GST (Goods and Services Tax) is India's unified indirect tax system, implemented on July 1, 2017. It replaced multiple cascading taxes (excise, VAT, service tax) with a single tax system.
GST Rate Slabs
- 0%: Essential goods (milk, fresh vegetables, grains)
- 5%: Basic necessities (packaged food, footwear under ₹1,000)
- 12%: Standard goods (butter, mobile phones)
- 18%: Most services (IT services, restaurants)
- 28%: Luxury/sin goods (cars, tobacco, aerated drinks)
Components
On intra-state sales: CGST + SGST. On inter-state sales: IGST. Input tax credit allows businesses to deduct tax paid on purchases.
GST Registration Threshold
Businesses with annual turnover above ₹40 lakh (₹20 lakh for special category states) for goods, or ₹20 lakh (₹10 lakh for special category states) for services, must register for GST. Voluntary registration below the threshold is allowed and can be useful for claiming input tax credit.
GST Returns
Registered businesses file periodic returns (GSTR-1 for outward supplies, GSTR-3B as a summary return) — monthly or quarterly depending on turnover under the QRMP scheme. Late filing attracts a late fee plus interest on any tax due.