Goods and Services Tax

Goods and Services Tax (GST) is a single tax on goods and services in India, from the manufacturer all the way to the consumer. It's a multi-stage, destination-based tax that's charged at every step of value addition. The seller collects GST from buyers when selling certain goods and services, then deposits it with the government.

The India Localization Tax Process SuiteApp lets you calculate GST on sales of goods and services. The SuiteApp also lets you create statutory adjustment journals and generate E-Way bills.

GST Tax Types

GST is categorized into the following types based on the transaction.

State Goods and Services Tax (SGST)– You pay this tax 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)– You pay this tax 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:

GST Tax Types

GST Tax Components

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