GST
GST rates and registration: A practical guide for businesses
Navigate the GST regime with clarity—understand rate slabs, registration thresholds, and compliance requirements.
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The Goods and Services Tax (GST) is India's unified indirect tax regime. Understanding GST rates and registration requirements is essential for every business.
GST Rate Structure (Post GST 2.0 Reforms)
Following the 56th GST Council meeting, the rate structure has been simplified:
| Rate | Categories |
|---|---|
| 0% (Nil) | Essential food items, 33 lifesaving drugs, educational materials, individual health/life insurance |
| 5% | Daily essentials (hair oil, toothpaste, soap), dairy products (butter, ghee, cheese), agricultural inputs, healthcare equipment |
| 18% | Most goods and services, electronics, small cars, motorcycles, appliances |
| 40% | Sin goods (pan masala, aerated beverages, luxury vehicles) |
Rate changes became effective from September 22, 2025. Some items retain historical rates of 12% during transition.
Registration Thresholds
| Category | Threshold for Goods | Threshold for Services |
|---|---|---|
| Regular States | ₹40 lakh | ₹20 lakh |
| Special Category States | ₹20 lakh | ₹10 lakh |
Mandatory registration applies irrespective of turnover for inter-state suppliers, e-commerce operators and sellers, TDS/TCS deductors, casual/non-resident taxable persons, and agents of registered suppliers.
GST Return Filing
| Return | Purpose | Due Date |
|---|---|---|
| GSTR-1 | Outward supplies | 11th of following month |
| GSTR-3B | Summary return with tax payment | 20th of following month |
| GSTR-9 | Annual return | 31st December |
The Composition Scheme allows small businesses with turnover up to ₹1.5 crore to opt for simplified compliance with lower tax rates (1-6% depending on business type).
Input Tax Credit (ITC)
Key rules for claiming ITC include having a valid tax invoice, goods/services being received, supplier having filed GSTR-1, payment being made within 180 days, and invoice appearing in GSTR-2B.
Common Compliance Errors
Mismatch in GSTR-1 and GSTR-3B requires ensuring consistency between returns. Late filing attracts late fees and interest. Wrong HSN codes can lead to disputes and penalties. Not reconciling ITC means claiming only eligible credits. Missing e-invoicing affects businesses above ₹5 crore turnover where it is mandatory.
E-Invoicing Requirements
Businesses with turnover exceeding ₹5 crore must generate e-invoices through the Invoice Registration Portal (IRP). The e-invoice system auto-populates GSTR-1, reducing compliance burden.
Practical Tips
Maintain clean books with proper documentation. Reconcile ITC monthly before filing. Track due dates and set reminders. Keep supplier GSTIN verification records. Use GST-compliant accounting software.
This information is for educational purposes only and does not constitute professional advice. GST rules are subject to frequent amendments.
If the issue is live, it is worth combining this article with our Taxation Support, the GST Calculator, and cleaner process capture through Tally Customisation.
This material is general information. Apply it to your business only after checking the relevant facts, source documents and requirements.