GST tips for businesses
- For intra-state transactions, GST is split equally as CGST and SGST. For inter-state transactions, a single IGST at the same combined rate applies.
- If you're a GST-registered business, you can claim Input Tax Credit (ITC) on GST paid on purchases — this reduces your net GST liability.
- GST returns must be filed monthly (GSTR-1 and GSTR-3B) or quarterly if opted for QRMP scheme for businesses below ₹5 Cr turnover.
- Composition scheme dealers (turnover up to ₹1.5 Cr) pay a flat rate and cannot collect GST from customers or claim ITC.
Understanding GST in India
Goods and Services Tax (GST) is India's unified indirect tax system, introduced in 2017. It replaced multiple taxes (VAT, service tax, excise duty) with a single framework. GST is applied at four main rates — 5%, 12%, 18%, and 28% — with essential goods often exempted or taxed at 0%. The exact rate for any product or service is defined by HSN (Harmonised System of Nomenclature) or SAC (Services Accounting Code).
For most business-to-business (B2B) transactions, GST paid on inputs can be offset against GST collected on outputs through the Input Tax Credit (ITC) mechanism, ensuring the tax burden ultimately falls only on the end consumer. This calculator handles both exclusive GST (adding tax to a base price) and inclusive/reverse GST (extracting the tax from a GST-inclusive price).
Frequently asked questions
What is the difference between CGST, SGST, and IGST?
Who needs to register for GST?
What items are exempt from GST?
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