A comprehensive indirect tax levied on the supply of goods and services in India, replacing multiple earlier taxes like VAT, excise duty, and service tax.
GST was implemented on July 1, 2017, as India's biggest tax reform. It follows a dual structure: Central GST (CGST) and State GST (SGST) for intra-state supplies, and Integrated GST (IGST) for inter-state supplies. GST has four rate slabs: 5%, 12%, 18%, and 28%, plus exempt (0%) and cess categories. It is a destination-based, multi-stage tax with input tax credit mechanism that eliminates cascading (tax-on-tax) effect.
A business in Tamil Nadu sells ₹1,00,000 worth of goods to a buyer in Karnataka. IGST at 18% = ₹18,000. Total invoice = ₹1,18,000.
Ensures accurate financial reporting and record-keeping
Helps maintain regulatory and tax compliance
Enables better-informed business decisions
Improves operational efficiency and cash flow management
0% (essential items), 5% (common necessities), 12% (standard goods/services), 18% (most goods/services), and 28% (luxury/sin goods) plus additional cess on some items.
Businesses with aggregate turnover exceeding ₹40 lakh (₹20 lakh for services, ₹10 lakh for special category states) must register. Inter-state suppliers and e-commerce operators must register regardless of turnover.
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