacture, service tax on services, customs duties on imports (including CVD and SAD on imported goods), and various surcharges and cesses. The state governments levied VAT or sales tax on intra-state sale of goods, central sales tax (CST) on inter-state sale, entry tax on movement of goods into a state, octroi or local body taxes, purchase tax, luxury tax, and their own surcharges and cesses. A single supply transaction would attract a stack of these taxes depending on the nature of the goods or services and the route of the transaction.
Under GST, the same supply transaction now attracts one of three tax structures determined by the place of supply. Where the transaction is intra-state — supplier and recipient in the same state — Central GST (CGST) and State GST (SGST) apply in equal proportion, with the CGST share flowing to the central government and the SGST share to the state government. Where the transaction is intra-Union Territory — supplier and recipient within the same Union Territory — Central GST (CGST) and Union Territory GST (UTGST) apply. Where the transaction is inter-state — supplier and recipient in different states — Integrated GST (IGST) applies, with the revenue subsequently shared between the central government and the destination state. Imports also fall under IGST. The result is one tax computation per supply transaction, with the head determined by place of supply rather than by the nature of the underlying activity.
When and why to use this transition mapping checklist
The mapping checklist below applies to operations preparing for the GST transition, restructuring tax masters after a registration change, or onboarding new finance staff who need to understand how the previous tax regime relates to the current GST structure. Each item names a specific tax category along with how it maps into CGST, SGST/UTGST, or IGST under GST. The accountant uses this mapping to convert the chart of accounts and tax masters; the finance head signs off the mapping before any post-transition invoice is raised.
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The items below are grouped under three categories — central taxes subsumed into CGST, state and union territory taxes subsumed into SGST or UTGST, and taxes subsumed into IGST. A separate set of items covers structural mapping decisions the finance team has to sign off.
Central taxes subsumed into CGST
Map central excise duty into CGST.
Central excise duty was levied on manufacture of goods under the previous regime; under GST, the equivalent component on intra-state supplies of goods is collected as CGST. Manufacturers who previously paid excise duty at the time of removal from the factory now pay CGST at the time of supply, with the value at the place of supply being the basis. The chart of accounts is restructured to retire the excise duty heads and route the equivalent collection into the CGST output liability ledger.
Map service tax into CGST.
Service tax levied on taxable services under the previous regime now flows into CGST and SGST or UTGST for intra-state supplies of services, and into IGST for inter-state supplies. Service providers configure place-of-supply rules to determine whether the transaction is intra-state or inter-state — a service rendered from a Mumbai office to a Mumbai-based recipient attracts CGST and SGST, while the same service to a Bangalore-based recipient attracts IGST. The previous service tax ledger is retired in the post-transition chart of accounts.
Map ADE, CVD, SAD, and central surcharges and cess into CGST or IGST.
Additional Duty of Excise (ADE), Countervailing Duty (CVD), Special Additional Duty (SAD) on imports, and central surcharges and cess that were levied under the previous central tax structure are absorbed into CGST for intra-state supplies and into IGST for inter-state supplies and imports. The accountant reconciles each subsumed head against the new GST ledger; the finance head signs off the migration of opening balances.
State and union territory taxes subsumed into SGST or UTGST
Map state VAT into SGST or UTGST.
State VAT levied on intra-state sale of goods under the previous regime is subsumed into SGST for state-based operations and into UTGST for operations in Union Territories. VAT input credit balances at the date of transition are addressed through the transitional credit provisions and require specific documentation. The finance head signs off the closing VAT balance against the carry-forward into the GST regime.
Map purchase tax, luxury tax, entry tax, and local levies into SGST or UTGST.
Purchase tax (levied on purchase of specified goods), luxury tax (levied on luxury services and goods in specified states), entry tax (levied on movement of goods into a state), octroi or local body taxes, and state-level surcharges and cesses are subsumed into SGST or UTGST. The transition retires these as separate tax heads and routes the equivalent collection through the unified state-component ledger.
Taxes subsumed into IGST
Map central sales tax into IGST.
Central Sales Tax (CST) levied on inter-state sale of goods under the previous regime is subsumed into IGST. Operations supplying inter-state previously paid CST at concessional or full rates depending on the buyer's status (registered against C-form, unregistered, etc.); under GST, the same transaction attracts IGST at the applicable rate with no concessional-form mechanism. The finance head signs off the IGST mapping against the previous CST customer base before the first post-transition inter-state invoice.
Map CVD and SAD on imports into IGST.
Countervailing Duty (CVD) and Special Additional Duty (SAD) on imports under the previous regime are subsumed into IGST on imports. The basic customs duty continues separately under the customs framework. The accountant reconciles each import transaction in the previous regime against the IGST treatment under GST to validate the mapping; the finance head signs off the IGST configuration on the customs and imports module before the first post-transition import.
Structural mapping decisions
Configure place-of-supply rules to determine CGST/SGST versus IGST.
The single most important configuration decision under the new structure is determining the correct place-of-supply for every supply transaction. Place-of-supply rules under the GST law determine whether CGST plus SGST/UTGST applies (same-state transaction) or IGST applies (inter-state transaction). The customer master is configured with the correct billing-to and ship-to states; the sales head signs off the customer master before invoicing begins. Misclassifications produce wrong tax treatment that has to be corrected through credit-note workflow.
Configure HSN/SAC codes against every active item and service master.
The previous regime relied on commodity codes for excise duty and specified service categories for service tax. Under GST, every item is mapped to an HSN code and every service to a SAC code, with the applicable GST rate slab attached (0%, 5%, 12%, 18%, or 28% with cess where applicable). HSN code length depends on annual turnover under the prescribed rules. The stores head signs off the HSN audit on item masters; the finance head signs off the rate-slab mapping. Where deeper period-over-period reporting matters, BI for ERP reporting holds the multi-period view of GST output composition across rate slabs.
Carry forward input tax credit balances under the transitional provisions.
Closing balances of central VAT input credit (CENVAT), state VAT input credit, and other eligible credits at the date of transition are carried forward into the GST regime under the transitional provisions of the GST law, subject to specific documentation requirements. The accountant computes the closing credit balance head-by-head and the carry-forward amount; the finance head signs off the transition credit before the first GST return is filed. Where statutory payroll also forms part of the operational picture, HRMS for payroll and HR integration holds the same kind of transition discipline for statutory deductions that change in cadence under the new regime.
Restructure the chart of accounts to retire the previous tax heads.
The chart of accounts under the previous regime carried separate ledgers for excise duty, service tax, CVD, SAD, VAT, CST, entry tax, purchase tax, luxury tax, and the corresponding input credit heads. Under GST, these ledgers are restructured into output and input credit heads for CGST, SGST/UTGST, and IGST. Previous-regime ledgers are retired (not deleted — they hold historical data); new GST ledgers are created against the configured chart. The finance head signs off the restructured chart before the first GST-period transaction.
Reconcile the first three months of GST returns against the previous-regime equivalent.
The first three monthly GST return cycles produce reconciliation opportunities against the previous-regime equivalent — what would have been the excise plus VAT plus CST liability for the same transaction mix versus the actual CGST plus SGST plus IGST under GST. Material variances are investigated for mapping or rate-slab errors. The accountant prepares the reconciliation; the finance head reviews against the post-transition operational expectation set at the assessment stage. This is the discipline that surfaces mapping errors early enough to be corrected before they compound into the next quarter.
How exactllyERP supports the regime difference and transition
The mapping work outlined above sits in the foundational configuration of the post-transition tax engine — and once set correctly, it runs each transaction automatically against the new GST structure. exactllyERP eliminates GST filing errors and input tax credit mismatches by configuring the HSN/SAC mapping at item and service master, the place-of-supply rules at customer master, the validated GSTIN at vendor master, and the restructured chart of accounts with CGST, SGST/UTGST, and IGST ledgers replacing the retired previous-regime heads. The output composition under each GST head flows automatically from the supply transaction; the input tax credit register pulls from the validated purchase register against GSTR-2B reconciliation.
How exactllyERP handles this automatically: items 8 (place-of-supply logic at invoice posting), 9 (HSN/SAC mapping at item and service master), and 12 (monthly reconciliation against expected GST liability) are the three places where regime-transition discipline translates into ongoing compliance accuracy. GST council changes to rate slabs, HSN classifications, and statutory return formats are absorbed through configured updates rather than custom rebuilds. The audit trail captures each transaction from the source supply through to the GSTR-1, GSTR-3B, and GSTR-2B entries, which is what makes the statutory audit a documentation exercise rather than a reconstruction project. exactllyERP handles incorrect GSTR filing and HSN code mapping errors automatically through the configured rate-slab logic at the item master. See it live in a free demo against your previous-regime closing balances and a sample post-transition invoice cycle.
