GST, or Goods and Services Tax, is a unified indirect tax levied on the supply of goods and services across India. Introduced on July 1, 2017, GST replaced multiple state and central taxes like VAT, service tax, excise duty, and others, creating a single, streamlined tax structure for the entire country.
Under GST, businesses are required to collect tax on their sales and can claim credit for the tax paid on their purchases. This mechanism of Input Tax Credit (ITC) helps avoid the cascading effect of taxes, making the entire system more transparent and efficient.
GST is categorized into three types based on the nature of the transaction:
- CGST (Central GST): Collected by the Central Government on intra-state sales.
- SGST (State GST): Collected by the State Government on intra-state sales.
- IGST (Integrated GST): Collected by the Central Government on inter-state sales and imports.
For small business owners and first-time entrepreneurs, GST registration is mandatory if your annual turnover exceeds the prescribed threshold (commonly ₹40 lakh, ₹20 lakh, or ₹10 lakh, depending on the state and business type). Once registered, regular GST return filing becomes a key compliance responsibility.
GST impacts several aspects of doing business in India:
- It is necessary for issuing proper tax invoices.
- It allows access to a wider market without worrying about multiple state taxes.
- It is often a requirement for getting listed on e-commerce platforms or working with large clients.
Non-compliance with GST rules—such as delayed filings or incorrect input claims—can lead to penalties or loss of input tax credit. That’s why many businesses choose to work with professionals to manage their GST-related obligations smoothly.
To learn more or get professional support with GST registration, filings, or compliance, visit FinTax24’s GST Solutions.