FAQ about GST

 Q: What is GST?

A: GST stands for Goods and Services Tax, which is a value-added tax imposed on most goods and services in India. It is a consumption-based tax, meaning that it is applied to the value of a good or service at each point of sale in the supply chain. GST replaced various indirect taxes in India, such as VAT, service tax, and excise duty, with a single tax.

Q: What is the current GST rate in India?

A: GST rates in India are divided into several different categories, including 5%, 12%, 18%, and 28%. The GST Council, which is made up of representatives from the central and state governments, periodically reviews and adjusts GST rates. Some goods and services, such as essential items like food and healthcare, are taxed at 0% under GST.

Q: Who is required to register for GST?

A: In India, businesses whose annual turnover exceeds a certain threshold are required to register for GST. The threshold currently stands at INR 20 Lakhs for northeastern states and INR 40 Lakhs for other states. Businesses whose turnover is below the threshold can still register for GST voluntarily. Additionally, certain types of businesses, such as those engaged in inter-state trade, are required to register for GST regardless of their turnover.

Q: How is GST calculated?

A: GST is calculated as a percentage of the value of a good or service. The percentage is based on the GST rate that applies to the item. To calculate GST, the taxable value of the item is multiplied by the GST rate. For example, if an item is sold for INR 100, and the GST rate is 18%, then the GST would be INR 18 (100*18%).

Q: What are the different types of GST returns?

A: In India, there are different types of GST returns that businesses are required to file. These include:

GSTR-1: Return for details of outward supplies

GSTR-2: Return for details of inward supplies

GSTR-3: Monthly return on the basis of GSTR-1 and GSTR-2

GSTR-9: Annual return

GSTR-9C: Reconciliation statement of GST returns

Q: Are GST payments tax-deductible?

A: In India GST paid on inputs (input tax credit) can be set off against the GST liability on the output supplies. Therefore GST payments are not tax deductible.

Q: Can GST be claimed back on exports?

A: Yes, GST paid on exports of goods and services can be claimed back as a refund. In India, exports are considered as zero-rated supplies and GST paid on exports can be claimed as input tax credit or as a refund.

Q: What are the penalties for not complying with GST rules?

A: Non-compliance with GST rules in India can result in various penalties, including fines, additional taxes, and even imprisonment. Penalties for not complying with GST rules can include failure to register for GST, failure to file returns, and failure to pay GST on time. The specific penalties that may apply will depend on the nature and severity of the non-compliance.