Central Goods and Services Tax Act, 2017 Guide
Explore GST concepts and relevant legal provisions. Confirm current rules, notifications, and requirements with official sources and a tax professional.
वस्तु एवं सेवा कर
India's unified indirect tax — one nation, one tax, one market since 1 July 2017
Overview: Central Goods and Services Tax Act, 2017
The Goods and Services Tax (GST) is India's comprehensive indirect tax on the supply of goods and services. It subsumes VAT, service tax, excise, and most other indirect taxes. GST is levied as CGST + SGST for intra-State supply and IGST for inter-State supply.
This is a plain-English guide, not the statutory text. Check provisions against official legal sources, read our editorial policy, or research related judgments.
Prepare your records and choose the next resource
Useful records to organise for Central Goods and Services Tax Act, 2017. These prompts are not a mandatory filing checklist.
- The transaction, date of supply, locations and relevant invoice details.
- Registration category, turnover period and the specific return or notice involved.
- The official notification and portal instructions applicable to that transaction and period.
Key provisions of Central Goods and Services Tax Act, 2017
Section 22 — Registration threshold
₹40 lakh turnover for goods (₹20 lakh in special category States), ₹20 lakh for services (₹10 lakh in special States).
Section 9 — Levy and collection
CGST + SGST on intra-State supplies; IGST on inter-State supplies; UTGST for Union Territories.
Section 16 — Input Tax Credit (ITC)
Registered person can claim credit of GST paid on inputs used in the course of business, subject to matching in GSTR-2B.
Section 39 — Returns
GSTR-1 (outward supplies), GSTR-3B (summary return + tax payment), GSTR-9 (annual return). Composition dealers file CMP-08 quarterly.
Section 10 — Composition scheme
Turnover up to ₹1.5 crore for goods (₹50 lakh for services). Flat rate (1% traders, 5% restaurants, 6% services), no ITC.
Sections 122–138 — Offences and penalties
Late fee ₹50/day (₹20/day for nil return), interest 18% p.a., penalty 10% of tax or ₹10,000 (whichever higher), prosecution for evasion above ₹5 crore.
GST rate structure
Rates depend on the item and the date of supply. Before 22 September 2025 the main slabs were 5%, 12%, 18% and 28% plus compensation cess. From 22 September 2025 the GST Council rationalised most items into 5% and 18%, with a higher rate for specified demerit goods. Always check the rate notification in force on the date of supply.
How to register for GST
Register online at gst.gov.in. Requirements: PAN, Aadhaar, business address proof, bank account, digital signature (for companies/LLPs). GSTIN is issued within 3–7 working days after Aadhaar-based e-KYC.
Who typically needs this
- Businesses with turnover crossing the registration threshold
- E-commerce operators and sellers on Amazon, Flipkart, etc.
- Freelancers and consultants providing inter-State services
- Importers, exporters, and taxable persons under reverse charge
Frequently asked questions
What is the GST turnover limit for registration?
₹40 lakh aggregate turnover for suppliers of goods (₹20 lakh in special category States), and ₹20 lakh for suppliers of services (₹10 lakh in special States). Registration is compulsory regardless of turnover for inter-State supply, e-commerce operators and reverse charge cases.
What is Input Tax Credit (ITC)?
ITC is the credit of GST paid on business purchases, which you can set off against GST payable on your sales. It is available under Section 16 CGST Act if the supplier has filed GSTR-1, invoice appears in GSTR-2B, goods/services are received, and used for business.
What is the penalty for late GST return?
Late fee of ₹50 per day (₹20 for nil return) subject to caps, plus interest at 18% p.a. on unpaid tax. Persistent non-filers may face suspension or cancellation of GSTIN under Rule 21.
Related laws
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