Introduction
Concerning tax reforms since Indian independence, GST must be considered among the greatest. Targeted after its introduction in the year 2017, GST replaced many indirect taxes. This had the advantage of procuring a simplified taxation structure and rendering tax compliance easier for the industry. In this blog, we have answered a few of the frequently asked questions related to GST for individuals, startup companies, and small businesses.
FAQs
1. What does GST mean?
The Goods and Services Tax is an all-India indirect tax levied as one single comprehensive tax on the manufacture, sale, and consumption of goods and services that have in earlier times been subjected to many indirect taxes being levied by the Central Government and respective State Governments, like VAT, service tax, etc. GST is an indirect tax that can be defined as a multi-stage, ultimately borne by the consumer. It is a tax on consumption and follows a destination principle, under which the revenue accrues to the state where the goods or services are consumed. It may thus lead to increased transparency and a reduction in the cascading effects of taxes.
2. What is a GST number, and how to check it?
GST number or the GSTIN (Goods and Services Tax Identification Number) is a 15-digit code issued to each taxpayer registered under GST. This number comprises a code for the state, PAN, and some miscellaneous codes. To check the GSTIN, one has to go to the GST portal, click on 'Search Taxpayer', and enter the GSTIN or the business name. The portal then shows details about the registration status and business profile.
3. How many types of GST are present?
There are four types of GST applicable in India:
- Central GST- CGST is levied by the Central Government on intra-state transactions along with SGST.
- State GST - SGST: The state government collects for the sale of goods within the state. So, an interstate sale is not permitted.
- Integrated GST- IGST: For inter-state transactions, IGST is levied.
- Union Territory GST- UTGST: It shall be levied in Union Territories.
4. When was GST introduced in India?
Being one of the most comprehensive reforms in the Indian tax structure, GST came into existence on July 1, 2017. The doctrine of one tax, one nation superseded the framework of indirect taxes, which was cumbersome. There was a midnight special session in the Parliament for legislating the commencement of GST. GST was meant to make tax collection extremely easy and work towards a common market.
5. What is the GST rate in India?
The GST can be levied under various rates for goods and services. It is generally classified under five rate slabs: 0%, 5%, 12%, 18%, and 28%. Items necessary for daily use, such as fresh fruits, are taxed less, whereas luxuries are taxed at 28% and a cess. The GST Council reviews the rates from time to time and adjusts them as per economic conditions.
6. How many GST slabs are there in India?
India currently has five GST slabs:
- 0% – essential goods like milk, vegetables
- 5% – edible oils, tea
- 12% – processed foods, computers
- 18% – soaps, smartphones
- 28% – luxury goods, automobiles
This structure ensures essential items are taxed minimally while luxuries are taxed more heavily.
7. How is GST calculated?
A little arithmetic in percentages on the transaction cost during the sale and purchase of any goods or services is done to arrive at GST. Suppose an article of Rs 1000 carries a GST @ 18% on it. In that case, it means Rs. 180 is charged by way of GST for which Rs. 1000 balance needs to be collected in payment, making it a total of Rs. 1,180. Thus, CGST and SGST should be charged on intra-state sales, while IGST should be charged on inter-state sales. There are many online calculators for doing so. Also read: GST Calculator in India
8. What are the GST Act and Rules?
The GST Act is a collection of laws defining the implementation of GST in India. They include the CGST Act, SGST or UTGST Act, and IGST Act, defining registration, submission of returns, payment mechanisms, audits, penalties, etc., under GST. The rules laid down by the GST Council from time to time help in promoting better compliance and smoother working of the ICT mechanism under the GST regime.
9. What is a place of supply in GST?
The place of supply determines the levy of CGST/SGST or IGST. As far as goods are concerned, the place of supply is largely the place where the goods are delivered. In the case of services, the rule of supply is based on the location of the recipient. The IGST shall be levied where state boundaries are crossed, otherwise, CGST and SGST will be levied. Keeping this in view, fixation of the place of supply is very important in the proper filing of tax.
10. Who bears the burden of GST?
The tax gets triggered at all stages in the supply chain; however, the last incidence of tax falls on the consumer. The credit mechanism allows the business to set off GST charged to them in the form of input tax credit against output GST, thereby lowering their tax liability. Therefore, credit for tax paid flows through the entire value chain, with the consumer finally paying the tax.
11. Which tax does the GST subsume?
Many indirect taxes at the central and state levels were merged under GST, such as:
- Central Excise Duty
- Service Tax
- VAT
- CST
- Octroi and Entry Tax
- Entertainment Tax (non-local bodies)
- Luxury Tax
Such an exercise of simplification would have abruptly removed numerous stages of taxation and complicated compliance.
12. What are the exempted items under GST?
Some items, goods, and services are kept out of GST to keep the cost of essential goods low: fresh fruits and vegetables, milk, curd, education, healthcare, and agricultural services. A person solely dealing with exempt goods/services shall not be required to register under GST. This list is under continuous amendment by the GST Council.
Go to the GST portal, click "New Registration," and give all of the information it asks for. Such information will include PAN, Aadhaar, proof of business, proof of bank account, and any other contact particulars. Once the applicant submits all required documents and they are duly verified, the GSTIN certificate will be issued to the applicant. The registration is free of cost and is mandated if one crosses the set threshold limit.
14. Can I register multiple businesses under one GSTIN?
No, different nature of business or businesses located in two different states must obtain their own GSTIN; however, a business with verticals in one state may voluntarily apply for a separate GSTIN, which helps them track and report efficiently and comply with tax matters at the operational level.
15. Do e-commerce suppliers pay GST?
Yes. E-commerce sellers must compulsorily register under GST irrespective of their turnover if they do business through marketplaces like Amazon, Flipkart, etc. They have to file monthly and annual returns. The e-commerce operators will also have some GST compliance regarding the TCS (Tax Collected at Source).
16. What are the various forms of returns on GST?
The various GST return forms are:
- GSTR-1: Outward supplies
- GSTR-2A/2B: Auto-drafted inward supplies
- GSTR-3B: Monthly summary return
- GSTR-4: For composition scheme dealers
- GSTR-9: Annual return
Filing them on time ensures ITC claim and tax compliance. Also read: Types of GST Returns: and Filing with Due Dates of Returns
17. When is the GST filing return due?
The due date is linked to the type of return:
- GSTR-1: 11th of the next month
- GSTR-3B: 20th of the next month
- GSTR-4: 30th April (annual returns in case of composition dealers)
Late filing attracts penalties and interest. So it is best to strictly follow a GST calendar as present on the GST portal.
18. How does GST benefit small businesses?
GST simplifies tax compliance by unifying various taxes and reducing their complexities. Small businesses also have a Composition Scheme option with low rates and minimal compliance. Input tax credit works to reduce their costs, and a single national registration allows them a wider market. GST boosts transparent business practices in the country.
19. As a small business owner, do I require accounting software for the GST filing?
While not required, accounting software can greatly ease the GST compliance process by generating invoices, filing returns, calculating taxes, and reconciling accounts, almost automatically. It reduces the chances of errors; moreover, it is the best time to install GST-compliant accounting software, already geared for small businesses with regular updates.
20. What is GST software?
The GST Software is any software that carries out billing and return filing tasks for GST. Such software comes in handy, especially for SMEs and professionals. Tally, Zoho Books, and ClearTax are a few names in this market. Some are free or cloud-enabled, providing access on the Wix domain and real-time government updates.
21. How to download the GST certificate?
To download your GST Certificate: Log in to the GST portal Navigate to "Services" > "User Services". Click on "View/Download Certificate." Click on the Download button next to your GSTIN. You will get a registration certificate in PDF format containing the GST details.
22. How to get a GST Number?
To get a GST Number (GSTIN), register online at www.gst.gov.in. Fill in the personal and business details, upload the required documents, and submit your application for verification. After the application gets approved, the authorities shall send the 15-digit GSTIN to the registered e-mail address. Any business that exceeds the threshold limit or undertakes interstate trade is required to register.
Calculating GST involves the application of the formula: GST Amount=(Original Cost×GST Rate)÷100 Total Cost=Original Cost+GST Amount Explanation: Let's say that a product's price is ₹1,000, and the GST to be levied is 18%. The GST levied would be ₹180, thereby increasing the price of the product to ₹1,180. Online GST calculators will also help out here.
24. How to check the GST number?
Visit the GST portal and provide either the GSTIN or the business name in the "Search Taxpayer" box. The system now displays the business name, type, registration status, and address to discover the legal status of the business, which then becomes crucial in the execution of trade billing.
26. How to apply for a GST number?
The following is the procedure for obtaining a GST number:
- Go to www.gst.gov.in
- Click on the "New Registration" tab.
- Fill in the details of the business and promoter.
- Attach PAN, Aadhaar, address proof, and bank details.
- Click on submit and verify through OTP.
- Then the department processes and issues the GSTIN.
27. How to file the GST return?
Log in to the GST portal, go to the 'Return Dashboard' and select the return you want to file, e.g., GSTR-1 or GSTR-3 B. Enter the invoice details. The data may be uploaded as JSON or entered manually. After reviewing, submit the return with payment of taxes, if any, and verification by DSC/OTP. Software for GST return filings may also be used if convenient.
28. What is ITC in GST?
Input Tax Credit (ITC) is a mechanism whereby a GST-registered business or manufacturer can charge the GST payable on sale with the tax it has paid on purchase. In other words, suppose GST of ₹500 has been paid on the purchase of raw materials and ₹800 GST has been collected on sale; then only ₹300 has to be paid by the business to the Government. It prevents tax cascading and thus decreases the tax burden.
29. What is RCM in GST?
The reverse charge system, also called RCM, is a system where the GST is paid by the recipient instead of the supplier. This happens in certain cases under imports of services and purchases from unregistered suppliers. Under RCM, the reverse charge GST is paid by the recipient directly to the government, and later becomes eligible for claiming input tax credit.
30. How much is GST on gold?
It is 3% of the value of gold. When charges are paid, GST of 5% is levied on the making charges. So, the entire GST will vary slightly depending on how the invoice is divided.
31. How to register for GST?
Visit www.gst.gov.in, click 'Register Now', and fill in Part A with basic details such as PAN, mobile number, and email. In Part B, furnish business-related details and documents like PAN, Aadhaar, proof of address, and bank account information. Once verified, your GST number will be issued within 7-10 days.
32. How to calculate the percentage of GST?
The formula to calculate GST is: GST Amount = (Original Amount × GST Rate) ÷ 100. For example, when an item's cost is ₹1,000 and the GST rate is 18%, it becomes ₹180. Hence, the final price would be ₹1,180. There is also an option to reverse calculate GST, in case the MRP has GST included in it.
33. How to cancel GST registration?
For cancellation of your registration under GST, please log in to the portal, move to Services > Registration > Application for Cancellation. Fill in your reason, stocks, and liabilities, and submit. Your officer will vindicate and issue a cancellation order. Note: File your pending returns before cancellation.
34. How to check GST status?
Go to www.gst.gov.in, click on 'Services > Registration > Track Application Status'. Enter your ARN (Application Reference Number) or GSTIN, and keep a check on the status of your registration or return. You may also check the refund and return processing status from the dashboard.
35. What is the Composition Scheme in GST?
The Composition Scheme is meant for small concerns whose annual turnover is up to ₹1.5 crore. Such registered persons pay a fixed low rate of GST, say 1 or 5%, and file simplified quarterly returns. However, they cannot claim input tax credit nor issue GST invoices themselves. It is fit for small retailers, traders, and eateries.
36. What is a GST return?
A GST return is a document filed by a taxpayer containing details about sales, purchases, tax collected, and tax paid. Depending upon the nature of business, forms like GSTR-1, GSTR-3B, and GSTR-9 are filed. Return filing in time means compliance with tax and claiming input credit.
37. What kind of tax is GST?
Being a destination-based indirect tax, GST is levied on consumption, i.e., the tax goes to the state where goods or services are consumed. It is imposed on every step of sale or purchase along the supply chain, with full credit being available for tax paid earlier.
38. How to calculate GST on MRP?
If MRP is GST-inclusive, use this formula: GST = (MRP × GST Rate) / (100 + GST Rate) For example, MRP = ₹1180, GST rate = 18%, then GST = ₹180. This helps you separate GST from a price that already includes it.
39. How to deduct TDS on GST bill example?
If you are supposed to deduct TDS (like government departments), deduct 2% (1% CGST + 1% SGST) on the taxable value, not on the GST amount. Example: Invoice = 10,000 + 1,800 GST → Deduct TDS on 10,000 = 200. Deposit TDS with the government and file GSTR-7.
40. How to file GST?
Log in to the GST portal, select the appropriate return (GSTR-1 for sales, GSTR-3B for summary), fill in data/upload through software, verify, and submit. After the submission of the return, if there is a payment, make it, and file it with either OTP/DSC. The last filing date is to be respected to avoid late fees.
46. What is cess in GST?
Cess is an additional levy on some of the luxurious and sin goods, like tobacco, coal, and high-end cars. It is levied over and above GST as compensation to states for revenue lost due to the implementation of GST. Then these moneys are diverted to the Compensation Fund.
41. What is the GST Council?
It is the principal decision-making authority on GST matters. It consists of the Union Finance Minister (Chairperson) and the state finance ministers. It sets the rates of tax, rules, and exemptions, and regularly meets to update these.
42. How does GST work?
GST works on every supply chain, with the taxation starting with the manufacturer and ending with the retailer of goods and services to any customer. This means businesses collect GST at whatever rate applicable and then pay it to the government after claiming credit for the GST paid on purchases. The ground tax is borne by the consumer.
43. How many digits are in the GST number?
A GSTIN will consist of 15 digits: The first 2 digits: State code Next 10 digits: PAN 13th digit: Entity code 14th Blank (by default 'Z') 15th: Checksum digit for validation
44. How to add a GST number in Amazon?
Log in to your Amazon Seller Central account. Go to Settings > Tax Settings, click Add GST Details, enter your GSTIN, legal business name, and address. If documents are required, submit them and wait for verification to complete. Once added, Amazon will generate invoices in compliance with GST.
45. How to become a GST inspector?
One can become a GST Inspector by clearing the SSC CGL exam, which is conducted by the Staff Selection Commission. After the selection, one is assigned a post in the Central Board of Indirect Taxes and Customs (CBIC). The work pertains to audits, investigations, and enforcement.
46. How to calculate the GST amount?
Use this formula: GST Amount = (Original Cost × GST Rate) / 100 For example, for a ₹500 item at 18% GST: GST = ₹90. So, Total = ₹590. Use online calculators or software for bulk calculations. Read more: GST Calculation.
47. How to change the email ID in the GST portal?
Log in to the GST portal and under the path of ‘Services > Registration > Amendment of Core Fields’, select the 'Email ID' field, update your new email, submit the form with OTP verification, and upon approval, the new email will be updated in the records of the portal.
48. How to claim my GST refund?
You may claim a GST refund by filing Form RFD-01 on the GST portal. Common instances include excess tax being paid, exports of goods/services, inverted duty structure, or final return after cancellation. Relevant supporting documents and bank details must be provided. Refunds are typically issued within thirty days.
49. How to get GST registration?
Go to the GST portal www.gst.gov.in, click on "New Registration" to fill in details like PAN, mobile number, and email ID. After an OTP verification, fill in the Part-B form with business and bank details. Upload supporting documents and submit your application. An ARN will be provided against which the application can be tracked. Upon account approval, one will be issued a GSTIN.
50. How to pay GST online?
After logging into the GST portal, go to ‘Services’ > ‘Payments’ > ‘Create Challan’. Enter tax details and select a mode of payment under Net Banking, NEFT/RTGS, or Over the Counter, er and generate the challan. Conduct payment to get the receipt and acknowledgment.
51. How to Sell on Meesho Without GST?
Meesho allows the sellers to register without a GST number for unstitched, non-branded items under a certain threshold of turnover. For branded items or turnover exceeding ₹40 lakhs (₹20 lakhs for some states), however, the GST registration is a must.
52. What is GST on Gold?
GST on gold is 3% of the value of the gold charged, in addition to 5% GST on making charges, if they are invoiced separately. In case something is bought as jewelry, the GST situation may differ for the entire bill put together (gold plus making), depending on the terms of invoicing.
53. What is LUT in GST?
LUT (Letter of Undertaking) is a document that allows an exporter to provide goods or services for shipment without payment of IGST. It is filed online through Form GST RFD-11 on the GST portal. It applies to people not facing any criminal proceedings under GST laws.
54. What is reverse charge in GST?
Under the Reverse Charge Mechanism (RCM), GST is paid directly to the government by the recipient rather than the supplier. It is levied on certain notified goods and services, and in cases where the unregistered supplier supplies to a registered person.
55. Who introduced the GST in India?
The GST was introduced in India by the Government of India, led by the then Finance Minister Arun Jaitley. It was passed in 2016 and was implemented on 1 July 2018 to subsume indirect taxes.
56. How to add a place of business in GST?
Log in to the GST portal, click on ‘Amendment of Registration- Non-core fields’, select ‘Additional Place of Business,’ and click on ‘Add.’ Then enter the required address details, upload documents, and submit. The same will be approved after verification.
57. How to change the address on the GST portal?
One needs to log into the GST portal, then navigate to Services > Registration > Amendment of Registration. Once the type of address has been selected (principal or additional), the new address is to be entered, a proof has to be uploaded (utility bill, rent agreement, etc., depending on the type of address chosen), and submitted for approval.
58. How to change the mobile number on the other GST portal?
To get your number changed on the GST portal, you would be required to log in to the GST portal and under 'Services', select 'Amendment of Registration'. Now update the changed details on the screen under either section 'Promoter/Partnersorof 'Authorized Signatory' and submit for verification after OTP is generated.
59. How to get a GST certificate downloaded?
Log in to the GST portal. Under Services, go to User Services, and then select the View/Download Certificate option, where you will see a small icon to click and download the official GST registration certificate as a PDF.
60. How to get the GST number for a business?
Apply online through the GST portal, providing the business PAN, contact details, and address. Submit the required documents such as proof of address, bank account details, and a photograph of the proprietor or business partners. Once everything is verified, a unique 15-digit GSTIN is allotted.
61. How to get to GST registration?
To register for GST, go to www.gst.gov.in, click "Register Now", and fill in both Part A and Part B of the registration form. Upload the relevant documents and submit the form. Upon approval, the registration number will be issued.
62. What are the correct GST slabs on goods and services?
GST is charged in four main slabs, which are 5%, 12%, 18%, and 28%. Essential items like food are taxed at 0% or 5%, whereas normal goods and services are taxed at 12% or 18%, and items of luxury or sin goods at 28%. Certain items attract additional cess.
63. What is 9C in GST?
Form GSTR-9C is a reconciliation statement wherein taxpayers having a turnover of ₹5 crore reconcile the annual returns with the audited financial statements and are required to be certified by a Chartered Accountant.
64. What is the GST composition scheme?
This scheme is in place for small businesses having a turnover up to ₹1.5 crore(₹75 lakh in case of some states). They pay taxes at a very low rate (1% for traders and 5% for restaurants) and are required to submit quarterly returns without claiming ITC.
65. What ia s GST invoice?
A GST invoice is a bill issued by a registered supplier, including details like invoice number, GSTIN, date, buyer details, item description, HSN code, tax rate, and the amount charged. It is used for claiming input tax credit or sales return and other such processes for compliance.
66. What is an HSN code in GST?
HSN or Harmonisation System of Nomenclature is a numeric classification system for goods under the GST. This was created in a uniform manner for taxation, compulsory to be mentioned on the invoice depending upon the turnover of a business.
67. When did GST start in India?
The Bill of the GST Act, having received the President’s approval, came into effect on the 1st of July, 2017, making GST the only indirect tax, as other contemporary Central taxes were VAT, Service Tax Excise Laws at the Central and the State level.
68. Who is the Chairman of the GST Council?
The Union Finance Minister is the Chairperson, ex officio, of the GST Council. Presently, this post is held by Mrs. Nirmala Sitharaman.
69. How to add a bank account in the GST portal?
GST Portal>Login>Services>Registration>Amendment of Registration (Non-core Fields). Then, select the Bank Account tab and click on Add New. Fill in the Account details, upload supporting documents (Bank statement or Passbook), and submit the application using DSC/EVC.
70. How to calculate GST on gold?
Purchase of gold shall attract 3% GST on the value of gold. The making charges, if any, will attract GST at the rate of 5%. For example, the value of gold is ₹50,000, and the making charge is ₹5,000; the GST shall be ₹1,500 on the gold value + ₹250 on making, amounting to ₹1,750.
71. How to file NIL GST return
Log in to the GST portal, under ‘Returns Dashboard,d’, select the return period. For GSTR-3B or GSTR-1, hit ‘Prepare Online’ and enter zero values in all fields, and submit using EVC or DSC. NIL return should be filed if no transactions are there.
72. How to remove GST from the total amount with h example?
The original price can be found using this formula: Original Price = Total Amount × 100 / (100 + GST%). Say the total is ₹118, and the GST rate is 18%, so the original price = ₹118 × 100 / 118 = ₹100. Now, GST amount = ₹118 - ₹100 = ₹18.
73. How to surrender the GST number.
Log in to the GST portal, after 'Services' > 'Registration' > 'Application for Cancellation of Registration.' Select the reason for cancellation, furnish the details, and upload documents. Once approved by the officer, your GSTIN shall be cancelled officially.
74. Is GST applicable on rent?
Yes, GST is applicable on commercial at 18%. For residential properties, GST is generally exempt unless such residential property is rented out for commercial purposes to a registered business entity-in which case it may be under RCM provisions.
75. What are the documents required for GST registration?
Documents include PAN card, Aadhaar card, proof of business address (electricity bill/rent agreement), passport photo, bank statement/cancelled cheque, and digital signature (for companies/LLPs). Exact requirements depend on the nature of the business.
76. What is e-invoicing in GST?
E-invoicing is a system wherein B2B invoices are electronically authenticated by the GSTN and are allotted an Invoice Reference Number (IRN) with an assurance of real-time reporting of invoices and is mandatory to be adopallalle businesses above a prescribed turnover (presently ₹5 crore+).
77. What is GST Accounting?
GST is treated as a liability and the input credit. Businesses charge output GST on sales and claim ITC on purchases. It impacts sales, purchase, and expenses ledger and needs to be properly documented for ITC filing.
78. Who Has to Register for Tax under GST?
Any entity with an annual gross turnover above ₹40 lakhs (₹20 lakhs in respect of special category states for providers of services) in India is bound to register under GST. In addition, suppliers who make interstate supplies, e-commerce operators, or special category taxpayers under RCM have to register irrespective of their turnover.
