GST (Goods and Services Tax) is India's unified, destination-based indirect tax on the supply of goods and services, live since 1 July 2017. After the GST 2.0 rationalisation effective 22 September 2025, most items fall in just two main slabs — 5% and 18% — with a 40% rate for demerit / sin goods (the old 12% and 28% slabs are largely gone). A business must register once turnover crosses Rs 40 lakh (goods) or Rs 20 lakh (services), then file periodic returns and can claim Input Tax Credit.
GST 2.0 collapsed the old four-slab system (5/12/18/28%) into two principal rates — 5% for essentials and merit items and 18% as the standard rate — plus a special 40% rate for sin and luxury goods (pan masala, aerated drinks, high-end vehicles). Nil-rated and exempt supplies continue. Always confirm an item's current rate with its HSN/SAC on the GST portal.
GST Rate Slabs After GST 2.0
The four GST components remain the same — CGST + SGST on intra-state supply, IGST on inter-state supply and imports, and UTGST in union territories. What changed is the rate structure:
| Slab | Applies to (indicative) | Status |
|---|---|---|
| Nil | Unbranded food staples, fresh produce, most healthcare & education | Exempt / 0% |
| 5% | Essentials, packaged food, many daily-use & merit items | Merit rate |
| 18% | Standard rate — most goods & services | Standard rate |
| 40% | Demerit / sin goods — pan masala, aerated drinks, luxury vehicles | Demerit rate |
12% and 28% slabs were largely removed under GST 2.0 (eff. 22 Sep 2025). Item-level rates depend on HSN/SAC — verify on gst.gov.in.
CGST, SGST & IGST
- CGST — Central GST, on intra-state supplies, collected by the Centre.
- SGST — State GST, on intra-state supplies, collected by the State (equal split with CGST).
- IGST — Integrated GST, on inter-state supplies and imports, collected by the Centre.
- UTGST — Union Territory GST, in union territories without a legislature.
Need the exact rate for your product or service?
Check HSN / SAC rates →GST Registration & Thresholds
GST registration is mandatory once aggregate turnover crosses the threshold, and compulsory (regardless of turnover) for several categories. Thresholds were unchanged by Budget 2025 and GST 2.0.
| Category | Normal states | Special-category states |
|---|---|---|
| Supplier of goods | Rs 40 lakh | Rs 20 lakh |
| Supplier of services | Rs 20 lakh | Rs 10 lakh |
Special-category states are mainly the North-Eastern and certain hill states (some, like Assam & J&K, adopted the higher goods limit).
Registration is compulsory irrespective of turnover for:
- All inter-state suppliers of goods (with limited exceptions)
- E-commerce operators and most sellers on e-commerce platforms
- Persons liable to pay tax under reverse charge
- Casual and non-resident taxable persons
Ready to get your GSTIN?
Start GST Registration →GST Returns You Must File
A regular taxpayer files outward-supply, summary and annual returns; composition dealers file a simpler set. Due dates run monthly or quarterly depending on your scheme.
| Return | Purpose | Frequency | Typical due date |
|---|---|---|---|
| GSTR-1 | Outward supplies (sales) | Monthly / QRMP | 11th (M) / 13th (Q) |
| GSTR-3B | Summary return + tax payment | Monthly / QRMP | 20th (M) / 22nd–24th (Q) |
| CMP-08 | Composition tax statement | Quarterly | 18th of next month |
| GSTR-9 | Annual return | Yearly | 31 December |
QRMP = Quarterly Return, Monthly Payment (turnover up to Rs 5 crore). Confirm current dates on the GST portal.
Missing a GST return attracts a per-day late fee (capped) plus 18% p.a. interest on any tax paid late. A pending return can also block filing of the next period and freeze your buyers' Input Tax Credit.
Input Tax Credit & Reverse Charge
Input Tax Credit (ITC) lets a registered business set off the GST paid on purchases against GST collected on sales — the mechanism that stops tax cascading. Under reverse charge (RCM), the recipient (not the supplier) pays GST on certain notified supplies.
| Concept | Who pays / claims | Condition |
|---|---|---|
| Forward charge + ITC | Supplier collects; buyer claims ITC | Invoice in GSTR-2B |
| Reverse charge (RCM) | Recipient self-pays GST | On notified goods / services |
| Blocked credit — Sec 17(5) | No ITC | Motor cars, personal use, etc. |
ITC needs a valid tax invoice, receipt of goods/services, supplier's return filed, and the invoice reflected in your GSTR-2B.
To value a supply quickly, use our GST calculator for GST-inclusive or exclusive amounts with the CGST + SGST or IGST split.
GST — Frequently Asked Questions
Related TaxClue services
GST — From Registration to Returns, Sorted
Whether you are registering for the first time, filing monthly returns, reconciling ITC or handling RCM, TaxClue's CA-led team keeps you compliant under GST 2.0 — 100% online, across India.