What is GST? Goods & Services Tax Explained for Beginners

GST in one paragraph

Goods and Services Tax is a single, destination-based indirect tax that replaced a patchwork of central and state taxes — excise duty, service tax, VAT, entry tax and more — with one tax levied at every stage of the supply chain, with credit for tax already paid at earlier stages (input tax credit).

CGST, SGST and IGST

A sale within the same state attracts CGST (central share) and SGST (state share) in equal halves. A sale across state lines attracts IGST instead, collected by the centre and apportioned to the destination state. The rate you actually pay is the same either way — only the split changes.

Who needs to register

GST registration is mandatory once your aggregate turnover crosses ₹40 lakh for goods (₹20 lakh in special-category states) or ₹20 lakh for services (₹10 lakh in special-category states). It's also mandatory regardless of turnover if you sell across state lines, sell on e-commerce platforms, or are otherwise covered under specific categories the law lists as compulsorily registrable.

Filing after registration

Once registered, you're required to file GST monthly return filing — GSTR-1 (outward supplies) and GSTR-3B (summary return with tax payment) — every month or quarter depending on your scheme, even in a month with zero sales.

FAQs

Is GST registration free? The government levies no fee for GST registration itself; professional fees for assisted registration cover documentation, application drafting and follow-up.

What happens if I don't register when required? Operating without mandatory registration exposes you to penalties equal to the tax evaded (subject to a minimum), in addition to the tax itself with interest.