Taxation

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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.

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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.

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GST Amount = Taxable Value × GST Rate

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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.

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What are the GST rate slabs?

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.

Who must register for GST?

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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Input Tax Credit (ITC)

The GST paid on business purchases that can be claimed as a credit against the GST collected on sales, reducing the net tax payable.

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