GST
Also known as: Goods and Services Tax, GST India
Goods and Services Tax — India's unified indirect tax on most goods and services, collected at multiple rates depending on the item or service category.
GST stands for Goods and Services Tax. Introduced in India on 1 July 2017, it replaced a complex patchwork of central excise, state VAT, service tax, and a dozen smaller levies with a single unified indirect tax. The buyer pays GST on the invoice; the seller collects and deposits it with the tax authorities through the GST portal.
GST is applied at four main rate slabs in India — 5%, 12%, 18%, and 28% — with essential items (most food, basic medicine) at 0% and luxury and “sin” goods (tobacco, premium cars) at higher effective rates through additional cess. Services typically attract 18% GST.
For consumers, the practical concern is reading the invoice: the GST component is shown as a separate line. Hotel rooms above ₹7,500 per night attract 18% GST; below that, 12%. Restaurant dining is 5% (non-AC) or 18% (with input credit). Knowing the rate prevents both surprise charges and incorrect billing. GST registration is mandatory for businesses with turnover above ₹40 lakh (₹20 lakh in some states); below that, GST is not charged.