What is Goods and Services Tax (GST)?
Nexa Consultancy | Startup & Finance Glossary
Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It replaced multiple previous taxes like VAT, Service Tax, and Excise Duty, creating a unified tax structure.
Why it Matters for Startups:
Understanding GST is non-negotiable for Indian startups. Compliance involves obtaining a GST registration number (GSTIN), issuing GST-compliant invoices, filing monthly or quarterly returns (GSTR-1, GSTR-3B), and correctly claiming Input Tax Credit (ITC). Failure to comply can lead to penalties, interest, and disruption to your business operations. Start with our GST Filing Checklist.
Example:
A SaaS startup providing a service for ₹10,000 to a client in the same state would issue an invoice showing a taxable value of ₹10,000, plus 9% CGST (₹900) and 9% SGST (₹900), for a total invoice value of ₹11,800. The startup must then deposit this ₹1,800 with the government.