Goods and Services Tax
Goods and Services Tax (GST) is a single tax on goods and services in India. It applies from the manufacturer to the consumer. GST is a multi-stage, destination-based tax. It is charged at every step of value addition. Sellers collect GST from buyers when selling certain goods and services and then deposit the collected GST with the government.
-
Calculate GST on sales of goods and services.
-
Create statutory adjustment journals (journals to record GST or ITC reversals on advances or ineligible transactions for statutory tax compliance).
-
Generate E-Way bills (electronic document required under India GST for transporting goods worth over INR 50,000, generated through the E-Way Bill Portal).
GST Tax Types
GST is categorized into the following types based on the transaction.
-
State Goods and Services Tax (SGST)– This tax is charged on sales within a state, and the state government collects it.
-
Central Goods and Services Tax (CGST)– This tax is charged on supplies within a state, and the Central government collects it.
-
Union Territory Goods and Services Tax (UTGST)– This tax is charged on sales in Union Territories like Andaman and Nicobar, Daman and Diu, Chandigarh, Dadra, and others.
-
Integrated Goods and Services Tax (IGST)– This tax is charged on goods and services moving between states. If a business transfers goods or services from one state to another, they pay IGST, which the Central government collects.
GST Tax Components
GST uses these tax rate slabs for different goods and services:
-
Nil Rated – This rate covers essential goods and services.
-
Exempted goods (No tax) – These supplies are exempt from GST, so GST doesn't apply and you can't claim Input Tax Credit (ITC) on them.
-
5% rate slab – This rate mostly covers goods and services in the Consumer Price Index (CPI) and items people use every day.
-
12% and 18% rate slabs – These rates apply to things such as capital goods, industrial intermediaries, iron and steel, financial, and telecom services.
-
28% rate slab – This rate is for luxury goods and services.
Before you start using the India GST feature, read the following topics:
-
Setting Up India GST – Configure GST settings in your NetSuite account.
-
Applying GST on Purchase Transactions – Ensure GST is calculated on your purchases.
-
Applying India GST on Sales Transactions – Ensure GST is calculated on your sales.
Following are some additional information to help you understand key GST requirements.
-
Creating Statutory Adjustment Journals – Record adjustments for statutory compliance.
-
E-Way Bill for India – Create E-Way bills for goods movement as required by law.