What is GST?
Goods and Services Tax (GST) is India’s value-added tax on most goods and services. It replaced multiple indirect taxes like VAT, Service Tax, Excise Duty, and CST with a single, destination-based tax.
Why GST was introduced
- One nation, one tax — simplified compliance
- Reduces tax cascading (tax on tax)
- Seamless input tax credit (ITC)
- Uniformity across states
GST structure
- Central GST (CGST) — levied by the Centre on intra-state supplies
- State/UT GST (SGST/UTGST) — levied by the State/UT on intra-state supplies
- Integrated GST (IGST) — levied by the Centre on inter-state supplies, imports/exports adjustments
Input Tax Credit
Businesses can set off GST paid on purchases (ITC) against GST payable on sales, subject to conditions and as per GSTR‑2B.
GST rates (common slabs)
| Slab | Examples |
|---|---|
| 0% | Essential items (few), exports (zero-rated) |
| 5% | Some food items, essential services |
| 12% | Processed foods, certain goods/services |
| 18% | Most goods/services |
| 28% | Luxury/sin goods (plus cess for some) |
Note: Rates change via GST Council decisions. Always verify current rates.
Who should register?
- Aggregate turnover above threshold (commonly ₹20 lakh; ₹10 lakh in special category states; ₹40 lakh for goods in some states, subject to conditions)
- Inter-state taxable supplies of services/goods (subject to exemptions)
- E-commerce operators and certain notified categories (TDS/TCS, ISD, NRTP, OIDAR)
Key compliances at a glance
- GSTR‑1: Details of outward supplies (monthly/QRMP)
- GSTR‑3B: Summary return with tax payment (monthly/QRMP)
- E‑invoicing: Mandatory for businesses above notified turnover (≥ ₹5 crore as of Aug 2023)
- E‑way bill: Required for movement of goods above thresholds
Registration steps
Step 1: Check eligibility
Review thresholds and category-specific rules (e.g., e‑commerce, NRTP).
Step 2: Gather documents
PAN, Aadhaar (authorized signatory), business proof, bank details, address proof.
Step 3: Apply on GST portal
Use www.gst.gov.in — fill Part A (basic details), Part B (attachments), and verify with OTP/DSC.
Step 4: ARN & GSTIN
Track Application Reference Number; upon approval, receive GSTIN and login credentials.
Simple example
A trader buys goods for ₹1,00,000 plus 18% GST (₹18,000). He sells for ₹1,50,000 plus 18% GST (₹27,000). Net tax to pay = Output ₹27,000 – ITC ₹18,000 = ₹9,000.
Common mistakes to avoid
- Claiming ITC beyond what appears in GSTR‑2B
- Missing reverse charge (RCM) liabilities
- Wrong place of supply (IGST vs CGST/SGST)
- Late filing leading to late fee and interest
References
- CGST/SGST Acts and Rules (cbic-gst.gov.in)
- GST Portal user manuals (www.gst.gov.in)
- GST Council press releases for rate changes
This article is a beginner’s overview. For specific cases, consult a GST professional and the latest CBIC notifications.