Frequently asked questions
Plain answers to the questions businesses ask about registering for GST, filing returns and claiming credit.
Who needs to register for GST in India?
Registration is generally required once your annual turnover crosses the threshold set for your state and type of supply. Some businesses must register regardless of turnover, for example those making interstate supplies of goods or selling through e-commerce. Once registered, you receive a 15-character GSTIN tied to your PAN and state.
What is the difference between CGST, SGST and IGST?
On a supply within a single state, the tax splits into CGST collected by the Centre and SGST collected by the state. On supplies between states and on imports, a single IGST is charged instead. Union Territories without their own legislature use UTGST in place of SGST.
What is the difference between GSTR-1 and GSTR-3B?
GSTR-1 is the return where you report your outward supplies, that is your sales, in detail. GSTR-3B is a summary return where you declare your overall liability, claim input tax credit and pay the tax due. Most regular taxpayers file both, and the details in one should reconcile with the other.
What is input tax credit and how does it work?
Input tax credit lets a registered business reduce the GST it owes on sales by the GST it already paid on genuine business purchases. The purchase must be used for the business, you must hold a valid tax invoice, and the supplier must have reported and paid the tax. This mechanism stops the same value being taxed over and over through the supply chain.
What is the composition scheme in GST?
The composition scheme lets eligible small businesses pay tax at a flat rate on turnover and file simpler, less frequent returns. In exchange they cannot collect GST from customers in the usual way or claim input tax credit, and some kinds of business are not allowed to opt in. It suits small suppliers who value easier compliance over credit.