GST

CGST (Central GST) and SGST (State GST) are levied on intra-state supply — both at equal rates, shared between Centre and State. IGST (Integrated GST) is levied on inter-state supplies and imports — collected by the Centre and then apportioned to the destination state. Total tax incidence is the same whether CGST+SGST or IGST applies.

Yes. Voluntary registration allows you to issue GST invoices to registered clients who can then claim ITC — making your business more commercially attractive. You can also claim ITC on all your business purchases, reducing net costs. It also enhances business credibility and is often required for government contracts and tenders.

QRMP (Quarterly Return Monthly Payment) is available to taxpayers with aggregate turnover up to Rs.5 crore. They file GSTR-1 quarterly but pay tax monthly using a fixed-sum or self-assessment challan. Eligible businesses with manageable transaction volumes benefit from reduced filing frequency while remaining fully compliant.

E-invoicing requires businesses with aggregate turnover above Rs.5 crore to register every B2B, B2G, and export invoice on the Invoice Registration Portal (IRP) before issuance — obtaining an IRN (Invoice Reference Number) and QR code. Invoices issued without IRP registration are legally invalid, meaning the recipient cannot claim ITC on them.

Section 17(5) of the CGST Act lists inputs on which ITC cannot be claimed: motor vehicles (except for specified business use), food and beverages, club memberships, personal travel expenses, health insurance (except statutory), and construction of immovable property. Claiming and not reversing blocked ITC is a routine trigger for GST demand notices and a common finding in GST audits.

Late filing of GSTR-1 or GSTR-3B attracts Rs.50/day (Rs.25 CGST + Rs.25 SGST) for returns with tax liability, or Rs.20/day for nil returns. Interest at 18% p.a. is charged on outstanding tax from the due date. Consistent late filing can also lead to GSTIN suspension.

The Composition Scheme allows businesses with turnover up to Rs.1.5 crore (Rs.75 lakh for services) to pay a flat tax rate — 1% for traders, 5% for restaurants, 6% for service providers. However, composition dealers cannot charge GST on invoices, cannot claim ITC, cannot make inter-state supplies, and cannot supply through e-commerce platforms.

Imports are treated as inter-state supply and attract IGST on assessable value plus Basic Customs Duty. Exports are zero-rated — exporters can supply without paying IGST under a Letter of Undertaking (LUT) and claim ITC refund, or pay IGST and claim a cash refund after export. A valid LUT is a prerequisite for GST-free exports.

Under RCM, the recipient pays GST instead of the supplier. It applies to specified services (GTA, legal services by individual advocates, security services) and all purchases from unregistered suppliers by registered businesses. Tax paid under RCM can be claimed as ITC in the same tax period — but only against B2B output.

GSTR-9 is the annual consolidated GST return summarising all outward and inward supplies, ITC availed, taxes paid, and demands/refunds for the full financial year. For taxpayers with turnover up to Rs.2 crore, GSTR-9 filing is optional (but recommended). Between Rs.2-5 crore it is mandatory. Above Rs.5 crore, both GSTR-9 and GSTR-9C are mandatory.

Yes. GST refunds are available for: excess tax paid in error, ITC accumulated due to zero-rated exports, ITC accumulation due to inverted duty structure (higher tax on inputs than outputs), tax paid on advance when contract is cancelled, and tax paid on deemed exports. Refund applications are filed in Form RFD-01 within 2 years of the relevant date.

An ISD is a head office or centralised billing entity that receives invoices for services used by multiple branches or registrations. It distributes the ITC proportionately to each branch based on their turnover. Businesses with centralised billing for services like rent, legal fees, and software licences used across multiple states often need to register a head office as ISD.

Section 73 covers genuine errors — tax short paid, wrong ITC claimed — without fraud. It carries a 3-year time limit and a penalty of 10% of tax due. Section 74 covers wilful misstatement, fraud, or suppression — with a 5-year time limit and a penalty of up to 100% of tax due. Early response to notices under Section 73 (before SCN issuance) allows penalty to be reduced to nil by paying tax and interest.

GSTR-9C is a reconciliation between the audited financial statements and the GSTR-9 annual return, prepared and certified by a CA or Cost Accountant. It identifies discrepancies in turnover, ITC, and tax payment. It is mandatory for taxpayers with aggregate annual turnover above Rs.5 crore. Any tax payable on reconciliation must be discharged through DRC-03.

Voluntary cancellation is applied for in Form REG-16 when the business is discontinued, turnover falls below the threshold, or business constitution changes. A final return GSTR-10 must be filed within 3 months of cancellation. Any ITC balance in the electronic credit ledger must be reversed before cancellation. We handle the complete cancellation process including final return.

No. Salary income from an employer-employee relationship is outside the scope of GST. However, director remuneration (other than as employee), independent consulting, and services provided by a person to a company outside an employer-employee arrangement may attract GST — and in certain cases, the company pays GST under reverse charge.

Section 128A (inserted through Finance Act 2024) provides a one-time waiver of interest and penalties for GST demands relating to FY 2017-18 to FY 2019-20, subject to payment of the full principal tax amount. This is a significant relief for businesses with outstanding demands from the initial years of GST implementation. We actively identify eligible clients and file Section 128A applications.

Yes. Even with zero transactions, GSTR-1 and GSTR-3B NIL returns must be filed by due dates to avoid late fees and prevent GSTIN suspension. NIL returns are included in all StartupDost maintenance plans. Consistent NIL filing also keeps your compliance rating on the GST portal in good standing.

Online Information and Database Access or Retrieval (OIDAR) services from foreign suppliers — like Google Ads, Facebook Ads, cloud hosting, and SaaS platforms — attract GST in India. If the Indian recipient is a GST-registered business, GST is paid under reverse charge by the recipient at 18%. Unregistered Indian recipients: the foreign supplier must self-register in India or the recipient pays directly.

Non-core amendments (mobile number, email ID, bank account) can be made on the GST portal without officer approval and take effect immediately. Core amendments (legal name, principal place of business, addition of new business places) require officer approval and typically take 7-15 working days. We handle all GST amendment applications as part of our compliance retainer.