GST (Goods and Services Tax) is India’s single, destination-based indirect tax on the supply of goods and services, in force since 1 July 2017. It replaced a web of central and state taxes with one tax charged at every stage of the supply chain, where each business claims credit for the tax it has already paid. Since 22 September 2025 the main rates are 5% and 18%, with 40% for a short list of sin and luxury items.
A plain-language overview for business owners, start-ups and professionals in Hyderabad and across Telangana.01What GST is and how it is structured
GST is levied under the Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017 and the State GST Acts. It was introduced through the Constitution (101st Amendment) Act, 2016, and policy decisions are taken by the GST Council, in which the Centre and the States sit together. Tax is collected where the goods or services are consumed, not where they are made.
CGST
Central GST, charged on supplies within a single State. Goes to the Centre.
SGST / UTGST
State (or Union Territory) GST, charged along with CGST on the same intra-State supply. Goes to the State.
IGST
Integrated GST, charged on supplies between States and on imports. Shared between the Centre and the destination State.
Example. A Hyderabad trader sells goods worth ₹1,00,000 to a buyer in Secunderabad at 18%: CGST ₹9,000 plus SGST ₹9,000. If the same goods go to a buyer in Chennai, IGST of ₹18,000 is charged instead. The total tax is the same; only the split changes.
02GST rates in 2026
Following the 56th GST Council meeting, the 12% and 28% slabs were removed with effect from 22 September 2025. The structure now looks like this:
Special rates also remain: 3% for gold, silver and jewellery, and 0.25% for rough diamonds. Tobacco and pan masala were handled separately. The rate for any particular item depends on its classification (HSN or SAC code), so always check the current notification for the item you deal in.
03Who must register
A person must take GST registration once aggregate turnover crosses the threshold. Generally this is ₹40 lakh for suppliers of goods and ₹20 lakh for suppliers of services, with lower limits in special category States. Registration is compulsory regardless of turnover in several cases, for example inter-State supply of goods, e-commerce operators and sellers on e-commerce platforms (subject to exceptions), and casual or non-resident taxable persons. Smaller businesses may opt for the composition scheme, which allows tax at a low flat rate on turnover but does not allow input tax credit.
04Input tax credit: the heart of GST
Input tax credit (ITC) lets a registered business set off the GST it paid on purchases against the GST it collects on sales. Tax is therefore effectively paid only on the value a business adds.
Under section 16 of the CGST Act, ITC is available broadly where you hold a valid tax invoice or other prescribed document, have received the goods or services, the tax has actually reached the Government, and your return has been filed. Credit on certain items, such as motor cars for personal use, food and beverages for outdoor catering, and goods lost or stolen, is blocked under section 17(5). Credit visible in your auto-generated GSTR-2B statement should be reconciled with your books every month.
05Returns and compliance
| Return | What it reports | Usual frequency |
|---|---|---|
| GSTR-1 | Details of outward supplies (sales) | Monthly, or quarterly under the QRMP scheme |
| GSTR-3B | Summary of sales, ITC claimed and tax paid | Monthly, or quarterly with monthly payment under QRMP |
| GSTR-2B | Auto-drafted statement of ITC available, based on suppliers’ returns | Generated every month |
| GSTR-9 / 9C | Annual return and reconciliation statement, where applicable | Once a year |
GSTR-1 is generally due on the 11th and GSTR-3B on the 20th of the following month, with different dates for quarterly filers. Late filing attracts fees and interest. Tax invoices, e-invoicing (for businesses above the notified turnover) and e-way bills for movement of goods are the other everyday requirements. Due dates are extended or changed by notification from time to time, so check the notified date before you act.
06Notices, appeals and GSTAT
The GST system is heavily data-driven. Mismatches between GSTR-1, GSTR-3B and GSTR-2B, or between returns and e-way bill or e-invoice data, commonly lead to a notice seeking an explanation. The usual sequence is a show cause notice, a reply and personal hearing, and an order. An order can be challenged in a first appeal before the Appellate Authority, usually with a pre-deposit, and a further appeal lies to the GST Appellate Tribunal (GSTAT), whose establishment was cleared by the GST Council in 2025. Strict time limits apply at each stage, so every notice should be read and diarised on the day it is received.
07Common questions
Is GST a single tax?+
It is a single, nationwide framework, but a transaction attracts CGST and SGST (within a State) or IGST (between States). The rate is the same for the buyer either way.
Do I need GST registration to sell online?+
Sellers on e-commerce platforms generally need registration irrespective of turnover, subject to specified exceptions. Check the exception conditions for your product and platform.
Can I claim ITC if my supplier has not filed a return?+
Generally no. ITC depends on the tax having been paid to the Government and appearing in your GSTR-2B. Follow up with the supplier before you claim.
What happens if I miss a GST return?+
A late fee and interest on unpaid tax apply, and repeated non-filing can lead to blocking of e-way bills or cancellation of registration. File the pending returns as early as possible.
This article is a general overview for information and is not professional advice. Please verify current rates, thresholds and due dates against official CBIC and GST Portal notifications before acting. Sources: CBIC, GST Portal, GST Council.
This article is for general information and is not professional advice. Law and rates change; please consult us before you act.