GST Act 2017

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GST Overview

Structure & concepts

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Rate Structure

0%, 5%, 12%, 18%, 28%

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Registration

Thresholds & process

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Input Tax Credit

Eligibility & conditions

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Return Calendar

GSTR-1, 3B, 9, 9C

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E-Invoice & E-Way Bill

Applicability & limits

↩️

Reverse Charge

When buyer pays GST

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Composition Scheme

Small business option

⚠️

Penalties & Interest

Default consequences

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Official Links

Govt portals

GST Act 2017

GST Overview & Structure

GST is a comprehensive, destination-based, multi-stage indirect tax levied on every value addition in the supply chain. It replaced over 17 central and state indirect taxes from 1 July 2017.

CGST

Central GST — Central Govt

SGST

State GST — State Govt

IGST

Integrated GST — Interstate

When CGST+SGST vs IGST applies

Supply Type	Tax Applied	Revenue Goes To
Within same state (intrastate)	CGST + SGST (equal halves)	Centre + State equally
Between two states (interstate)	IGST (full rate)	Centre collects; distributes to destination state
Imports into India	IGST + BCD + other levies	Centre
Exports from India	Zero-rated (GST = 0)	Refund of ITC available
Special Economic Zones (SEZ)	Zero-rated supply	ITC refund available

Taxable Event — Supply Sec 7 CGST

What is Supply?Supply includes all forms of supply of goods or services — sale, transfer, barter, exchange, licence, rental, lease, disposal — made or agreed to be made for consideration in the course or furtherance of business. Also includes import of services even without consideration (between related parties).

Place of Supply — Key Rules

Type of Supply	Place of Supply	Reference
Goods (with movement)	Where goods are delivered	Sec 10 IGST
Services — general	Location of recipient	Sec 12/13 IGST
Immovable property services	Location of property	Sec 12(3)
Restaurant / food services	Where service is actually performed	Sec 12(4)
Online / digital services (B2C)	Location of recipient	Sec 13(12)

📎 Official Sources

GST Portal ↗ CBIC Portal ↗

GST Act 2017 — Updated 22 Sept 2025

GST Rate Structure — GST 2.0

The 56th GST Council meeting (Sept 2025) overhauled GST rates into a simplified structure. The 12% and 28% slabs have been removed for most items. New structure effective 22 September 2025.

⚡ GST 2.0 — Effective 22 September 2025

The 12% and 28% slabs are removed. Structure simplified to 0%, 5%, 18%, and 40%. 99% of items in the 12% slab moved to 5%. 90% of items in 28% slab moved to 18%. New 40% slab for sin and luxury goods.

Exempt essentials

Necessities & daily use

18%

Standard rate (most goods & services)

40%

Sin & luxury goods (NEW)

❌ Removed Slabs12% slab — REMOVED (effective 22 Sept 2025). Items shifted to 5% or 18%. 28% slab — REMOVED for most items. Items shifted to 18% or new 40% slab. If you find any rate reference citing 12% or 28% — it is outdated.

Goods — Updated Rate Reference (Post 22 Sept 2025)

Item	Old Rate (pre Sept 2025)	New Rate (from 22 Sept 2025)	HSN
Fresh vegetables, fruits, milk, eggs (unprocessed)	0%	0% (unchanged)	Ch 1–10
Packaged food, sugar, tea, coffee	5–12%	5%	Ch 4, 17, 21
Meat (processed/frozen), butter, ghee	12%	5%	Ch 2, 4
Air conditioners, televisions (LCD/LED), refrigerators, washing machines	28%	18%	Ch 84, 85
Mobile phones, computers, monitors	18%	18% (unchanged)	Ch 84, 85
Cement, paints	28%	18%	Ch 25, 32
Small cars (petrol <1200cc / diesel <1500cc, length <4m)	28% + cess	18%	Ch 87
Large / luxury vehicles, premium cars	28% + cess	40% (new slab)	Ch 87
Tobacco, gutka, pan masala, aerated drinks	28% + cess	40% (new slab)	Ch 21, 24
Gold, silver jewellery	3%	3% (unchanged)	Ch 71
Footwear (all categories)	5–18%	5%	Ch 64
Bicycles, sewing machines, pressure cookers	12%	5%	Ch 87, 84
Man-made fibres / yarn	12–18%	5%	Ch 54, 55
Spectacles / corrective goggles	28%	5%	Ch 90
Toys, dolls, handicrafts, paintings, sculptures	12%	5%	Ch 95, 97

Services — Updated Rate Reference (Post 22 Sept 2025)

Service	Old Rate	New Rate	SAC
Healthcare (hospitals, doctors, clinical services)	0%	0% (unchanged)	9993
Education (schools, colleges)	0%	0% (unchanged)	9992
Health insurance / life insurance premium	18%	0% — NEWLY EXEMPT	9971
Hotel stays up to ₹7,500/day	12%	5%	9963
Hotel stays above ₹7,500/day	18%	18% (unchanged)	9963
Restaurant (non-AC, no alcohol)	5% (no ITC)	5% (unchanged)	9963
Gyms, salons, barbers, yoga centres	18%	5%	9997
IT / software services	18%	18% (unchanged)	9983
Legal, accounting, consulting services	18%	18% (unchanged)	9982
Air travel (economy class)	5%	5% (unchanged)	9964
Air travel (business class)	12%	5%	9964
GTA (Goods Transport Agency)	5% (no ITC) / 18% (with ITC)	5% (no ITC) / 18% (with ITC)	9965
Banking & financial services	18%	18% (unchanged)	9971
Construction — affordable housing	1% (no ITC)	1% (unchanged)	9954
Works contract (immovable property)	18%	18% (unchanged)	9954

Special Rates Still ApplicableGold / silver / precious metals: 3%. Cut & polished diamonds: 1.5%. Composition dealers: 1%, 5%, or 6% on turnover. TCS by e-commerce operators: 0.5% (CGST) + 0.5% (SGST) = 1% total.

HSN / SAC Code SearchAlways verify the exact rate for your product/service using the official GST portal HSN search. Misclassification attracts penalty and demand. Rate changes effective 22 Sept 2025 must be reflected in all invoices issued on and after that date.

📎 Official Sources

HSN / SAC Code Search ↗ CBIC GST Rates ↗ GST 2.0 Official Press Release ↗

GST Act 2017

GST Registration & Thresholds

GST registration is mandatory once turnover crosses the prescribed threshold. Certain businesses must register regardless of turnover.

Registration Thresholds Sec 22 CGST

Business Type	Normal States	Special Category States
Supply of Goods	₹40 lakh per year	₹20 lakh (some states ₹10 lakh)
Supply of Services	₹20 lakh per year	₹10 lakh
Both Goods & Services	₹20 lakh (services limit applies)	₹10 lakh

Special category states: Arunachal Pradesh, Assam, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, Uttarakhand.

Mandatory Registration — Regardless of Turnover Sec 24 CGST

Category	Registration Required
Interstate supply of goods	Yes — mandatory from first rupee
E-commerce sellers (selling via Amazon, Flipkart etc.)	Yes — mandatory regardless of turnover
Casual taxable persons	Yes — 5 days before operations begin
Non-resident taxable persons	Yes — before supplying in India
Persons liable to pay under RCM	Yes — mandatory
Input Service Distributors (ISD)	Yes — mandatory
E-commerce operators collecting TCS	Yes — mandatory

Registration Process

Steps for New GST Registration: 1. Apply on GST Portal (gst.gov.in) — Form GST REG-01
2. Upload: PAN, Aadhaar, proof of business, bank account details, photographs
3. ARN (Application Reference Number) generated immediately
4. Verification by GST Officer — within 7 working days (or 30 days if physical verification required)
5. GSTIN allotted — 15-digit PAN-based unique number

GSTIN Format: 2-digit state code + 10-digit PAN + 1-digit entity number + 1 Z + 1 check digit

Voluntary RegistrationBusinesses below threshold can also voluntarily register to avail ITC benefits — especially useful if they supply to GST-registered businesses who need to claim ITC.

📎 Official Sources

GST Registration Portal ↗ Search GST Number ↗ CBIC Portal ↗

GST Act 2017

Input Tax Credit (ITC)

ITC allows businesses to reduce their GST liability by the GST already paid on purchases used for business purposes. It avoids the cascading effect of tax on tax.

Eligibility Conditions Sec 16 CGST

#	Condition	Details
1	Registered taxpayer	Must be a registered GST taxpayer
2	Tax invoice or debit note	Must possess a valid tax invoice / debit note issued by a registered supplier
3	Goods/services received	Goods or services must actually be received
4	Tax paid by supplier	Tax charged must have been actually paid to government by supplier (verified via GSTR-2B)
5	Return filed	Buyer must have filed their GST return (GSTR-3B)
6	Time limit	Claim ITC by 30th November of following FY or date of filing annual return — whichever is earlier

ITC — What is Blocked Sec 17(5) CGST

Blocked ITC Item	Exception (when ITC allowed)
Motor vehicles (up to 13-seater)	If used for transport of passengers, driving training school, further supply of vehicles
Food, beverages, outdoor catering	If it is the same category of supply being made (e.g. restaurant business)
Club membership, health & fitness services	If it is the same category of outward supply
Rent-a-cab, life insurance, health insurance	If mandatory under any law for employees; or same category of outward supply
Travel benefits to employees (LTA etc.)	Not allowed
Works contract services (construction of immovable property)	Only allowed if it is a further supply of works contract services
Goods/services for personal consumption	Not allowed
Goods lost, stolen, destroyed, written off	Not allowed

ITC Reversal — When ITC Must Be Reversed Sec 17 / Rule 42-43

Proportional Reversal (Rule 42/43):If inputs/capital goods are used for both taxable and exempt supplies — ITC must be reversed proportionally. Formula: ITC to reverse = Total ITC × (Exempt turnover / Total turnover). This reversal must be done every month and reconciled at year-end in GSTR-9.

Full Reversal — Sec 16(2)(b) amendment (w.e.f. Oct 2022)ITC claimed must match what appears in GSTR-2B (supplier's return). If supplier has not filed return or filed incorrectly — ITC may be reversed and demand raised on the buyer.

📎 Official Sources

GST Portal ↗ CBIC Circulars on ITC ↗

GST Act 2017

GST Return Filing Calendar

All GST registered persons must file periodic returns on the GSTN portal, irrespective of whether there are transactions or not. Nil returns must also be filed.

Return	Who Files	Frequency	Due Date	Details
GSTR-1	All regular taxpayers	Monthly / Quarterly (QRMP)	Monthly: 11th of next month; Quarterly: 13th of month after quarter	Outward supply details — all sales invoices
GSTR-3B	All regular taxpayers	Monthly / Quarterly (QRMP)	Monthly: 20th / 22nd / 24th (staggered by state); Quarterly: 22nd / 24th	Summary return — tax payment, ITC claim
GSTR-2B	All regular taxpayers	Auto-generated monthly	Available by 14th of following month	Auto-populated ITC statement from suppliers' GSTR-1
GSTR-4	Composition scheme taxpayers	Annual	30 April of following FY	Annual return for composition dealers
GSTR-5	Non-resident taxable persons	Monthly	20th of following month	Return for non-resident suppliers
GSTR-6	Input Service Distributors (ISD)	Monthly	13th of following month	ISD return — distribution of ITC
GSTR-7	TDS deductors under GST	Monthly	10th of following month	TDS deducted under GST
GSTR-8	E-commerce operators (TCS)	Monthly	10th of following month	TCS collected from sellers
GSTR-9	All regular taxpayers (turnover > ₹2 Cr)	Annual	31 December of following FY	Annual return — reconciliation of monthly returns
GSTR-9C	Turnover > ₹5 crore	Annual	31 December of following FY	Reconciliation statement — certified by CA/CMA

QRMP Scheme — Quarterly Return Monthly Payment

Who can opt: Taxpayers with annual turnover up to ₹5 crore in preceding FY. File GSTR-1 and GSTR-3B quarterly. Pay tax monthly (by 25th) using PMT-06 challan — pay either fixed amount (35% of last quarter tax) or self-assessed amount. IFF (Invoice Furnishing Facility) available for B2B invoices in first two months of quarter.

📎 Official Sources

File GST Returns ↗ CBIC Due Date Notifications ↗

GST Act 2017

E-Invoice & E-Way Bill

E-invoice is mandatory for B2B supplies above prescribed turnover limit. E-way bill is required for movement of goods above specified value.

E-Invoice — Applicability

Annual Turnover	E-Invoice Applicable From
Above ₹5 crore	1 August 2023 (currently mandatory)
₹10–₹50 crore	1 October 2022
₹50–₹100 crore	1 April 2022
₹100–₹500 crore	1 January 2022
Above ₹500 crore	1 October 2020

How E-Invoice works: Supplier generates invoice in their ERP/accounting software → uploads to IRP (Invoice Registration Portal) → IRP validates and generates IRN (Invoice Reference Number) + QR code → returns digitally signed invoice → supplier sends to buyer. GSTR-1 auto-populated from e-invoice data.

Who is EXEMPT from E-Invoice

❌ E-Invoice Not Required

B2C supplies (to unregistered buyers)
Nil-rated / exempt supplies
SEZ supplies (with payment / without payment)
Banks, NBFC, insurance companies
GTA (Goods Transport Agencies)
Passenger transport services
Multiplex cinema services

✅ E-Invoice Mandatory For

B2B tax invoices
B2G (supply to government) invoices
Export invoices
Debit notes and credit notes
Reverse charge supplies

E-Way Bill — Movement of Goods

Category	E-Way Bill Required
Goods value exceeding ₹50,000 (single invoice)	Yes — mandatory for inter-state movement
Interstate movement regardless of value	Yes — mandatory for certain notified goods
Intrastate movement	As per respective state notification (most states ₹50,000 limit)
Goods transported by non-motorised conveyance	No
Goods transported from customs port to ICD / CFS	No
Movement within 50 km from supplier to transporter	No (in some states)

E-Way Bill Validity: Up to 200 km — 1 day. Every additional 200 km — 1 extra day. Over-dimensional cargo: 20 km = 1 day. Extension can be done 4 hours before and 4 hours after expiry.

📎 Official Sources

E-Invoice Portal ↗ E-Way Bill Portal ↗ GST Portal ↗

GST Act 2017

Reverse Charge Mechanism (RCM)

Under RCM, the liability to pay GST shifts from the supplier to the recipient of goods or services. The recipient pays GST directly to the government.

Why RCM?RCM is applied when the supplier is unregistered, or for specified categories of goods/services where government wants to ensure tax compliance from the buyer (who is usually larger and more compliant). The buyer pays GST and can claim ITC of the same amount (if eligible).

RCM — Specified Services Sec 9(3) CGST / Notification 13/2017

Service / Goods	Supplier	Recipient (pays GST)	Rate
GTA (Goods Transport Agency) services	Any GTA	Factory, registered persons, body corporate, society, co-op	5% (no ITC) or 18% (with ITC)
Legal services by advocate / firm of advocates	Individual / firm advocate	Any business entity	18%
Sponsorship services	Any person	Body corporate or partnership firm	18%
Services by Arbitral Tribunal	Arbitral Tribunal	Any business entity	18%
Import of services (from outside India)	Foreign service provider	Indian recipient (registered or unregistered)	Applicable rate
Director's services to a company	Director	Company (recipient)	18%
Insurance agent to insurance company	Insurance agent	Insurance company	18%
Rent from government / local authority	Govt / local authority	Registered business entity	18%

RCM — Unregistered Supplier Sec 9(4) CGST

Sec 9(4) RCM on Unregistered Purchases:Currently applicable only to specific notified categories (not all unregistered purchases). A registered person purchasing specified goods/services from an unregistered supplier must pay GST under RCM. ITC of such RCM tax can be claimed in the same month of payment.

📎 Official Sources

CBIC Notifications on RCM ↗ GST Portal ↗

GST Act 2017

Composition Scheme

A simplified compliance option for small businesses. Pay a flat rate of GST on turnover instead of regular GST — less compliance, but no ITC benefit and cannot supply interstate.

Eligibility & Rates Sec 10 CGST

Category	Turnover Limit	GST Rate	Returns
Manufacturer (goods)	≤ ₹1.5 crore (₹75L special category states)	1% (0.5% CGST + 0.5% SGST)	GSTR-4 annual; CMP-08 quarterly
Trader (goods)	≤ ₹1.5 crore	1%	Same
Restaurant (food & drink, no alcohol)	≤ ₹1.5 crore	5%	Same
Service providers (Composition for services)	≤ ₹50 lakh	6% (3% CGST + 3% SGST)	Same

✅ Advantages

Flat rate — no complex calculation
Quarterly payment (CMP-08)
Annual return (GSTR-4) instead of monthly
Less record-keeping
Lower tax rate than regular GST

❌ Restrictions

Cannot claim ITC on purchases
Cannot supply interstate
Cannot supply non-taxable goods
Cannot issue tax invoice (issue Bill of Supply)
GST not charged to customers — absorbed by dealer
Cannot supply through e-commerce operators

📎 Official Sources

GST Portal — Composition Option ↗ CBIC ↗

GST Act 2017

Penalties & Interest

GST law prescribes interest for late payment and penalties for non-compliance. Know the consequences to avoid unnecessary costs.

Interest on Late Payment Sec 50 CGST

Situation	Interest Rate
Delayed payment of GST (regular)	18% per annum
Undue / excess ITC claim or excess reduction in output tax liability	24% per annum

Late Fee — Return Filing Sec 47 CGST

Return	Late Fee per Day	Maximum Late Fee
GSTR-3B / GSTR-1 (with tax liability)	₹50/day (₹25 CGST + ₹25 SGST)	₹10,000 (₹5,000 CGST + ₹5,000 SGST)
GSTR-3B / GSTR-1 (nil return)	₹20/day (₹10 CGST + ₹10 SGST)	₹500
GSTR-9 Annual return	₹200/day (₹100 CGST + ₹100 SGST)	0.25% of turnover in state
GSTR-9C (Audit return)	Same as GSTR-9

Key Penalties Sec 122–138 CGST

Offence	Penalty
Supplying goods/services without invoice	₹10,000 or tax evaded — whichever is higher
Issuing invoice without supply (fake invoice)	₹10,000 or tax involved — whichever is higher
Obtaining ITC fraudulently / fake invoices	100% of tax involved (+ interest)
Not registering when required	₹10,000 or tax evaded — whichever is higher
Obstructing GST officer	₹25,000
Minor technical errors (not tax evasion)	₹10,000

Section 128A — Waiver of Interest & Penalty (FY 2017-20)Finance Act 2024 inserted Sec 128A providing waiver of interest and penalty for demands pertaining to FY 2017-18 to 2019-20, if taxpayer pays the full tax amount by a notified date. Applicable for cases under Sec 73 (non-fraud).

📎 Official Sources

CBIC — GST Acts & Rules ↗ GST Portal ↗

Official Sources

Government Portals

All TrustFactON content is sourced from these official portals. Visit for complete statutory text, notifications and circulars.

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GST Portal — gst.gov.in

Return filing, registration, refunds, payment, GSTR-2B ↗

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CBIC — cbic-gst.gov.in

GST Acts, rules, notifications, circulars, rates ↗

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HSN / SAC Search

Official GST portal HSN code search for goods and SAC for services ↗

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E-Invoice Portal

Generate IRN, e-invoice registration, API access ↗

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E-Way Bill Portal

Generate, extend, cancel e-way bills ↗

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GST Rate Schedule

Official goods and services rate schedule from CBIC ↗

About TrustFactONPlain-language summaries for educational purposes only. For binding text and latest notifications, always refer to official portals above. Not a substitute for professional advice. Built by Evenset Consultancy Services, Bengaluru.

What would you like to know about GST?

GST Overview

Rate Structure

Registration

Input Tax Credit

Return Calendar

E-Invoice & E-Way Bill

Reverse Charge

Composition Scheme

Penalties & Interest

Official Links

GST Overview & Structure

When CGST+SGST vs IGST applies

Taxable Event — Supply Sec 7 CGST

Place of Supply — Key Rules

📎 Official Sources

GST Rate Structure — GST 2.0

⚡ GST 2.0 — Effective 22 September 2025

Goods — Updated Rate Reference (Post 22 Sept 2025)

Services — Updated Rate Reference (Post 22 Sept 2025)

📎 Official Sources

GST Registration & Thresholds

Registration Thresholds Sec 22 CGST

Mandatory Registration — Regardless of Turnover Sec 24 CGST

Registration Process

📎 Official Sources

Input Tax Credit (ITC)

Eligibility Conditions Sec 16 CGST

ITC — What is Blocked Sec 17(5) CGST

ITC Reversal — When ITC Must Be Reversed Sec 17 / Rule 42-43

📎 Official Sources

GST Return Filing Calendar

QRMP Scheme — Quarterly Return Monthly Payment

📎 Official Sources

E-Invoice & E-Way Bill

E-Invoice — Applicability

Who is EXEMPT from E-Invoice

❌ E-Invoice Not Required

✅ E-Invoice Mandatory For

E-Way Bill — Movement of Goods

📎 Official Sources

Reverse Charge Mechanism (RCM)

RCM — Specified Services Sec 9(3) CGST / Notification 13/2017

RCM — Unregistered Supplier Sec 9(4) CGST

📎 Official Sources

Composition Scheme

Eligibility & Rates Sec 10 CGST

✅ Advantages

❌ Restrictions

📎 Official Sources

Penalties & Interest

Interest on Late Payment Sec 50 CGST

Late Fee — Return Filing Sec 47 CGST

Key Penalties Sec 122–138 CGST

📎 Official Sources

Government Portals

GST Portal — gst.gov.in

CBIC — cbic-gst.gov.in

HSN / SAC Search

E-Invoice Portal

E-Way Bill Portal

GST Rate Schedule

GST Council Updates & Alerts