GST Complete Guide
Structured reference for accountants, GST executives and interview preparation — taxpayer types, returns, journal entries, exports, TDS/TCS, scenario questions and portal navigation.
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9Taxpayer categories
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20+GST forms covered
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40+Interview questions
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10Journal entry types
1. Types of GST Taxpayers
1. Regular Taxpayer
Pays tax at normal GST rates and can claim ITC. Manufacturers, traders, service providers, e-commerce sellers.
GSTR-1GSTR-3BGSTR-9
2. Composition Taxpayer
Fixed % of turnover. Cannot collect GST from customers, cannot claim ITC.
CMP-08GSTR-4
3. Casual Taxable Person (CTP)
Occasionally supplies in a state with no fixed place of business. Temporary registration; advance tax often required.
4. Non-Resident Taxable Person (NRTP)
Outside India, occasionally supplies in India. Temporary registration + advance tax.
5. Input Service Distributor (ISD)
Receives common input service invoices and distributes eligible ITC to branches with different GSTINs.
6. Tax Deductor (TDS)
Notified govt bodies deducting GST TDS from supplier payments.
GSTR-7
7. Tax Collector (TCS)
E-commerce operators collecting TCS on platform supplies.
GSTR-8
8. E-commerce Operator
Owns/operates digital marketplace facilitating third-party sales.
9. SEZ Developer / Unit
Supplies to SEZ may be zero-rated; refunds available subject to conditions.
2. Regular vs Composition Taxpayer
| Particular | Regular | Composition |
|---|---|---|
| GST charged to customer | Yes | No |
| Input Tax Credit | Available | Not available |
| Tax rate | Normal (5–28%) | Fixed composition rate |
| Returns | GSTR-1, 3B, Annual | CMP-08, GSTR-4 |
| Compliance | Higher | Lower |
| Suitable for | Medium/large / need ITC | Eligible small businesses |
Regular example: Purchase ₹1L + 18% GST, Sale ₹1.5L + 18% GST → Net payable = ₹9,000
Composition example: Annual sales ₹40L @ 1% → GST payable = ₹40,000
3. GST Returns & Important Forms
| Form | Purpose | Who | Frequency |
|---|---|---|---|
| GSTR-1 | Outward supplies | Regular | Monthly/Quarterly |
| GSTR-3B | Summary & tax payment | Regular | Monthly/Quarterly |
| GSTR-4 | Annual return | Composition | Annually |
| CMP-08 | Tax payment statement | Composition | Quarterly |
| GSTR-7 | TDS return | TDS deductors | Monthly |
| GSTR-8 | TCS return | E-commerce | Monthly |
| GSTR-9 | Annual return | Eligible regular | Annually |
| GSTR-9C | Reconciliation | Specified | Annually |
| GSTR-10 | Final return | Cancelled reg. | One-time |
Most used: GSTR-1 • GSTR-3B • GSTR-9 • CMP-08 • GSTR-4 • GSTR-7 • GSTR-8 • PMT-06 • DRC-03 • RFD-01 • E-Way Bill • E-Invoice
4. Typical GST Filing Workflow
- Collect sales and purchase invoices.
- Record in accounting software (Tally, Busy, Zoho Books etc.).
- Reconcile purchases with GSTR-2B for ITC eligibility.
- Prepare GSTR-1 from sales data.
- Compute liability in GSTR-3B.
- Generate challan (PMT-06) and pay tax due.
- File returns within due date.
- Monthly reconciliations; annual GSTR-9 / 9C where applicable.
- Respond to notices; maintain records for audit.
5. Key GST Concepts
Types of GST
- CGST – Central (intrastate)
- SGST – State (intrastate)
- IGST – Interstate + imports
- UTGST – Union Territory
Input Tax Credit
Purchase GST ₹18,000 − Sales GST ₹30,000 → Net payable ₹12,000
| Term | Meaning |
|---|---|
| RCM | Recipient pays GST for notified supplies |
| HSN / SAC | Goods / services classification codes |
| E-Way Bill | Required for goods movement above threshold |
| E-Invoice | IRN from Invoice Registration Portal |
| GSTIN | 15-digit ID (State + PAN + Entity + Z + Check) |
| QRMP | Quarterly Return, Monthly Payment |
| Zero-Rated | Exports/SEZ — 0% GST, ITC available |
| Exempt | No GST charged; ITC generally not available |
| Composite Supply | Naturally bundled; rate of principal supply |
| Mixed Supply | Not bundled; highest rate among items |
| Bill of Supply | Issued when GST is not charged |
6. Common GST Journal Entries
Local Purchase (Credit) — ₹1,00,000 + 18% GST
| Particulars | Debit | Credit |
|---|---|---|
| Purchase A/c | 1,00,000 | |
| Input CGST A/c | 9,000 | |
| Input SGST A/c | 9,000 | |
| To Supplier A/c | 1,18,000 |
Local Sales — ₹1,50,000 + 18% GST
| Particulars | Debit | Credit |
|---|---|---|
| Customer A/c | 1,77,000 | |
| To Sales A/c | 1,50,000 | |
| To Output CGST A/c | 13,500 | |
| To Output SGST A/c | 13,500 |
GST Payment (Output ₹27,000 − Input ₹18,000 = ₹9,000)
Adjust ITC then pay:
| Particulars | Debit | Credit |
|---|---|---|
| Output CGST / SGST | 27,000 | |
| To Input CGST / SGST | 18,000 | |
| To GST Payable | 9,000 | |
| GST Payable A/c | 9,000 | |
| To Bank A/c | 9,000 |
Flow: Purchase → Input GST (Dr) → Sales → Output GST (Cr) → Output − Input = Net Payable → Payment
7. Common GST Interview Questions
1. What is GST?
Indirect tax on supply of goods and services in India; replaced VAT, Service Tax, Excise Duty with a unified system.
2. CGST vs SGST vs IGST?
CGST + SGST for intrastate; IGST for interstate and imports.
3. What is ITC?
Credit for GST paid on purchases, set off against GST on sales (subject to Section 16 conditions).
4. GSTR-1 vs GSTR-3B?
GSTR-1: invoice-wise outward supplies. GSTR-3B: summary return where tax is paid.
5. Composition Scheme?
Simplified scheme: fixed rate, no ITC, cannot collect GST separately, simpler compliance.
6. Reverse Charge (RCM)?
Recipient pays GST instead of supplier for notified supplies.
7. GSTIN structure?
22ABCDE1234F1Z5 → State + PAN + Entity + Z + Check digit.
8. QRMP Scheme?
Quarterly Return Monthly Payment for eligible small taxpayers.
9. Zero-Rated vs Exempt?
Zero-rated: 0% GST, ITC available (exports). Exempt: no GST, ITC generally not available.
10. Practical calc
Purchase ₹1L + 18%, Sale ₹1.5L + 18% → Net GST payable ₹9,000.
8. Scenario-Based Questions
GSTR-1 ₹25L vs GSTR-3B ₹24L?
Compare invoices, check missed/duplicates, credit/debit notes, amend per law, reconcile books with both returns.
Supplier charged GST but did not upload invoice — claim ITC?
Only if Section 16 conditions met. Reconcile with GSTR-2B; follow up with supplier to upload.
Late GST payment?
Interest + late fee + possible notices.
When is ITC blocked?
Personal expenses, certain vehicles, club memberships, food (mostly), lost/destroyed goods, gifts — Section 17(5).
How to reconcile GSTR-2B?
Download → match purchase register → missing/duplicate → GST amounts → contact suppliers → claim eligible ITC only.
Can IGST credit pay SGST?
Yes after IGST liability; remaining IGST credit → CGST then SGST in prescribed order.
9. Advanced Topics
Section 16 – ITC eligibility
- Valid tax invoice
- Goods/services received
- Tax paid by supplier to government
- Return filed
- Claimed within time limit
ITC utilisation order
- IGST → IGST → CGST → SGST
- CGST → CGST → IGST (not SGST)
- SGST → SGST → IGST (not CGST)
| Tax Invoice | Bill of Supply | |
|---|---|---|
| GST charged | Yes | No |
| Used for | Taxable supplies | Exempt / Composition |
| ITC to recipient | May be available | Generally no |
10. Exports under GST
Exports are zero-rated supplies.
LUT / Bond (most common)
No GST on export invoice; claim/refund eligible ITC. Avoids blocking working capital.
With payment of IGST
Pay IGST on export invoice, then claim refund of IGST paid.
Merchant export @ 0.1%
Concessional rate on supply to registered merchant exporter (not on the export itself).
Key point: Zero-rated → ITC available. Exempt → ITC generally not available.
11. GST TDS & TCS
| GST TDS (Sec 51) | GST TCS (Sec 52) | |
|---|---|---|
| Who | Govt / PSU / notified buyers | E-commerce operators |
| Rate | 2% | Up to 1% |
| On | Taxable value (excl. GST) | Net taxable supplies |
| Return | GSTR-7 | GSTR-8 |
| Credit | Electronic Cash Ledger (not ITC) | Electronic Cash Ledger (not ITC) |
Contract ₹10L + GST ₹1.8L → TDS @2% = ₹20,000 → Supplier paid ₹11.6L; ₹20k in Cash Ledger
Memory: Sec 51 → Govt buyer → TDS → GSTR-7 → Cash Ledger | Sec 52 → ECO → TCS → GSTR-8 → Cash Ledger
12. Scrap Sale — Income Tax TCS & GST
- IT TCS 206C(1): Seller collects 0.1% TCS on scrap
- Form 27C: Buyer using scrap for manufacturing (not trading) can avoid TCS
- GST: Scrap is taxable; charge applicable GST (often 18%)
Traders buying scrap for resale cannot use Form 27C.
13. GST Portal — Monthly Checklist
Returns
GSTR-1, GSTR-3B, GSTR-9
Auto-drafted
GSTR-2A (dynamic), GSTR-2B (static — primary for ITC)
Ledgers
Cash • Credit • Liability
Payment / Refund
PMT-06, RFD-01
Interview answer: Review GSTR-2B → Prepare GSTR-1 → Compute GSTR-3B → Check ledgers → Pay via PMT-06 → File on time.
14. Interview Tips
- Be solid on journal entries and CGST/SGST/IGST calculations.
- Practice GSTR-1 / GSTR-3B from sample data.
- Know Section 16 conditions and Section 17(5) blocked credits.
- Understand e-way bill, e-invoice, RCM, QRMP.
- 0–2 yrs: focus on calculations, returns, Tally workflows.
- Experienced: scenarios, 2B reconciliation, notices, ITC utilisation order.
Closing answer: “I have a strong understanding of GST compliance including GSTR-1, GSTR-3B, ITC reconciliation and accounting entries. I am detail-oriented, comfortable with Tally Prime, and committed to filing accurate returns within deadlines.”
Test your GST knowledge
Pick an answer for each question, then check your score. Nothing is saved — this is just for practice.
TDS rate charts
Indicative sections and rates for the most common payments — thresholds and rates change; always confirm on the Income Tax e-filing portal before deducting.
| Section | Nature of payment | Typical rate |
|---|---|---|
| 192 | Salary | Slab rate |
| 194A | Interest (other than securities) | 10% |
| 194C | Payment to contractors | 1–2% |
| 194H | Commission or brokerage | 5% |
| 194I | Rent (land/building/furniture) | 10% |
| 194J | Professional or technical fees | 10% (2% for certain technical services) |
| 194Q | Purchase of goods (buyer side, above threshold) | 0.1% |
| 206C(1H) | Sale of goods (seller-side TCS, above threshold) | 0.1% |