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Goods and Services Tax (GST) is a destination-based indirect tax introduced on 1 July 2017 that subsumed most central and state indirect taxes. It levies tax at each stage of the supply chain with set rates and allows registered businesses to claim Input Tax Credit (ITC) for tax paid on purchases to avoid cascading taxes.

Registration is required when an entity's aggregate annual turnover exceeds the statutory threshold — generally ₹20 lakh for services and ₹40 lakh for goods for most states, with lower thresholds for special category states — and in certain cases regardless of turnover (e.g., inter-state suppliers, e-commerce operators, casual taxable persons). Check the latest CGST notifications because state-specific and activity-specific exceptions apply.

GST uses several tax slabs — 0%, 5%, 12%, 18% and 28% — with a cess on select luxury or sin items; some goods (like gold, rough diamonds) have special rates. Determine the applicable slab by matching the HSN/SAC code for your supply against the CBIC tariff notifications and recent GST Council rate changes.

ITC lets a GST-registered recipient reduce output tax liability by the tax paid on business purchases provided the supplier has reported the invoice in their GSTR filings, the goods/services are used for taxable supplies, and the recipient has valid tax invoices. Blocked credits (e.g., personal use, certain motor vehicles, membership fees) and timing/reconciliation mismatches are common rejection reasons.

Common returns include monthly GSTR-1 (outward supplies), GSTR-3B (summary monthly tax payment), and annual GSTR-9; composition dealers file GSTR-4 and some taxpayers file quarterly returns. Deadlines vary: GSTR-1 is typically monthly or quarterly depending on turnover, GSTR-3B is monthly, and the annual return is once per financial year — use calendar reminders and automated software to avoid late fees.

E-invoicing requires certain B2B invoice data to be reported in a standardized JSON format to the government's Invoice Registration Portal (IRP) so each invoice receives a unique IRN and QR code. Applicability is by notified aggregate turnover thresholds and supply type; businesses must integrate accounting/billing systems or use APIs/third-party portals to generate compliant e-invoices when mandated.

Exports are zero-rated under GST; exporters can either supply under Letter of Undertaking (LUT) or pay IGST and claim a refund. Refund claims need shipping bills, export invoices, bank realization certificates (if applicable), and reconciliation with GSTR filings; procedural delays are common, so ensure accurate filings and timely submission of supporting documents.

The composition scheme allows small taxpayers with turnover up to ₹1.5 crore (₹75 lakh in special category states) to pay tax at a prescribed low rate on turnover and file simplified returns, but they cannot claim ITC or supply interstate. It suits small retailers and manufacturers with low input tax needs; do a margin/ITC loss comparison before opting.

Under RCM, the recipient — rather than the supplier — is liable to pay GST on specified supplies (e.g., certain notified goods/services, supplies from unregistered persons), and registered recipients can claim ITC subject to conditions. Proper invoice handling, payment of tax, and timely reporting in returns are critical to avoid interest and penalties.

Frequent mistakes include late filing/payment, incorrect HSN/SAC codes, mismatched invoices causing ITC denial, non-issuance of e-invoices when mandated, and failing to maintain supporting documents for refunds. Avoid these by reconciling books monthly, using GST-compliant accounting software, maintaining digital backups of invoices, and subscribing to regulatory update feeds.