Top 45 GST Interview Question and Answer

Basic GST Questions

1. What is GST?

ANSWER: GST (Goods and Services Tax) is a comprehensive indirect tax levied on the manufacture, sale, and consumption of goods and services. It was introduced to replace multiple indirect taxes in India, such as VAT, excise duty, and service tax, Luxury tax etc. 

2. What are the main types of GST?

ANSWER: There are four main types of GST:

CGST (Central GST): Collected by the central government on intra-state sales.

SGST (State GST): Collected by state governments on intra-state sales.

IGST (Integrated GST): Collected by the central government on inter-state sales.

UTGST (Union Territory GST): Levied on goods and services in union territories.

3. What are the main GST rate structure in India?

ANSWER: GST has a multi-tier rate structure: 5%, 12%, 18%, and 28%. Some goods have special rates, such as 3% on some goods, or 0% for essential items.

4. What is the GST Council?

ANSWER: The GST Council is a body that makes recommendations regarding the implementation and execution of the GST Act. The council takes care of rates of taxes, and the administration of GST. It is headed by the Union Finance Minister and includes Finance Ministers of all states and union territories.

5. What is the difference between CGST, SGST, and IGST?

ANSWER: CGST is the tax levied by the central government on intra-state transactions, SGST is the tax levied by the state government on intra-state transactions, and IGST is the tax levied by the central government on inter-state transactions.

GST Registration & Returns

6. What is GST Registration?

ANSWER: GST Registration is the process through which a business becomes a taxpayer under the GST regime. It is mandatory for businesses whose turnover exceeds the prescribed limit u/s 22 of CGST Act 2017 or who are involved in business as specified u/s 24 of CGST Act 2017.

7. What is the turnover threshold limit to get GST registration?

ANSWER: Businesses with a turnover exceeding Rs.40 lakhs from sales of goods, Rs.20 lakhs from sales of service (excluding 10 special states) in a financial year must register for GST. Other conditions must be checked, as specified u/s 24 of CGST Act 2017, for mandatory registration.

8. What are the types of GST returns?

ANSWER: The main types of GST returns include:

GSTR-1: Outward supply return

GSTR-2A: Inward supply return

GSTR-2B: Inward supply return (Used for claiming ITC)

GSTR-3B: Monthly summary return for payment of taxes.

GSTR-9: Annual return

GSTR-9C: Annual return(Reconciliation statement)

GSTR-10: Final return

GSTR-11: Return for individuals with UIN (Unique Identification Number)

9. What is GSTR-3B?

ANSWER: GSTR-3B is a monthly self-declaration return that summarizes the outward and inward supplies, tax liabilities, and available credits. It is a simplified return and is to be filed by the 20th of the next month.

10. What is the due date for filing GSTR-3B?

ANSWER: The due date for filing GSTR-3B is the 20th of next month.

11. What is the difference between GSTR-1 and GSTR-3B?

ANSWER: GSTR-1 is filed to report outward supply (sales), while GSTR-3B is filed to report the summary of inward and outward supplies and tax liabilities.

GST Compliance & Taxation

12. What is Input Tax Credit (ITC)?

ANSWER: ITC allows businesses to reduce the tax they have already paid on their inputs (goods/services, and on capital goods) from the tax they owe on their outputs. It is claimed to avoid double taxation.

13. When can Input Tax Credit be claimed?

ANSWER: ITC can be claimed as per conditions u/s16(1), 16(2) i.e. when the goods/services are used for business purposes, the supplier has paid the tax, and the goods/services have been received, etc. And that ITC should not be blocked u/s 17(5).

14. What is the reverse charge mechanism under GST?

ANSWER: The reverse charge mechanism (RCM) means that the recipient of the goods/services must pay the tax instead of the supplier. This is applicable in certain situations as defined under GST u/s 9(4) and 9(5) of CGST Act 2017.

15. Who needs to register for GST

ANSWER: GST registration is mandatory for:

• Businesses exceeding the threshold limit.
• E-commerce operators.
• Casual taxable persons.
• Input Service Distributors (ISD).
• Non-resident taxable persons.

16. What is the GST composition scheme?

ANSWER: The GST composition scheme allows small businesses with a turnover of up to Rs.1.5 crore to pay tax at a lower rate on their turnover, simplifying compliance.

17. What are the benefits of GST?

ANSWER: Some benefits include:

• Elimination of cascading taxes (tax on tax)
• Simplified tax structure
• Increased transparency and reduced tax evasion
• Boost to the economy by promoting seamless trade and businesses

18. What is a GSTIN?

ANSWER: GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit identification number assigned to every registered taxpayer under GST.

19. What are the exemptions under GST?

ANSWER: Certain goods and services are exempted from GST, such as educational services, healthcare services, and the sale of agricultural products.

20. What is the difference between GST and VAT?

ANSWER: GST is a comprehensive tax levied on all goods and services, while VAT was applicable only to goods. GST has replaced VAT and other indirect taxes.

GST for Different Sectors

21. What is the GST treatment for exports?

ANSWER: Exports are treated as "zero-rated" under GST, meaning no tax is levied on exports. Exporters can claim a refund of the input tax paid on goods/services used for exports.

22. Is GST applicable on exports?

ANSWER: GST is not applicable on exports, but exporters can claim a refund of the input tax credit (ITC) paid on their purchases.

23. What is the tax rate for export goods under GST?

ANSWER: Exported goods are subject to a zero percent GST rate under the "zero-rated supply" provisions.

24. Is GST applicable on import of goods?

ANSWER: Yes, GST is applicable on the import of goods and services, and it is payable at the time of import along with customs duties.

25. How is GST applied to e-commerce?

ANSWER: E-commerce operators are required to collect tax at source (TCS) under GST on behalf of the suppliers who sell through their platforms.

GST on Services

26. How is GST calculated on services?

ANSWER: GST on services is calculated based on the value of the service provided. The applicable GST rate (5%, 12%, 18%, or 28%) is applied on the total value.

27. What is the GST treatment of online services?

ANSWER: Online services are taxable under GST. If the service is provided by an overseas supplier to a resident in India, IGST is levied on the transaction.

28. What is the place of supply under GST for services?

ANSWER: The place of supply determines the type of GST (CGST, SGST, or IGST) applicable to a service. For most services, it is the location of the recipient. But in some cases it moves to the location of the supplier also. 

29. What is the reverse charge for services?

ANSWER: Under the reverse charge mechanism for services, the recipient of the service is liable to pay the tax instead of the supplier, in certain cases specified by the government.

30. What is the difference between goods and services under GST?

ANSWER: Goods are tangible products that are movable and can be bought or sold, while services are intangible activities that cannot be physically touched or stored.

GST for Businesses

31. How do small businesses benefit from GST?

ANSWER: Small businesses benefit from the composition scheme, which offers lower tax rates and simpler compliance.

32. What is the GST treatment of freebies or gifts?

ANSWER: In GST, free samples are considered supplies even if no consideration is received in return. However, certain conditions and exceptions exist. Notably, the supply of free samples does not fall under Schedule I, making them generally exempt from GST if no consideration is exchanged. On the other hand input tax credit of such goods shall be restricted. 

33. How are discounts treated under GST?

ANSWER: Discounts, whether given before or after the supply but as per pre-agreed term of supply, are liable to reverse the ITC by the discount recipient. But a discount which is not as per agreement shall have no GST impact.

34. What is the meaning of `supply` under GST?

ANSWER: `Supply` refers to the transfer of goods or services for a consideration or in the course of business, including all activities like sale, barter, exchange, lease, or rental, etc.

35. What is the taxability of barter transactions under GST?

ANSWER: Barter transactions (exchanging goods or services instead of money) are taxable under GST, and the value of the supply will be based on the fair market value of the goods/services exchanged.

Advanced GST Questions

36. What is the GST treatment of stock transfers?

ANSWER: Stock transfers between branches or units of the same company are subject to GST if the transfer is interstate, and IGST will be applied.

37. Can a non-resident Indian (NRI) get GST registration?

ANSWER: Yes, NRIs who are engaged in business in India must obtain GST registration u/s 24.

38. What is the significance of the HSN/SAC code in GST?

ANSWER: HSN (Harmonized System of Nomenclature) code for goods and SAC (Services Accounting Code) for services are used to classify goods and services under GST for proper taxation.

39. What are the penalties for non-compliance with GST?

ANSWER: Penalties include fines for late filing, interest on non-payment of taxes, and other violations. These fines vary depending on the nature of the non-compliance.

40. What is GST on mixed supply?

ANSWER: When 2 or more supplies are bundled in one, those are sold individually GST on mixed supply is applied at the highest rate of GST applicable to any of the individual items in the mixed supply.

41. What is the time of supply under GST?

ANSWER: The time of supply is the point at which goods or services are considered to have been supplied and tax is payable. It depends on the transaction type supply. It means the time of supply provisions for goods and services are not the same. 

42. What is the composition scheme under GST?

ANSWER: The structure scheme is a simplified tax system for small taxpayers. Companies with sales of up to 1.5 crores can pay taxes on fixed interest rates (1% for manufacturers) and  quarterly yields.

43. What is GST compensation cess?

ANSWER: The GST compensation cess is an additional tax levied on certain luxury goods and sin items (e.g., Car, tobacco, aerated drinks) to compensate states for the loss of revenue from GST implementation.

44. What is a GST refund?

ANSWER: A GST refund is the process where taxpayers can claim back the GST paid on input purchases if the input tax credit exceeds the tax liability or for certain exports.

45. What is the role of a GST consultant?

ANSWER: A GST consultant advises businesses on GST compliance, tax planning, and issues related to registration, filing returns, and claiming refunds.