What is GST? A Beginner’s Guide
GST (Goods and Services Tax) is a comprehensive indirect tax levied on the supply of goods and services in India. Introduced on 1st July 2017, GST replaced a complex structure of multiple indirect taxes like VAT, service tax, excise duty, and more.
✅ Why Was GST Introduced?
Before GST, India’s tax system was fragmented. Each state had its own tax rules, creating confusion, cascading taxes, and compliance burdens for businesses.
GST brought:
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Uniform tax structure across India
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Elimination of double taxation
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Simplified compliance and return filing
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Boost in ease of doing business
🔍 How GST Works in India
GST is levied at each stage of the supply chain but allows input tax credit (ITC) to ensure tax is paid only on the value added at each stage.
Types of GST:
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CGST – Central Goods and Services Tax (levied by the central government)
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SGST – State Goods and Services Tax (levied by state governments)
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IGST – Integrated GST (on inter-state transactions)
For example:
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Intra-state sale: CGST + SGST
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Inter-state sale: IGST
📦 Who Needs to Register for GST?
You must register for GST if:
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Your business turnover exceeds ₹40 lakh (₹20 lakh for services)
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You are involved in inter-state trade
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You sell online through platforms like Amazon, Flipkart
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You’re an e-commerce operator or aggregator
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You want to claim input tax credit
📝 GST Rates in India
Goods and services fall into four major tax slabs:
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5% – Basic essentials like food, footwear
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12% & 18% – Standard goods/services like phones, hotel stays
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28% – Luxury items, automobiles, sin goods
⚠️ Note: Some items like alcohol, petrol, and diesel are still outside GST.
🧾 What is a GSTIN?
GSTIN is your unique 15-digit registration number under GST, linked with your PAN. It’s mandatory for issuing invoices, filing returns, and collecting taxes.
📤 What Are GST Returns?
Once registered, businesses need to file GST returns regularly:
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GSTR-1 – Sales
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GSTR-3B – Summary of sales & purchases
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GSTR-9 – Annual return
Timely filing avoids penalties and allows you to claim input tax credit.
💡 Benefits of GST for Beginners
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Transparent pricing for consumers
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Fewer tax compliances
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Nationwide market access
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Encourages startups and digital businesses
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Easy tracking through GST portal
🔚 Final Thoughts
GST simplified India’s tax system by bringing all indirect taxes under one umbrella. For beginners, understanding GST is essential for business growth, compliance, and avoiding penalties.
If you’re starting a business or freelancing, getting GST-ready is one of the first steps toward professional legitimacy and scalability.