|Standard GST Rate||Digital Reporting Requirements / E-invoicing||GST on Cross-Border Electronically Supplied Services||Tax Authority Website|
|0%, 5%, 12%, and 18%||Yes||Yes||GST Council|
GST Rates in India
The standard GST rate varies in India for taxpayers and currently is applicable at 0%, 5%, 12%, 18%, and 28%. There are reduced GST rates such as 3% and 0.25%. Special reduced rates are applicable for composition scheme taxpayers.
|GST Rates||Rate Type||Description|
|0%||Standard Rate||Applies to supplies of goods or services or both, namely: export of goods or services or both; or supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.|
|5%||Standard Rate||Applies to edible items such as sugar, paneer, coffee beans, dairy products for infants, fabric, spices, cashew nuts|
|12%||Standard Rate||Applies to ghee, almonds, processed food, mobile, preparations of vegetables, fruits, nuts or other parts, packaged coconut water|
|18%||Standard Rate||Applies to capital goods, industrial intermediaries, soap, pasta, corn-flakes, computers, printers|
|28%||Standard Rate||Applies to luxury items such as small cars, high-end motor-cycles, consumer durables such as AC and fridges, cigarettes, soft drinks and proceeds from online gaming|
|3% and 0.25%||Reduced Rates||Gold, diamonds, and precious stones|
|1.5%, 5%, 6% on turnover||Simplified Rates||Taxpayers who opt for a composition scheme can get rid of tedious GST formalities and pay GST at a fixed rate of their turnover. A taxpayer whose turnover is below INR 15,000,000 can opt for the Composition Scheme.|
GST Registration Thresholds in India
- GST registration threshold for domestic established sellers providing services: INR 2,000,000. Persons providing services need to register if their aggregate turnover for the current financial year exceeds INR 2,000,000 (for normal category states) and INR 1,000,000 (for special category states).
- GST registration threshold for domestic sellers providing goods: INR 4,000,000 Persons supplying goods need to register if their aggregate turnover exceeds INR 4,000,000 (for normal category states) and INR 2,000,000 (for special category states).
- GST registration threshold for non-resident suppliers of Digital Services: There is no registration threshold. Any non-resident service provider of digital services is required to register for GST.
Indian GST Number Format
- The GSTIN is a 15-digit unique tax identification number (TIN) issued to every registered person under GST, hence the short form: “GSTIN”.
- Link to State codes: State name and State code
- Permanent Account Number: PAN (Permanent Account Number) is an identification number assigned to all taxpayers in India. PAN is an electronic system through which, all tax-related information for a person/company is recorded against a single PAN number. This acts as the primary key for the storage of information and is shared across the country. Hence no two tax-paying entities can have the same PAN.
- For businessesFormat: 22AAAAA0000A1Z5
- OtherFormat: AAAAA0000A
GST on Digital Services (OIDAR Services) in India
Online Information Database Access and Retrieval (OIDAR) services are defined as services whose delivery is mediated by information technology over the internet or an electronic network and are impossible to ensure in the absence of information technology. Hence, for any service to constitute as OIDAR services, the following essential pre-requites are required to be analyzed:
- The service is to be delivered over the Internet or an electronic network
- Delivery of services is impossible in the absence of information technology
OIDAR services are subject to the 18% GST rate in India.
An indicative list of taxable OIDAR services in India:
- Advertising on the internet
- Providing cloud services (e.g. google drive)
- Provision of e-books, movies, music and software
- Providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network
- Online supplies of digital content
- Online gaming
- Digital data storage
Will your business need to pay GST on digital services in India in 2023?
Marketplace & Platform Operator Rules in India
Marketplace and platform operators are treated as e-commerce operators (ECO) who, directly or indirectly, own, operate or manage an electronic platform which is engaged in facilitating the supply of any goods and/or services.
There are two types of e-commerce business models.
Marketplace-based model: In this model, the suppliers list their products/ services on the platform provided by the ECO and the customer purchases the same from the platform by paying the consideration to the ECO. Here, the ECO acts as a facilitator/ intermediary between the supplier and the customer.
Under this model, an additional responsibility has been cast on the ECO under the GST, requiring it to register and to collect tax at source ('TCS') at the rate of 1% (0.5% CGST + 0.5% SGST or 1% IGST) from the sellers where consideration is to be collected by the ECO.
Inventory-based model: In this model, suppliers undertake transactions directly with the customers through their own digital or electronic network/ platform. Such suppliers should be covered under the definition of ECO but provisions of mandatory registration should not be applicable to them.
Invoice Requirements in India
A GST invoice should have the following mandatory details:
- Document & general transaction information
- Invoice number and date
- Place of supply
- Supplier information
- Name, shipping, and billing address
- Signature of the supplier
- Customer information
- Customer name
- Shipping and billing address
- Customer and taxpayer’s GSTIN (if registered)
- Financial transaction information
- HSN code/ SAC code
- Item details i.e. description, quantity (number), unit (meter, kg etc.), total value
- Taxable value and discounts
- Rate and amount of taxes i.e. Central GST/ State GST/ Integrated GST
- Whether GST is payable on a reverse charge basis
E-Invoicing & Digital Reporting for India
The e-invoicing system under GST was implemented on 1st October 2020 for taxpayers with an aggregated turnover exceeding INR 5,000,000,000 (INR 5,000 million). After a few extensions, through Notification No. 10/2023, the Ministry of Finance has reduced the threshold for mandatory e-invoicing to INR 50,000,000 (INR 50 million), effective August 1, 2023. GST-registered individuals with turnover above this limit in any financial year from 2017-18 are required to generate e-invoices (for further details on this, refer to our blog).
Governmental Body Responsible for E-invoicing and Digital Reporting in India
The body governing e-invoicing is the GST Council.
GST Payments and Returns in India
|Return Form||Description||Frequency||Due Date||Notes|
|GSTR-1||Details of outward supplies of taxable goods and/or services||Monthly||11th of the next month|
|GSTR-3B||Summary return of outward supplies and input tax credit claimed, along with payment of tax by the taxpayer.||Monthly||20th of the next month||Payment currency INR|
|GSTR-1 and GSTR-3B||Details of outward supplies of taxable goods and/or services affected. Summary return of outward supplies and input tax credit claimed, along with payment of tax by the taxpayer.||Quarterly (If opted under the QRMP scheme (see more under Notes in the last column))||13th of the month succeeding the quarter||Quarterly Returns with Monthly Payment (QRMP) Scheme is for eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on a quarterly basis while paying their tax dues on monthly basis through a challan. (A challan used for making payment of tax, interest, late fee, and penalty under the GST law.)|
|GSTR-5||Return to be filed by a non-resident taxable person||Monthly||20th of the next month|
|GSTR-5A||Return to be filed by non-resident OIDAR (see more under Notes in the last column) service providers||Monthly||20th of the next month||Online Information Database Access and Retrieval Services|
|GSTR-6||Return for an input service distributor to distribute the eligible input tax credit to its branches||Monthly||13th of the next month|
|GSTR-7||Return to be filed by registered persons deducting tax at source (TDS)||Monthly||10th of the next month|
|GSTR-8||Return to be filed by e-commerce operators containing details of supplies affected and the amount of tax collected at source by them||Monthly||10th of the next month||Payment currency INR|
|GSTR-9 and GSTR-9C*||Annual return by a regular taxpayer||Annually||31st December of the next financial year|
* The Government has waived the requirement i) to file an Annual GST Return in Form GSTR-9 for taxpayers with an annual turnover of up to ₹2 crore and ii) to file a reconciliation statement in Form GSTR-9C by taxpayers with an annual turnover of up to ₹5 crore.
India has simplified GST returns for non-resident taxpayers supplying services that qualify for OIDAR (digital services).
Penalties in case of late filings or misdeclarations
In the case of the late filing of GST returns and payments, the Indian Tax Authorities/government enforces the following penalties:
- The penalty for late filing is INR. 100 per day, so it is INR 100 under CGST & INR 100 under SGST. The total should be INR 200/day. The maximum is INR 5,000 for each return(GSTR 3B and GSTR 1). There is no late fee on IGST in case of delayed filing.
- Late payment of tax should result in a penalty of INR 20,000 or 10% of the tax due, whichever is higher.
- Along with the late fee, interest has to be paid at 18% per annum. It has to be calculated by the taxpayer on the tax to be paid. The time period will be from the next day of filing to the date of payment.