GST FAQ

GST (Goods and Services Tax) is a single indirect tax that replaced multiple central and state taxes like VAT, service tax, and excise duty in India since July 2017. It is levied on the supply of goods and services and is collected at every stage of the supply chain, with credit for taxes paid at earlier stages available via Input Tax Credit. Use our Standard GST Calculator to see it in action.

India has a federal structure, so GST revenue is split between the Centre and States. For sales within a state (intra-state), CGST and SGST are charged equally, each going to the Centre and the respective State. For sales between states (inter-state), IGST is charged and later apportioned between the Centre and destination State. Read our detailed guide on CGST, SGST and IGST.

Under GST 2.0, effective September 22, 2025, India has four slabs: 0% (exempt items), 5% (essentials), 18% (standard rate for most goods/services), and 40% (luxury and sin goods). The earlier 12% and 28% slabs have been abolished. See the full GST Slabs reference.

The 56th GST Council meeting restructured the slab system by merging the 12% and 28% slabs into a simplified 0/5/18/40 structure. Most goods previously at 12% moved to 5% or 18%, while luxury/sin goods previously at 28% moved to 40%. This simplifies compliance and reduces classification disputes.

No. Certain goods (petrol, diesel, alcohol for human consumption) remain outside GST and are taxed under state VAT/excise. Essential items like fresh food, healthcare, and education are exempt (0%) under GST itself.

Exempt supplies (like healthcare) have no GST and no ITC can be claimed on inputs used for them. Zero-rated supplies (like exports) also have no GST charged, but ITC on inputs CAN be claimed as refund — making zero-rating more favourable for exporters. Try our Export GST Calculator.

Any business supplying goods with annual turnover above ₹40 lakh (₹20 lakh for special category states) or services above ₹20 lakh (₹10 lakh for special category states) must register. E-commerce sellers must register regardless of turnover.

For goods, the threshold is ₹40 lakh annual turnover (₹20 lakh in special category states). For services, it is ₹20 lakh (₹10 lakh in special category states). Businesses below these limits may still register voluntarily to claim ITC.

Voluntary registration lets you claim Input Tax Credit on purchases and makes your business appear more credible to B2B clients who need GST invoices for their own ITC claims. It's common among freelancers working with corporate clients.

A GSTIN is a 15-character code: 2 digits state code, 10-character PAN, 1 entity code, 1 default 'Z', and 1 checksum digit. Use our free GSTIN Validator which checks format and Mod-36 checksum entirely offline.

The Composition Scheme lets small businesses (turnover up to ₹1.5 crore) pay GST at a flat, lower rate (1% traders, 5% restaurants, 6% service providers) instead of standard slab rates, with simplified quarterly filing (CMP-08). However, they cannot claim ITC or issue tax invoices. Try the Composition Calculator.

Yes, registration can be cancelled voluntarily if turnover falls below the threshold or the business closes, via the GST portal. All pending returns must be filed and a final return (GSTR-10) submitted after cancellation.

GSTR-1 is a monthly/quarterly return reporting outward supplies (sales). It is due on the 11th of the following month for monthly filers. Track deadlines live on our homepage widget.

GSTR-3B is a self-declared summary return of sales, purchases, ITC claimed and tax paid, filed monthly by the 20th. It is the primary return used to actually pay GST liability.

GSTR-9 is the annual return consolidating all monthly/quarterly filings for the financial year, due by December 31 following the year-end. It is mandatory for regular taxpayers above a turnover threshold.

Late filing attracts a late fee of ₹50/day (₹20/day for nil returns), capped at ₹10,000, plus 18% per annum interest on the tax amount due. Use our Penalty Calculator to estimate your exact liability.

CMP-08 is a quarterly statement-cum-challan filed by Composition Scheme taxpayers to pay their tax liability, due on the 18th of the month following each quarter.

GST returns cannot be revised once filed. Corrections are made by adjusting figures in a subsequent period's return rather than amending the original filing.