What is GST?
Goods and Services Tax — India's unified indirect tax that replaced excise duty, VAT, and service tax in July 2017. Applies to all B2B transactions above ₹40 lakh turnover.
GST (Goods and Services Tax) is a destination-based, multi-stage tax levied on the supply of goods and services in India. It replaced over 17 indirect taxes (excise, VAT, CST, service tax, etc.) with a single, unified structure.
GST has four main slabs: 0%, 5%, 12%, 18%, and 28%. Special rates apply to gold (3%) and rough diamonds (0.25%). B2B industrial goods mostly attract 12% or 18%.
B2B transactions use Input Tax Credit (ITC): if you pay GST on a purchase, you can offset it against your GST liability on sales. This makes GST neutral for registered businesses in the supply chain, as only the final consumer bears the tax.
GSTIN (GST Identification Number) is a 15-digit code. The first 2 digits are the state code, next 10 are PAN, followed by a sequential entity code. Always verify a supplier's GSTIN before making payment — use gstin.in or the GST portal.
On VyaparSethu, suppliers' GSTINs are verified during onboarding. All Quotations display GST-inclusive and exclusive breakdowns, so buyers can claim ITC accurately.
Frequently Asked Questions
What is GST in simple terms?
GST is India's single indirect tax on goods and services. It replaced old taxes like VAT and excise. Businesses collect GST from buyers and pay it to the government, but they get credit for GST they paid on their own purchases.
What is the GST rate for industrial goods?
Most industrial goods attract 18% GST. Specific categories vary — check the HSN code for the exact rate.
Is GST mandatory for small businesses?
GST registration is mandatory if annual turnover exceeds ₹40 lakh (₹20 lakh for services, ₹10 lakh in North-East states), or if you do inter-state supply.
What is Input Tax Credit in GST?
ITC allows a registered business to deduct the GST paid on purchases from the GST it collects on sales, so you only pay tax on the value you add.
Related Terms
What is a GST Invoice (Tax Invoice)?
A tax invoice is the mandatory legal document issued by a GST-registered supplier at the time of supply. It enables the buyer to claim Input Tax Credit (ITC).
What is HSN Code?
Harmonised System of Nomenclature — a 6–8 digit international product classification code used in GST invoices to determine the correct tax rate.
What is MSME?
Micro, Small and Medium Enterprise — India's official classification for businesses below ₹250 crore turnover that unlocks priority credit, govt tenders, and subsidies.
Put this knowledge to work
Post a Requirement — verified suppliers quote with proper GST invoices, HSN codes, and Protected Payment on every deal.