GST questions are asked in almost every accountant, tax and finance interview in India. These GST interview questions cover the structure of GST, CGST, SGST and IGST, registration and invoicing for freshers, then input tax credit, place of supply, reverse charge, returns, e-invoicing, reconciliation and notices for experienced professionals.
30 questions · Updated
Fundamentals, definitions and simple scenarios. Good for freshers and warm-ups.
Goods and Services Tax is a single, destination-based indirect tax on the supply of goods and services in India, introduced on 1 July 2017.
It replaced many earlier taxes such as excise duty, service tax, VAT and entry tax.
Tax is collected at each stage of the supply chain, with credit for tax paid at earlier stages, so the final consumer bears it.
For a supply within the same state (intra-state), both CGST (to the Centre) and SGST (to the state), or UTGST in a union territory, are charged, split equally, for example 9% + 9% on an 18% item. For a supply between states (inter-state), imports and exports, IGST is charged at the full rate and later shared between the Centre and the destination state.
Businesses whose aggregate turnover exceeds the threshold must register: ₹40 lakh for supply of goods and ₹20 lakh for services in most states, and lower limits (₹20 lakh and ₹10 lakh) in some special category states. Certain businesses must register regardless of turnover, such as inter-state suppliers of goods, e-commerce operators and sellers, casual taxable persons and those liable under reverse charge.
From 22 September 2025, the GST Council moved most goods and services into two main slabs, 5% and 18%, with a special 40% rate for luxury and sin goods, while many essentials are exempt (0%) and special rates apply to items such as gold.
Before that, the main slabs were 5%, 12%, 18% and 28% with compensation cess.
Always check the latest rate notifications for a specific HSN or SAC code.
A GSTIN is a 15-character number: the first two digits are the state code (such as 27 for Maharashtra and 07 for Delhi), the next ten characters are the PAN of the business, the 13th character is the entity number for multiple registrations in the same state, the 14th is Z by default, and the 15th is a check code. It can be verified on the GST portal.
HSN (Harmonised System of Nomenclature) codes classify goods and SAC (Services Accounting Code) codes classify services, and they determine the GST rate. Businesses must show HSN or SAC codes on invoices and in returns: at least four digits if turnover is up to ₹5 crore and six digits above that, with eight digits required in some cases such as exports.
Supplier name, address and GSTIN, a unique invoice number for the financial year (up to 16 characters), date, recipient name, address and GSTIN (if registered), place of supply with state name and code, HSN or SAC code, description, quantity, value, taxable value, tax rate and amount separately for CGST, SGST or IGST, whether tax is payable on reverse charge, and the supplier's signature or digital signature.
A tax invoice is issued by a registered person for taxable supplies and shows GST charged, which lets a registered buyer claim input tax credit. A bill of supply is issued when no GST is charged, by composition dealers or for exempt supplies, and does not show tax, so the buyer cannot claim input tax credit on it.
Time of supply decides when GST becomes payable.
For goods, it is generally the date of issue of the invoice (or the last date on which it should have been issued).
For services, it is generally the earlier of the invoice date (if issued within the time limit) or the date of receiving payment.
Special rules apply to reverse charge and vouchers.
Exempt supplies, such as fresh vegetables or healthcare services, attract no GST, and related input tax credit must be reversed.
Nil-rated supplies have a 0% rate in the tariff and are treated like exempt supplies for credit.
Zero-rated supplies are exports and supplies to SEZ units, which are taxable at 0% but allow input tax credit or refunds.
Non-GST supplies, such as alcohol for human consumption and petroleum crude, are outside GST.
Exports of goods and services are zero-rated supplies.
Exporters can either export under a Letter of Undertaking (LUT) without paying IGST and claim a refund of the accumulated input tax credit, or pay IGST on exports and claim a refund of that IGST.
For exports of services, payment must generally be received in convertible foreign exchange, or in Indian rupees where RBI allows.
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Input tax credit lets a registered business reduce its output GST by the GST it paid on purchases used for business.
To claim it, you need a valid tax invoice, the goods or services must be received, the supplier must have filed their return so the invoice appears in your GSTR-2B, tax must actually be paid to the government, and you must file your own return.
ITC is not allowed on blocked items under Section 17(5), such as food and beverages or personal-use motor vehicles, with some exceptions.
Under reverse charge, the recipient of goods or services pays GST to the government instead of the supplier.
It applies to notified supplies, such as services from a goods transport agency, legal services from an advocate, sponsorship and services imported from abroad, and earlier to certain purchases from unregistered suppliers.
The recipient pays the tax in cash and can usually claim it back as ITC.
GSTR-1 reports outward supplies (sales), filed monthly or quarterly under the QRMP scheme.
GSTR-3B is the summary return where tax is paid, filed monthly or quarterly.
GSTR-2B is an auto-generated statement of ITC available from suppliers' filings.
GSTR-9 is the annual return and GSTR-9C the reconciliation statement for larger taxpayers.
Composition dealers file CMP-08 quarterly and GSTR-4 annually.
The composition scheme is a simpler option for small taxpayers with turnover up to ₹1.5 crore (₹75 lakh in special category states) for goods, and ₹50 lakh for service providers. They pay tax at a low fixed rate on turnover, such as 1% for traders and manufacturers and 5% for restaurants, file fewer returns, but cannot collect GST from customers, claim input tax credit or make inter-state supplies of goods.
A credit note (section 34) is issued when the taxable value or tax charged in an invoice was too high, goods are returned, or services are found deficient, reducing the supplier's tax liability.
A debit note is issued when the value or tax charged was too low.
Credit notes must be declared by 30 November after the end of the financial year or the date of the annual return, whichever is earlier.
TDS under GST (section 51) requires government departments, local authorities and certain notified persons to deduct 2% (1% CGST plus 1% SGST, or 2% IGST) from payments to suppliers when the contract value exceeds ₹2.5 lakh, filed in GSTR-7.
TCS (section 52) requires e-commerce operators to collect tax on net taxable supplies made through their platform by sellers, currently 0.5% under IGST (or 0.25% CGST plus 0.25% SGST), filed in GSTR-8.
Suppliers claim these amounts as credit in their electronic cash ledger.
Input tax credit must be reversed when inputs are used for exempt supplies or non-business purposes (rules 42 and 43, proportionately for common inputs and capital goods), when the supplier is not paid within 180 days of the invoice date (rule 37, with interest, re-availed on payment), on goods lost, stolen, destroyed or given as free samples, and on credit notes received from suppliers.
A principal can send inputs or capital goods to a job worker without paying GST, using a delivery challan, if they are returned within one year for inputs or three years for capital goods; otherwise the original dispatch is treated as a supply.
The job worker charges GST on the job work service.
Movements are reported in ITC-04 by the principal.
For goods, GST is not payable on advances received; tax is paid when the invoice is issued.
For services, GST is payable on advances received, because the time of supply is the earlier of invoice or payment.
The supplier issues a receipt voucher and pays tax, then adjusts it against the final invoice, or issues a refund voucher if the service is not provided.
Under section 9(5), for certain notified services supplied through e-commerce platforms, the platform operator, not the actual supplier, is liable to pay GST as if it were the supplier. This applies to services such as passenger transport by cab aggregators, accommodation booked through platforms (with conditions), housekeeping services and restaurant services through food delivery apps.
The Quarterly Return Monthly Payment scheme lets taxpayers with aggregate turnover up to ₹5 crore file GSTR-1 and GSTR-3B quarterly, while paying tax monthly using form PMT-06, either with the fixed-sum method (35% of the previous quarter's liability) or the self-assessment method. The optional Invoice Furnishing Facility lets them upload B2B invoices monthly so buyers can claim credit sooner.
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The location of the supplier is where the supplier is registered; the place of supply is where the supply is treated as made under the IGST Act rules, such as where goods are delivered or, for many services, the recipient's location.
Comparing the two decides whether a supply is intra-state (CGST plus SGST) or inter-state (IGST).
Charging the wrong type means paying the correct tax again and claiming a refund of the wrong one.
E-invoicing is mandatory for businesses above a turnover threshold (currently ₹5 crore).
The invoice is uploaded to the Invoice Registration Portal, which returns an Invoice Reference Number and a QR code, and the data flows automatically into GSTR-1 and the e-way bill system.
An e-way bill is needed to move goods worth more than ₹50,000, generated on the e-way bill portal with details of the goods and vehicle, valid for a period based on distance.
Every month I compare purchase records in the books with GSTR-2B, matching by supplier GSTIN, invoice number, date and tax amount, using Excel or reconciliation tools.
I list invoices in the books but missing in GSTR-2B and follow up with suppliers to file or correct them, and check invoices in GSTR-2B not in the books.
I claim ITC only as allowed by GSTR-2B and the law, and document differences to support the annual return and any notices.
GSTR-9 is the annual return summarising outward supplies, input tax credit, tax paid, refunds and demands for the financial year, mandatory for taxpayers with turnover above ₹2 crore and optional below that.
GSTR-9C is a reconciliation statement between the annual return and audited financial statements, self-certified by the taxpayer, required when turnover exceeds ₹5 crore.
Both are due by 31 December after the financial year, unless extended.
Read the notice carefully to identify its type, such as ASMT-10 for scrutiny discrepancies, DRC-01 for a show cause notice, or DRC-01A for intimation before a show cause notice, and the deadline. Reconcile the data, such as returns versus books or GSTR-2B versus claimed credit, prepare a clear written reply with supporting documents within the time limit on the portal, pay any accepted liability with interest through DRC-03, and request a personal hearing if needed.
An Input Service Distributor (ISD) is an office, usually the head office, that receives invoices for common input services used by several branches with different GSTINs and distributes the credit to them in proportion to their turnover.
From 1 April 2025, ISD registration is mandatory for distributing such common credit, including services under reverse charge.
Cross-charge, by contrast, is a taxable supply of services between distinct persons of the same company.
Refunds can be claimed for exports under LUT (accumulated input tax credit), IGST paid on exports (processed through the customs system for goods), inverted duty structure where input tax rates exceed output rates, excess cash balance, and supplies to SEZ units. Claims are filed in RFD-01 within two years of the relevant date with supporting documents, and the department may grant a provisional refund of 90% for zero-rated supplies.
Supplies between related persons or distinct persons, such as branches of the same company in different states, are valued under rule 28 at open market value, or the value of like supplies, or cost plus 10%.
If the recipient is eligible for full input tax credit, the invoice value is deemed to be open market value.
Free supplies to related persons can also be taxable under Schedule I.
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