GST in India - Updated Tax Rates, Registration & Filing Guide
🧾 What is GST in India?
Goods and Services Tax (GST) is India’s nationwide indirect tax system that was introduced on 1st July 2017. It simplified the older tax structure by combining various state and central taxes like VAT, service tax, excise duty, and others into one unified system. GST applies to the supply of goods and services at a national level.
🏛️ How GST Works in India
India follows a dual GST model, where both the central and state governments share tax authority. Depending on where the supply happens, GST is split as:
- CGST: Central Goods and Services Tax
- SGST: State Goods and Services Tax
- IGST: Integrated Goods and Services Tax (used for interstate or export/import transactions)
📊 Current GST Rates (2025)
India has multiple tax slabs to accommodate various types of goods and services. Here’s how the current rate structure looks:
| GST Rate | Typical Use Cases |
|---|---|
| 0% | Unpacked food items, books, healthcare, educational services |
| 5% | Transport, essential medicines, restaurants (non-AC) |
| 12% | Processed foods, sanitary products, mobile phones |
| 18% | Software services, electronics, online platforms |
| 28% | Luxury goods, tobacco, high-end automobiles |
Additional cess may apply to certain items under the 28% category.
🏢 Who Needs to Register for GST?
Businesses must register for GST if:
- Their annual turnover crosses ₹40 lakh (₹20 lakh in North-East and hilly states)
- They are involved in interstate trade
- They operate through e-commerce platforms
- They are involved in exports/imports
- They fall under special categories (like agents, aggregators, etc.)
Registration is done online through the official GST portal.
📆 GST Return Filing Overview
GST-registered businesses must file returns regularly. The main types of returns include:
- GSTR-1: Sales details (monthly)
- GSTR-3B: Summary of total tax due (monthly)
- GSTR-9: Annual return (once a year)
Smaller businesses using the composition scheme file returns quarterly with simplified forms.
🧮 Composition Scheme (for Small Businesses)
This optional scheme allows small businesses (turnover under ₹1.5 crore) to pay GST at a fixed rate without detailed paperwork. However, they cannot charge GST on invoices or claim input tax credits.
- Traders: 1%
- Manufacturers: 1%
- Restaurants: 5% (non-alcohol serving)
✅ Benefits of GST for India
- One nation, one tax system
- Easier interstate commerce
- Elimination of cascading taxes
- Faster logistics and supply chain flow
- Transparent and digital compliance
⚠️ Key Challenges in India’s GST System
- Multiple rate slabs create confusion
- Frequent regulatory changes
- Technical glitches in the GST portal
- Dependency on supplier compliance for claiming ITC