What is goods and services tax (GST)?
Reviewed by Ranga & Company
GST: GST is India's indirect tax on the supply of goods and services, in force since 1 July 2017. Businesses collect it from customers, claim credit for GST paid on purchases, and pay the difference to the government.
At a glance
- In force since
- 1 July 2017
- Within a state
- CGST + SGST (e.g. Jodhpur to Jaipur)
- Between states / imports
- IGST
- Main slabs (from 22 Sep 2025)
- 5% and 18%, with 40% for select luxury and sin goods
- Registration in Rajasthan
- Turnover above ₹40 lakh (goods) or ₹20 lakh (services)
- Rajasthan state code
- 08
How GST flows through a sale
- A supplier charges GST on its invoice and collects it from the buyer
- The supplier reports the sale in GSTR-1 and pays tax in GSTR-3B
- The business buyer claims the GST it paid as input tax credit
- Only the final consumer bears the tax; each business pays GST on its value addition
Who must register
- Businesses with aggregate turnover above ₹40 lakh (goods) or ₹20 lakh (services) in Rajasthan
- Anyone making inter-state supplies of goods, regardless of turnover
- Most sellers on e-commerce platforms, and those paying tax under reverse charge
- Voluntary registration is allowed for anyone who wants to claim input tax credit
The 2025 rate rationalisation
From 22 September 2025, the GST Council folded the old 12% and 28% slabs into a simpler structure: most items now fall under 5% or 18%, with a 40% rate for a small set of luxury and sin goods. Always confirm the current rate for your HSN code before invoicing.
Common mistakes
- Charging CGST+SGST on a sale to another state, which should be IGST
- Using a pre-September 2025 rate for an item whose slab changed
- Registering late after crossing the threshold, which brings tax plus interest on past sales
Frequently asked questions
What is the GST registration limit in Rajasthan?
₹40 lakh of annual turnover for suppliers of goods and ₹20 lakh for service providers, with compulsory registration for inter-state sales of goods regardless of turnover.
What is the difference between CGST, SGST and IGST?
CGST and SGST are charged together on sales within a state and shared between the centre and the state. IGST is charged on inter-state sales and imports.
What are the current GST rates?
Since 22 September 2025, most goods and services fall in two main slabs, 5% and 18%, with 40% for select luxury and sin goods and special rates for a few items such as gold.
Related terms
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