{"id":10807,"date":"2023-04-19T14:25:34","date_gmt":"2023-04-19T08:55:34","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10807"},"modified":"2025-03-07T08:20:08","modified_gmt":"2025-03-07T02:50:08","slug":"gst-a-complete-guide","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/","title":{"rendered":"Goods and Service Tax (GST): A Complete Guide"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d0b415063a4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d0b415063a4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_GST_in_India\" >What is GST in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#How_Has_GST_Helped_the_Economy\" >How Has GST Helped the Economy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#History_of_GST_in_India\" >History of GST in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#New_Features_Under_GST_Regime\" >New Features Under GST Regime<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#E-Way_Bills\" >E-Way Bills<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#E-Invoicing_System\" >E-Invoicing System<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#How_Does_GST_Work\" >How Does GST Work?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#How_Did_GST_Change_Things\" >How Did GST Change Things?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Types_of_GST\" >Types of GST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#GST_Rates\" >GST Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Who_Needs_GST\" >Who Needs GST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#How_is_Goods_and_Service_Tax_Paid\" >How is Goods and Service Tax Paid?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Input_Tax_Credit\" >Input Tax Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Who_Can_Claim_ITC\" >Who Can Claim ITC?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Payment_of_GST\" >Payment of GST\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#GST_Login_and_Registration\" >GST Login and Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_meant_by_GST\" >What is meant by GST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Who_started_GST_in_India\" >Who started GST in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#Who_is_eligible_to_pay_GST\" >Who is eligible to pay GST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_GSTIN\" >What is GSTIN?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_GST_percentage\" >What is GST percentage?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_GST_rate_in_India\" >What is GST rate in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_are_18_GST_items\" >What are 18% GST items?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/gst-a-complete-guide\/#What_is_GST_formula\" >What is GST formula?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_GST_in_India\"><\/span><strong>What is GST in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Goods and Services Tax is levied on the sale of goods and services. It was introduced by the government of India to do away with the indirect taxes that were hiking up the final price of the good or service.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The introduction of GST helped reduce the tax burden on the consumer since Goods and Service Tax is only calculated on the value added at every step of the supply chain. In this blog, we discuss how GST works.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Has_GST_Helped_the_Economy\"><\/span>How Has GST Helped the Economy?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>GST eliminated the cascading effect of taxes. This was a major issue with the previous tax system, where already-taxed goods and services were taxed again at the next stage in the supply chain.<\/p>\n<p>With GST, only the value added at each step of the supply chain is taxed, meaning that there is no tax on tax effect and the cascading effect is completely eliminated.<\/p>\n<p>It also removed the tax barriers between states, making inter-state trade easier. Online facilities were also introduced and compliance was made easier, especially for small businesses and startups.<\/p>\n<p>Before GST was introduced, there were many different kinds of indirect taxes, which made it confusing and unnecessarily complicated to calculate and file taxes. All these different indirect taxes were merged into one single, easy to understand GST.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"History_of_GST_in_India\"><\/span><strong>History of GST in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">GST was implemented on the 1st of July 2017, but this new tax regime had been decades in the making. The GST committee was established in 2000 and determined that there is a need for this new kind of tax in 2004.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before Goods and Service Tax was introduced, there were a lot of different indirect taxes that were levied at different stages of the supply chain \u2013 sales tax, entertainment tax, service tax, customs duty, excise duty, and more.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The states and central government collected tax separately, causing the tax burden to be very high. These various indirect taxes also caused manufacturers and suppliers to have to pay tax on tax \u2013 also called the cascading effect.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With the introduction of Goods and Service Tax, these taxes were abolished and collated under one single tax regime, reducing the tax burden and simplifying tax payments.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"New_Features_Under_GST_Regime\"><\/span>New Features Under GST Regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There were several new systems and processes introduced under the GST regime to make it easier for businesses to calculate and file taxes.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"E-Way_Bills\"><\/span><strong>E-Way Bills<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>An e-way bill is an electronic document introduced under the Goods and Services Tax (GST) regime in India. It is a mandatory document that must be generated online by a registered person who is responsible for the movement of goods worth more than Rs. 50,000 within or outside a state.<\/p>\n<p>The e-way bill contains:<\/p>\n<ul>\n<li>Details of the goods being transported (name of the supplier and recipient)<\/li>\n<li>GST identification numbers (GSTIN) of both parties<\/li>\n<li><a href=\"https:\/\/razorpay.com\/blog\/invoice-number\/\">Invoice number<\/a><\/li>\n<li>Date of invoice<\/li>\n<li>Value of the goods<\/li>\n<li>Place of delivery<\/li>\n<li>Details of mode of transport (vehicle number, transporter ID)<\/li>\n<li>Expected date and time of delivery<\/li>\n<\/ul>\n<p>The purpose of the e-way bill is to ensure proper documentation and tracking of the movement of goods to prevent tax evasion and ensure compliance with the GST regulations. It also helps reduce the time and cost of transportation by providing a single document for the entire transportation process.<\/p>\n<p>The e-way bill can be generated through the GST portal, and once generated, it must be carried by the person in charge of the transportation of the goods.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"E-Invoicing_System\"><\/span><strong>E-Invoicing System<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>E-invoicing is an electronic invoicing system that was introduced under the Goods and Services Tax (GST) regime in India. It is a system that enables the generation of electronic invoices in a standard format, which is validated by the GSTN (Goods and Services Tax Network) for its authenticity and accuracy.<\/p>\n<p>Under the e-invoicing system, businesses are required to generate invoices on their internal systems (ERP, accounting software, etc.) in a specific format as prescribed by the GST council. The <a href=\"https:\/\/razorpay.com\/blog\/what-is-invoice\/\">invoices<\/a> are then uploaded to the GST portal, which validates the invoices and generates a unique invoice reference number (IRN) along with a QR code.<\/p>\n<p>The e-invoicing system streamlined the invoice generation process, reduce errors, and enhance compliance with GST regulations. It also helps reduce the duplication of invoices, reducing the incidence of fake invoices, and facilitate matching input tax credit.<\/p>\n<p>The e-invoicing system is applicable to taxpayers having an aggregate turnover of more than Rs. 50 crores in any financial year. The system is implemented in a phased manner, and the government has provided a timeline for its implementation based on the turnover of taxpayers.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Does_GST_Work\"><\/span><strong>How Does GST Work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before we understand how Goods and Service Tax works, let\u2019s take a look at how tax was calculated with the old tax regime, before GST was introduced.\u00a0<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\">The producer purchases raw materials at Rs 50 and adds value of Rs 50.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">\u00a0Tax is calculated on the total price of Rs 100. 10% tax rate means that the tax on the product is Rs 10.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The producer sells his product to the wholesaler at Rs 110.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The wholesaler adds Rs 10 value to the product, bringing cost of the product to Rs 120<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Tax is now calculated on the total price of Rs 120 \u2013 even though Rs 100 out of the Rs 120 has <\/span>already been taxed at the previous stage.<\/li>\n<li><span style=\"font-weight: 400;\">The tax that the wholesaler will add to his product is 10% of 120, which is Rs 12<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The retailer purchases the product at Rs 132, and adds value of Rs 10, bringing the price now to Rs 142<\/span><\/li>\n<li><span style=\"font-weight: 400;\">He adds tax of Rs 14.2 on this price, even though Rs 120 out of the Rs 142 has already been taxed by the wholesaler<\/span><\/li>\n<li><strong><span style=\"font-weight: 400;\">Finally, the consumer has to pay Rs 156.2 for the product, out of which Rs 36.2 is the tax burden<\/span><\/strong><\/li>\n<\/ol>\n<table>\n<tbody>\n<tr>\n<td><i><span style=\"font-weight: 400;\">Supply Chain<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Purchase Price<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">+<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Value Added<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Cost Before Tax<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">+<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Tax (10%)\u00a0<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Final Price<\/span><\/i><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Producer<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">100<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10<\/span><\/td>\n<td><span style=\"font-weight: 400;\">110<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Wholesaler<\/span><\/td>\n<td><span style=\"font-weight: 400;\">110<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">120<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12<\/span><\/td>\n<td><span style=\"font-weight: 400;\">132<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Retailer<\/span><\/td>\n<td><span style=\"font-weight: 400;\">132<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">142<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">14.2<\/span><\/td>\n<td><span style=\"font-weight: 400;\">156.2<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Consumer<\/span><\/td>\n<td><b>156.2<\/b><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Under the old regime, each person in the supply chain pays tax on the total price of the product at each stage, causing double taxation.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_Did_GST_Change_Things\"><\/span>How Did GST Change Things?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The introduction of GST changed one very important thing \u2013 it is not the entire cost of the product that is taxed at each stage, but only the <\/span><b>value added at each stage. <\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\">The Producer adds value of Rs 50 to the raw materials that he had purchased for Rs 50, bringing the price of the product before tax to Rs 100<\/span><\/li>\n<li><span style=\"font-weight: 400;\">If we assume GST rate is 10% for this particular product, the GST on the value added by Producer would be 10% of Rs 50, which is Rs 5<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The Producer sells the product to the Wholesaler for Rs 105 (100+5)<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The Wholesaler adds his value of Rs 10, and taxes that value at Rs 1, bringing the price at this stage to Rs 116 (115+1).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The Wholesaler sells the product to the Retailer at Rs 116<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The Retailer adds value of Rs 10, and taxes that value at Rs 1, and the final price of the product is now Rs 127 (116+10+1)<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The consumer has to now pay Rs 127 for the product, out of which tax is only Rs 7<\/span><\/li>\n<\/ol>\n<table>\n<tbody>\n<tr>\n<td><i><span style=\"font-weight: 400;\">Supply Chain<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Purchase Price<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">+<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Value Added<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Cost Before Tax<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">+<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">GST (10% on value added)\u00a0<\/span><\/i><\/td>\n<td><i><span style=\"font-weight: 400;\">Final Price<\/span><\/i><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Producer<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">100<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5<\/span><\/td>\n<td><span style=\"font-weight: 400;\">105<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Wholesaler<\/span><\/td>\n<td><span style=\"font-weight: 400;\">105<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">115<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">1<\/span><\/td>\n<td><span style=\"font-weight: 400;\">116<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Retailer<\/span><\/td>\n<td><span style=\"font-weight: 400;\">116<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10<\/span><\/td>\n<td><i><span style=\"font-weight: 400;\">=<\/span><\/i><\/td>\n<td><span style=\"font-weight: 400;\">126<\/span><\/td>\n<td><span style=\"font-weight: 400;\">+<\/span><\/td>\n<td><span style=\"font-weight: 400;\">1<\/span><\/td>\n<td><span style=\"font-weight: 400;\">126<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Consumer<\/span><\/td>\n<td><b>127<\/b><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">This is the GST model of taxation.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_GST\"><\/span><strong>Types of GST<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are four major types of Goods and Service Tax in our country.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>CGST<\/b><span style=\"font-weight: 400;\"> &#8211; Central Goods and Services Tax is charged on goods and services sold within one state, and goes to the central government.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>SGST<\/b><span style=\"font-weight: 400;\"> &#8211; State Goods and Services Tax charged on goods and services sold within one state and goes to the state government.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>IGST<\/b><span style=\"font-weight: 400;\"> &#8211; Integrated Goods and Services Tax is charged on goods and services sold between states.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>UTGST<\/b><span style=\"font-weight: 400;\"> &#8211; Union Territory Goods and Services Tax is charged on goods and services sold in Union Territories.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"GST_Rates\"><\/span><strong>GST Rates<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are also different rates of Goods and Service Tax for different types of products.\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-10809\" src=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/blog-content\/uploads\/2023\/01\/GST-rates.png\" alt=\"gst rates\" width=\"1098\" height=\"749\" srcset=\"https:\/\/blog.razorpay.in\/wp-content\/uploads\/2023\/01\/GST-rates.png 1098w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2023\/01\/GST-rates-300x205.png 300w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2023\/01\/GST-rates-1024x699.png 1024w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2023\/01\/GST-rates-768x524.png 768w\" sizes=\"auto, (max-width: 1098px) 100vw, 1098px\" \/><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>GST<\/b><\/td>\n<td><b>Product Types<\/b><\/td>\n<td><b>Product Examples<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">0%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Basic essentials<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Milk, eggs, bread, fruits, vegetables<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">0.25%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Precious stones<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Diamonds, synthetic precious stones<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">3%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Precious metals<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Gold, silver, pearls, imitation jewelry<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Daily use<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Small restaurants, tea, coffee, train tickets<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fancy use<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Dates, oils, preserved meats, pasta, jams, and fruit jelly<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fancier use<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Pastries, cakes, ice creams, artificial mineral water<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">28%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Luxury\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Soda, tobacco products, luxury cars, and hotel rooms<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"Who_Needs_GST\"><\/span><strong>Who Needs GST?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-offset-key=\"1v7i3-75-0\"> GST<\/span><span data-offset-key=\"1v7i3-76-0\"> has<\/span><span data-offset-key=\"1v7i3-77-0\"> had<\/span><span data-offset-key=\"1v7i3-78-0\"> a<\/span><span data-offset-key=\"1v7i3-79-0\"> positive<\/span><span data-offset-key=\"1v7i3-80-0\"> impact<\/span><span data-offset-key=\"1v7i3-81-0\"> on<\/span><span data-offset-key=\"1v7i3-82-0\"> all<\/span><span data-offset-key=\"1v7i3-83-0\"> stakeholders<\/span><span data-offset-key=\"1v7i3-84-0\">,<\/span><span data-offset-key=\"1v7i3-85-0\"> especially<\/span><span data-offset-key=\"1v7i3-86-0\"> consumers<\/span><span data-offset-key=\"1v7i3-87-0\">,<\/span><span data-offset-key=\"1v7i3-88-0\"> as<\/span><span data-offset-key=\"1v7i3-89-0\"> it<\/span><span data-offset-key=\"1v7i3-90-0\"> has<\/span><span data-offset-key=\"1v7i3-91-0\"> reduced<\/span><span data-offset-key=\"1v7i3-92-0\"> the<\/span><span data-offset-key=\"1v7i3-93-0\"> overall<\/span><span data-offset-key=\"1v7i3-94-0\"> cost<\/span><span data-offset-key=\"1v7i3-95-0\"> of<\/span><span data-offset-key=\"1v7i3-96-0\"> goods<\/span><span data-offset-key=\"1v7i3-97-0\"> and<\/span><span data-offset-key=\"1v7i3-98-0\"> services<\/span><span data-offset-key=\"1v7i3-99-0\">.<\/span><span data-offset-key=\"1v7i3-100-0\"> As<\/span><span data-offset-key=\"1v7i3-101-0\"> businesses<\/span><span data-offset-key=\"1v7i3-102-0\"> pay<\/span><span data-offset-key=\"1v7i3-103-0\"> lower<\/span><span data-offset-key=\"1v7i3-104-0\"> taxes<\/span><span data-offset-key=\"1v7i3-105-0\">,<\/span><span data-offset-key=\"1v7i3-106-0\"> they<\/span><span data-offset-key=\"1v7i3-107-0\"> are<\/span><span data-offset-key=\"1v7i3-108-0\"> able<\/span><span data-offset-key=\"1v7i3-109-0\"> to<\/span><span data-offset-key=\"1v7i3-110-0\"> pass<\/span><span data-offset-key=\"1v7i3-111-0\"> on<\/span><span data-offset-key=\"1v7i3-112-0\"> the<\/span><span data-offset-key=\"1v7i3-113-0\"> savings<\/span><span data-offset-key=\"1v7i3-114-0\"> to<\/span><span data-offset-key=\"1v7i3-115-0\"> the<\/span><span data-offset-key=\"1v7i3-116-0\"> consumers<\/span><span data-offset-key=\"1v7i3-117-0\">.<\/span><span data-offset-key=\"1v7i3-118-0\"> This<\/span><span data-offset-key=\"1v7i3-119-0\"> has<\/span><span data-offset-key=\"1v7i3-120-0\"> led<\/span><span data-offset-key=\"1v7i3-121-0\"> to<\/span><span data-offset-key=\"1v7i3-122-0\"> an<\/span><span data-offset-key=\"1v7i3-123-0\"> increase<\/span><span data-offset-key=\"1v7i3-124-0\"> in<\/span><span data-offset-key=\"1v7i3-125-0\"> consumer<\/span><span data-offset-key=\"1v7i3-126-0\"> spending<\/span><span data-offset-key=\"1v7i3-127-0\">,<\/span><span data-offset-key=\"1v7i3-128-0\"> which<\/span><span data-offset-key=\"1v7i3-129-0\"> in<\/span><span data-offset-key=\"1v7i3-130-0\"> turn<\/span><span data-offset-key=\"1v7i3-131-0\"> has<\/span><span data-offset-key=\"1v7i3-132-0\"> led<\/span><span data-offset-key=\"1v7i3-133-0\"> to<\/span><span data-offset-key=\"1v7i3-134-0\"> an<\/span><span data-offset-key=\"1v7i3-135-0\"> increase<\/span><span data-offset-key=\"1v7i3-136-0\"> in<\/span><span data-offset-key=\"1v7i3-137-0\"> economic<\/span><span data-offset-key=\"1v7i3-138-0\"> growth<\/span><span data-offset-key=\"1v7i3-139-0\">.<\/span><\/p>\n<p><span data-offset-key=\"1v7i3-142-0\">Business<\/span><span data-offset-key=\"1v7i3-143-0\">es<\/span><span data-offset-key=\"1v7i3-144-0\"> have<\/span><span data-offset-key=\"1v7i3-145-0\"> also<\/span><span data-offset-key=\"1v7i3-146-0\"> benef<\/span><span data-offset-key=\"1v7i3-147-0\">ited<\/span><span data-offset-key=\"1v7i3-148-0\"> from<\/span><span data-offset-key=\"1v7i3-149-0\"> the<\/span><span data-offset-key=\"1v7i3-150-0\"> introduction<\/span><span data-offset-key=\"1v7i3-151-0\"> of<\/span><span data-offset-key=\"1v7i3-152-0\"> GST<\/span><span data-offset-key=\"1v7i3-153-0\">,<\/span><span data-offset-key=\"1v7i3-154-0\"> as<\/span><span data-offset-key=\"1v7i3-155-0\"> the<\/span><span data-offset-key=\"1v7i3-156-0\"> single<\/span><span data-offset-key=\"1v7i3-157-0\"> tax<\/span><span data-offset-key=\"1v7i3-158-0\"> system<\/span><span data-offset-key=\"1v7i3-159-0\"> has<\/span><span data-offset-key=\"1v7i3-160-0\"> reduced<\/span><span data-offset-key=\"1v7i3-161-0\"> the<\/span><span data-offset-key=\"1v7i3-162-0\"> paperwork<\/span><span data-offset-key=\"1v7i3-163-0\"> and<\/span><span data-offset-key=\"1v7i3-164-0\"> compliance<\/span><span data-offset-key=\"1v7i3-165-0\"> burden<\/span><span data-offset-key=\"1v7i3-166-0\"> on<\/span><span data-offset-key=\"1v7i3-167-0\"> them<\/span><span data-offset-key=\"1v7i3-168-0\">.<\/span><span data-offset-key=\"1v7i3-169-0\"> This<\/span><span data-offset-key=\"1v7i3-170-0\"> has<\/span><span data-offset-key=\"1v7i3-171-0\"> allowed<\/span><span data-offset-key=\"1v7i3-172-0\"> them<\/span><span data-offset-key=\"1v7i3-173-0\"> to<\/span><span data-offset-key=\"1v7i3-174-0\"> focus<\/span><span data-offset-key=\"1v7i3-175-0\"> more<\/span><span data-offset-key=\"1v7i3-176-0\"> on<\/span><span data-offset-key=\"1v7i3-177-0\"> their<\/span><span data-offset-key=\"1v7i3-178-0\"> core<\/span><span data-offset-key=\"1v7i3-179-0\"> operations<\/span><span data-offset-key=\"1v7i3-180-0\">,<\/span><span data-offset-key=\"1v7i3-181-0\"> resulting<\/span><span data-offset-key=\"1v7i3-182-0\"> in<\/span><span data-offset-key=\"1v7i3-183-0\"> a<\/span><span data-offset-key=\"1v7i3-184-0\"> more<\/span><span data-offset-key=\"1v7i3-185-0\"> efficient<\/span><span data-offset-key=\"1v7i3-186-0\"> and<\/span><span data-offset-key=\"1v7i3-187-0\"> streamlined<\/span><span data-offset-key=\"1v7i3-188-0\"> business<\/span><span data-offset-key=\"1v7i3-189-0\">.<\/span><\/p>\n<p><span data-offset-key=\"1v7i3-192-0\">The<\/span><span data-offset-key=\"1v7i3-193-0\"> government<\/span><span data-offset-key=\"1v7i3-194-0\"> too<\/span><span data-offset-key=\"1v7i3-195-0\"> has<\/span><span data-offset-key=\"1v7i3-196-0\"> benefited<\/span><span data-offset-key=\"1v7i3-197-0\">\u00a0from<\/span><span data-offset-key=\"1v7i3-198-0\"> the<\/span><span data-offset-key=\"1v7i3-199-0\"> introduction<\/span><span data-offset-key=\"1v7i3-200-0\"> of<\/span><span data-offset-key=\"1v7i3-201-0\"> GST<\/span><span data-offset-key=\"1v7i3-202-0\">,<\/span><span data-offset-key=\"1v7i3-203-0\"> as<\/span><span data-offset-key=\"1v7i3-204-0\"> the<\/span><span data-offset-key=\"1v7i3-205-0\"> revenue<\/span><span data-offset-key=\"1v7i3-206-0\"> collection<\/span><span data-offset-key=\"1v7i3-207-0\"> from<\/span><span data-offset-key=\"1v7i3-208-0\"> taxes<\/span><span data-offset-key=\"1v7i3-209-0\"> has<\/span><span data-offset-key=\"1v7i3-210-0\"> increased<\/span><span data-offset-key=\"1v7i3-211-0\"> significantly<\/span><span data-offset-key=\"1v7i3-212-0\">.<\/span><span data-offset-key=\"1v7i3-213-0\"> This<\/span><span data-offset-key=\"1v7i3-214-0\"> has<\/span><span data-offset-key=\"1v7i3-215-0\"> enabled<\/span><span data-offset-key=\"1v7i3-216-0\"> the<\/span><span data-offset-key=\"1v7i3-217-0\"> government<\/span><span data-offset-key=\"1v7i3-218-0\"> to<\/span><span data-offset-key=\"1v7i3-219-0\"> invest<\/span><span data-offset-key=\"1v7i3-220-0\"> more<\/span><span data-offset-key=\"1v7i3-221-0\"> in<\/span><span data-offset-key=\"1v7i3-222-0\"> public<\/span><span data-offset-key=\"1v7i3-223-0\"> welfare<\/span><span data-offset-key=\"1v7i3-224-0\"> and<\/span><span data-offset-key=\"1v7i3-225-0\"> infrastructure<\/span><span data-offset-key=\"1v7i3-226-0\">,<\/span><span data-offset-key=\"1v7i3-227-0\"> which<\/span><span data-offset-key=\"1v7i3-228-0\"> has<\/span><span data-offset-key=\"1v7i3-229-0\"> benef<\/span><span data-offset-key=\"1v7i3-230-0\">itted<\/span><span data-offset-key=\"1v7i3-231-0\"> the<\/span><span data-offset-key=\"1v7i3-232-0\"> overall<\/span><span data-offset-key=\"1v7i3-233-0\"> economy<\/span><span data-offset-key=\"1v7i3-234-0\">.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_is_Goods_and_Service_Tax_Paid\"><\/span><strong>How is Goods and Service Tax Paid?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before we understand how GST is paid by businesses, let\u2019s look at an important concept.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Input_Tax_Credit\"><\/span><strong>Input Tax Credit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Input Tax Credit (ITC) is one of the core reasons why GST has been so beneficial across the supply chain.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To understand ITC, let\u2019s use an example.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Geet buys fabric (raw material) worth Rs 400 from her supplier and pays tax worth Rs 100.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Rs 100 that Geet paid as tax on the purchase of raw materials is called <\/span><b>input tax.\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Geet converts the fabric (raw material) into shirts (product), thus adding her value of Rs 300, bringing the total value of her product to Rs 800 (Rs 400 + Rs 100 + Rs 300).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Geet then sells her shirts to her customers for Rs 950, after adding tax of Rs 150.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The tax that Geet collects from her customers is called <\/span><b>output tax \u2013 <\/b><span style=\"font-weight: 400;\">which in this case is Rs 150.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Geet paid Rs 100 as tax and is now collecting Rs 150 as tax from her customers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s tally the total amount of tax paid by all parties in this scenario.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">Party<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Tax Paid<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Geet\u2019s Supplier<\/span><\/td>\n<td><span style=\"font-weight: 400;\">&#8211;<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Geet<\/span><\/td>\n<td><span style=\"font-weight: 400;\">100 to Geet\u2019s Supplier<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Geet\u2019s customers<\/span><\/td>\n<td><span style=\"font-weight: 400;\">150 to Geet<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Total tax<\/b><\/td>\n<td><b>250<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">At the end of every month, both Geet\u2019s supplier and Geet will pay their taxes to the government. Under this model, the government would be collecting both 100 and 150 \u2013 causing double taxation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Remember, a part of the Rs 150 that Geet\u2019s customers paid has already been paid by Geet to her supplier!\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">The rule of ITC states that Geet can claim credit for the amount of tax that she already paid on input.<\/span><\/p><\/blockquote>\n<p>In this case, it is Rs 100.<\/p>\n<p><span style=\"font-weight: 400;\">She can deduct Rs 100 from Rs 150, and will be liable to pay only Rs 50 as GST to the government.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Who_Can_Claim_ITC\"><\/span><strong>Who Can Claim ITC?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Input Tax Credit can be claimed by the business as long as the raw materials that were purchased were used for the <\/span><b>furtherance of business. <\/b><span style=\"font-weight: 400;\">This means that they have to be used in creating the goods or services that the business sells.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These can be\u00a0<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Raw Materials<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Services<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Capital Goods<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Payment_of_GST\"><\/span><strong>Payment of GST\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Goods and Service Tax can be paid online as well as offline.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Regardless of the method of payment, businesses must first calculate the amount of tax to be paid after deducting appropriate input taxes as per the Input Tax Credit policy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After the final tax <a href=\"https:\/\/razorpay.com\/learn\/what-is-liability-in-accounting\/\">liability<\/a> is calculated, a GST challan must be generated. There are two ways to do this:\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\"><b>Before GST login<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You can generate a Goods and Service Tax challan directly without having to login.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Go to this link: <\/span><a href=\"https:\/\/services.gst.gov.in\/services\/quicklinks\/payments\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">https:\/\/services.gst.gov.in\/services\/quicklinks\/payments<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Or follow these steps: <\/span><a href=\"https:\/\/www.gst.gov.in\/\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">https:\/\/www.gst.gov.in\/<\/span><\/a><span style=\"font-weight: 400;\"> &gt; Services &gt; Payments &gt; Create Challan<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fill out all the fields and download your challan.\u00a0<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>After GST login<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You can also choose to generate the challan after logging into the portal.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After logging into the portal, you will find the option to create a challan on your dashboard. Fill out all the fields and download your challan.<\/span><\/p>\n<p><b>Goods and Service Tax must be paid before 20 days from the end of the month, and your GST challan expires in 15 days.\u00a0<\/b><\/p>\n<h2><span class=\"ez-toc-section\" id=\"GST_Login_and_Registration\"><\/span><strong>GST Login and Registration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Any business that earns a total income of Rs 20 lakhs or more in a financial year is liable to pay Goods and Service Tax and has to register with the <\/span><a href=\"https:\/\/www.gst.gov.in\/\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">GST portal<\/span><\/a><span style=\"font-weight: 400;\">. Upon registration, each business will receive a unique GSTIN which has to be entered into the GST challan every time GST is paid.<\/span><\/p>\n<p><b>Related Read: <\/b><a href=\"https:\/\/razorpay.com\/learn\/gst-on-clothes\/\u201d\"><b>GST On Clothes, Textiles and Apparel Products<\/b><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_meant_by_GST\"><\/span>What is meant by GST?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>GST, or Goods and Services Tax, is an indirect tax on the supply and manufacture of goods and services. It did away with the previous tax regime which caused cascading effect across the supply chain. GST system also reduced tax burden on the consumer and made it easier to pay taxes.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Who_started_GST_in_India\"><\/span>Who started GST in India?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Atal Bihari Vajpayee first introduced the idea in 2000, following which he created a committee to analyze the need for a new system of indirect taxes. This task force determined in 2004 that the introduction of GST would be beneficial to the country. Finally, on the 1st of July 2017, the new GST system was introduced.<br \/>\nIGST - Integrated Goods and Services Tax is charged on goods and services sold between states.<br \/>\nUTGST - Union Territory Goods and Services Tax is charged on goods and services sold in Union Territories. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Who_is_eligible_to_pay_GST\"><\/span>Who is eligible to pay GST?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Any business that has a turnover of Rs 20 lakh or more in a financial year is liable to pay GST.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-4\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_GSTIN\"><\/span>What is GSTIN?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>GSTIN is a unique identification number given to every business when they register on the GST portal. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-5\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_GST_percentage\"><\/span>What is GST percentage?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There are different percentage of GST for different products. Basic essentials like milk, eggs, bread and medicines are not taxed, therefore the GST percentage is 0%. Goods and services that we use daily like coffee and tea are taxed at 5%. Fancy goods like dates, jams and pasta are taxed at 18%, while luxury goods like hotel rooms and luxury cars are taxed at 28%.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-6\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_GST_rate_in_India\"><\/span>What is GST rate in India?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>GST rates start at 0% for basic essentials like bread and milk. It goes up to 28% for luxury goods and services like 5-star hotel rooms and luxury cars. There are also rates of 5%, 12%, 18% and more.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-7\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_are_18_GST_items\"><\/span>What are 18% GST items?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>18% GST is imposed on fancy goods and services like pastries, cakes, ice creams, artificial mineral water. These are not required as basic essentials but are consumed once in a while.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-8\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_GST_formula\"><\/span> What is GST formula?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Formula to calculate the final price of product after adding GST is:<br \/>\nPrice of the product + applicable GST = Final price of product<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_gst&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX<\/a><\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is GST in India? Goods and Services Tax is levied on the sale of goods and services. It was introduced by the government of India to do away with the indirect taxes that were hiking up the final price of the good or service. The introduction of GST helped reduce the tax burden on<\/p>\n","protected":false},"author":106,"featured_media":11121,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[203],"class_list":{"0":"post-10807","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-gst"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10807"}],"version-history":[{"count":5,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10807\/revisions"}],"predecessor-version":[{"id":21312,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10807\/revisions\/21312"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/11121"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}