What is GST?
Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It replaced multiple cascading taxes levied by the central and state governments.
GST Implementation Date
GST was implemented in India on July 1, 2017, making it one of the biggest tax reforms in the country.
Types of GST
CGST
Central GST - Collected by Central Government on intra-state supplies
SGST
State GST - Collected by State Government on intra-state supplies
IGST
Integrated GST - Collected on inter-state supplies and imports
UTGST
Union Territory GST - Collected by Union Territories
GST Registration
GST registration is mandatory for businesses meeting certain criteria. Here's what you need to know:
Who Must Register?
- Businesses with turnover exceeding ₹40 lakhs (₹20 lakhs for special states)
- Inter-state suppliers of goods and services
- E-commerce operators and sellers
- Casual taxable persons
- Persons making taxable supply on behalf of others
- Input service distributors
Documents Required
GST Rates & Slabs
GST in India follows a multi-tier tax structure with different rates for different goods and services:
| GST Rate | Examples |
|---|---|
| 0% | Essential items - Milk, fresh vegetables, grains, etc. |
| 5% | Household necessities - Sugar, tea, edible oil, etc. |
| 12% | Processed foods, computers, mobile phones |
| 18% | Most goods and services - Electronics, restaurants, etc. |
| 28% | Luxury items - Cars, air conditioners, tobacco |
GST Returns
GST returns are forms containing details of income and expenses. Here are the main returns:
GSTR-1
Monthly/QuarterlyDetails of outward supplies (sales)
GSTR-3B
MonthlySummary return with tax payment
GSTR-9
AnnualAnnual return consolidating all transactions
Input Tax Credit (ITC)
Input Tax Credit allows you to reduce your GST liability by claiming credit for GST paid on business purchases.
How ITC Works
Conditions for Claiming ITC
- Valid tax invoice from supplier
- Goods/services received
- Supplier has filed GSTR-1
- Payment made within 180 days
E-Way Bill
E-Way Bill is an electronic document required for movement of goods worth more than ₹50,000.
Important
E-Way Bill is mandatory for inter-state movement of goods exceeding ₹50,000. Intra-state limits vary by state.
Composition Scheme
The Composition Scheme is a simplified GST compliance option for small taxpayers.
Eligibility
- Annual turnover up to ₹1.5 crore (₹75 lakhs for special states)
- Not engaged in inter-state supplies
- Not an e-commerce operator
Composition Tax Rates
- Manufacturers: 1% (0.5% CGST + 0.5% SGST)
- Restaurants: 5% (2.5% CGST + 2.5% SGST)
- Other Suppliers: 1% (0.5% CGST + 0.5% SGST)