Dual GST model establishes concurrent CGST/SGST with input tax credit and IGST for inter state supplies.
GST is a value addition tax permitting continuous input tax credit from producer/service provider to retailer so the final consumer bears only the last stage tax. The architecture is a dual GST-CGST and SGST-levied concurrently on the same transaction value, with credits generally usable only within each component. Inter State supplies use an IGST model levied by the Centre to preserve cross State input tax credits and avoid tax blockage. Specific Central and State levies are proposed for subsumption, certain items remain outside GST, and constitutional amendment is required for implementation.

Dual GST framework: separate central and state components with IGST for inter state supplies to preserve input tax credits.
The Paper proposes a dual GST with separate Central and State components, distinct ITC pools, and uniform core features; an IGST levied by the Centre on inter State supplies to preserve uninterrupted ITC and avoid cash blockage; subsumption of specified Central and State indirect levies while excluding certain items (notably alcoholic beverages and specified petroleum products); a two rate plus special and exempted item structure with zero rating of exports; uniform thresholds and a composition scheme for small taxpayers; and necessary constitutional amendments, central and State legislation, IT infrastructure and a time bound compensation mechanism for States during transition.

Goods and Services Tax design promotes destination-based unified taxation with seamless input credit and harmonised state-centre procedures.
The speech sets out the proposed architecture for a national Goods and Services Tax, diagnosing the current fragmented indirect tax regime and specifying design conditions: aligned exemption lists, moderate combined Central and State rates, uniform State treatment, destination-based taxation, a seamless input credit chain across intra- and inter-state supplies, similar tax treatment for goods and services, export neutrality, and simplified harmonised procedures, together with administrative reforms including enhanced taxpayer services and a robust IT infrastructure to support compliance and data exchange.