GST Registration — Who Needs It?
- Mandatory registration if:
- Annual turnover exceeds ₹40 Lakh (goods) or ₹20 Lakh (services)
- You sell goods/services inter-state (any turnover)
- You sell on e-commerce platforms (Amazon, Flipkart)
- You're a casual taxable person
- Voluntary registration is beneficial if:
- Your customers are GST-registered businesses (they need your GSTIN for input credit)
- You want to claim input tax credit on your purchases
- It adds credibility and professionalism to your business
GST Rate Structure
Since GST 2.0 took effect on 22 September 2025, there are three main rates. The old 12% and 28% slabs were removed.
| Rate | Category | Examples |
|---|---|---|
| 0% | Exempt | Fresh food, milk, education, individual life and health insurance |
| 5% | Merit rate | Butter, ghee, cheese, namkeen, most medicines, restaurants, hotel rooms up to ₹7,500 a night |
| 18% | Standard rate | Most goods and services: electronics, ACs, TVs, cement, small cars, IT and professional services |
| 40% | De-merit rate | Larger cars and SUVs, motorcycles above 350cc, aerated drinks, cigarettes and pan masala |
Special rates also apply to gold and silver (3%) and rough diamonds (0.25%).
- Most common rate for services18% (IT, consulting, commercial rent, professional services)
- Most common rates for goods5% or 18%
Use our GST Calculator to quickly compute GST on any amount at any rate.
Input Tax Credit (ITC) — Save Money
ITC is the most powerful GST benefit for businesses. You can claim credit for GST paid on business purchases against GST collected on sales.
Example: You charge 18% GST on ₹1,00,000 service = ₹18,000 GST collected. You paid 18% GST on ₹40,000 office rent = ₹7,200 GST paid. Net GST payable = ₹18,000 - ₹7,200 = ₹10,800.
- ITC is available onGoods and services used for business, capital goods, input services
- ITC is NOT available onPersonal use, food & beverages (unless you're in food business), health insurance for non-employees
Composition Scheme — Simplified Compliance
For small businesses with turnover up to ₹1.5 Crore (goods) or ₹50 Lakh (services):
- Flat rate: 1% (manufacturers), 5% (restaurants), 6% (services)
- Quarterly filing instead of monthly
- No ITC can be claimed
- Cannot sell inter-state
Best for: Small manufacturers, restaurants, and local service providers who sell B2C (to consumers, not businesses).
Filing Deadlines
Regular taxpayers:
- GSTR-1 (outward supplies): 11th of next month
- GSTR-3B (summary return): 20th of next month
- GSTR-9 (annual return): December 31st
Composition taxpayers:
- CMP-08: Quarterly (18th of month after quarter)
- GSTR-4 (annual): April 30th
Late filing fee: ₹50 a day (₹20 a day for nil returns), with a maximum that depends on your turnover. Interest at 18% a year applies to tax paid late.