What does GST stand for?

GST stands for Goods and Services Tax. It is India's unified indirect tax system, which came into effect on July 1, 2017, replacing over 17 central and state taxes.

Who pays GST — the buyer or the seller?

The seller collects GST from the buyer and remits it to the government. However, the economic burden falls on the end consumer, who cannot claim it back. Registered businesses can claim Input Tax Credit, effectively passing the tax burden down the chain until it reaches the final consumer.

What is the difference between CGST, SGST, and IGST?

CGST and SGST are levied together on intra-state transactions (sales within the same state) — CGST goes to the Centre and SGST goes to the state, each at half the total rate. IGST is levied on inter-state transactions (sales across states) by the Centre, which then distributes the state's share to the destination state.

Is GST applicable on all goods and services?

No. Certain goods and services are exempt from GST or are outside its scope entirely. Exemptions include fresh unprocessed food, healthcare and education services, and certain agricultural products. Petroleum products, alcohol, and electricity are outside GST's scope and continue to attract separate taxes.

Can I run a business without registering for GST?

Yes, if your annual turnover is below the applicable threshold (₹40 lakh for goods, ₹20 lakh for services in most states). However, unregistered businesses cannot charge GST, cannot claim ITC, and may be excluded from supply chains where registered buyers require compliant invoices.

What happens if I don't file my GST returns on time?

Late filing attracts a late fee of ₹50 per day (₹20 per day for nil returns), subject to a maximum of ₹10,000 per return. In addition, interest at 18% per annum is charged on the unpaid tax liability from the due date. Persistently non-filing returns can lead to cancellation of GST registration

What is the reverse charge mechanism (RCM) under GST?

Normally, the supplier pays GST to the government. Under the Reverse Charge Mechanism (RCM), the recipient of the supply is responsible for paying GST directly to the government. RCM applies in specific cases: imports of services, supplies from unregistered dealers in certain categories, and specific notified categories like legal services or goods transport agencies.

Taniva Debnath, Author at Tally Solutions

"Breaking down complexity with every article"

Taniva Debnath

With hands-on experience in organic growth, technical optimization, and search-intent driven content strategy. She works closely with brands to improve visibility, strengthen topical authority, and turn search traffic into measurable business results. Her expertise includes on-page optimization, technical audits, keyword research, and link-building strategies aligned with modern search engine guidelines. She focuses on practical, data-backed SEO rather than theory which help businesses grow sustainably in competitive search landscapes.

With hands-on experience in organic growth, technical optimization, and search-intent driven content strategy. She works closely with brands to improve visibility, strengthen topical authority, and tu... Read More

With hands-on experience in organic growth, technical optimization, and search-intent driven content strategy. She works closely with brands to improve visibility, strengthen topical authority, and turn search traffic into measurable business results. Her expertise includes on-page optimization, technical audits, keyword research, and link-building strategies aligned with modern search engine guidelines. She focuses on practical, data-backed SEO rather than theory which help businesses grow sustainably in competitive search landscapes. Read Less