Here are 100 GST (Goods and Services Tax) interview questions and answers, covering the Indian GST framework, concepts, compliance, and practical scenarios, ideal for accountants, finance professionals, and tax consultants.
GST Fundamentals
1. What is GST?
GST (Goods and Services Tax) is a single, destination‑based indirect tax levied on the supply of goods and services, right from the manufacturer to the consumer. It subsumed multiple central and state taxes in India from 1 July 2017.
2. What are the components of GST?
CGST (Central GST – levied by Centre on intra‑state supply), SGST (State GST – levied by State on intra‑state supply), IGST (Integrated GST – levied by Centre on inter‑state supply and imports), UTGST (Union Territory GST – for UTs without legislature).
3. What is the difference between intra‑state and inter‑state supply?
Intra‑state: supplier and place of supply are in the same state → CGST + SGST. Inter‑state: supplier and place of supply are in different states → IGST. Exports and imports are always treated as inter‑state.
4. What is the taxable event under GST?
Supply of goods or services or both. The earlier events like manufacture, sale, or provision of service have been replaced by the unified concept of “supply”.
5. What is a composite supply? Give an example.
Two or more goods/services naturally bundled and supplied together, where one is the principal supply. Example: a laptop sold with a carry bag; the principal supply is the laptop, so the entire package is taxed at the laptop’s GST rate.
6. What is a mixed supply? Example.
Two or more individual goods/services supplied together for a single price, but not naturally bundled. Example: a Diwali gift box containing dry fruits (5% GST) and chocolates (18% GST). The mixed supply is taxed at the highest rate of any component, i.e., 18%.
7. What are the main taxes subsumed under GST?
Central: Excise Duty, Service Tax, Additional Customs Duty (CVD), Special Additional Duty, Central Sales Tax. State: VAT, Entry Tax, Octroi, Luxury Tax, Entertainment Tax, Purchase Tax.
8. What is GSTIN?
A 15‑digit Goods and Services Tax Identification Number based on PAN. Format: 2‑digit state code, 10‑digit PAN, 1 entity code, 1 blank, 1 check digit.
9. What is the GST Council?
A constitutional body chaired by the Union Finance Minister with State/UT Finance Ministers as members. It recommends tax rates, exemptions, threshold limits, and all procedural matters.
10. What is the difference between GST and the old VAT system?
GST is a unified, destination‑based tax with seamless input tax credit across states and between goods/services. VAT was state‑specific, had cascading effect, and no cross‑credit between goods and services.
Registration
11. What is the threshold limit for mandatory GST registration?
For goods: aggregate turnover exceeding ₹40 lakhs (₹20 lakhs for special category states). For services: ₹20 lakhs (₹10 lakhs for special category states).
12. Who must register for GST irrespective of turnover?
Inter‑state suppliers (except certain exempted services), casual taxable persons, non‑resident taxable persons, e‑commerce operators required to collect TCS, persons liable to deduct TDS, and input service distributors.
13. What is a casual taxable person?
Someone who occasionally supplies goods/services in a state where they have no fixed place of business. They must register for 90 days and pay advance tax.
14. What is the composition scheme?
A simplified scheme for small taxpayers with turnover up to ₹1.5 crore (goods) or ₹50 lakhs (services). They pay a flat rate (1%/5%/6%) on turnover but cannot claim ITC, issue taxable invoices, or make inter‑state supplies.
15. What documents are required for GST registration?
PAN, Aadhaar, proof of business registration, address proof, bank account details (cancelled cheque), digital signature (for companies/LLPs), and photograph of authorised signatory.
16. Can a person have multiple GSTINs?
Yes, for each State/UT a separate registration is required. One PAN can obtain multiple GSTINs (one per state) under the same legal entity.
17. What is a GST registration certificate?
A digitally signed document containing GSTIN, legal/trade name, address, date of liability, and type of registration. It must be displayed at the place of business.
18. What is an Input Service Distributor (ISD)?
An office of a taxpayer that receives invoices for services used by multiple branches and distributes the ITC (CGST/SGST/IGST) to the respective branches through a prescribed mechanism.
19. What is a Unique Identification Number (UIN)?
Issued to foreign diplomatic missions and UN bodies for claiming refund of taxes. It is not a normal registration.
20. How can a registration be cancelled?
By the taxpayer (application in FORM GST REG‑16) or by the department (suo‑moto) after issuing a show‑cause notice. All liabilities must be cleared before cancellation.
Time, Place & Value of Supply
21. What is time of supply for goods under forward charge?
Date of invoice or date of receipt of payment, whichever is earlier. For supply involving movement: date of issue of invoice or last date for issue of invoice, whichever is earlier, or date of receipt of payment, whichever is earlier.
22. What is time of supply for services under forward charge?
Date of issue of invoice or date of receipt of payment, whichever is earlier. If invoice not issued within 30 days (45 days for banks), time is date of completion of service or date of receipt of payment, whichever is earlier.
23. What is time of supply under reverse charge mechanism?
For goods: date of receipt of goods or date of payment, whichever is earlier, or 30 days from invoice date. For services: date of payment, or 61 days from invoice date if payment not made.
24. What is place of supply for goods?
Generally, the location where the goods are delivered (movement terminates). For goods not involving movement, the location of goods at the time of delivery. For exports, the destination outside India.
25. What is place of supply for services?
For B2B: location of recipient. For B2C: location of recipient if address on record, else location of supplier. Specific rules apply for immovable property, events, transportation, etc.
26. What is transaction value under GST?
The price actually paid or payable for the supply, where supplier and recipient are not related and price is the sole consideration. It includes all incidental expenses, packing, commission, but excludes GST and discounts (subject to conditions).
27. What are the inclusions in transaction value?
Any taxes other than GST, packing charges, commission, royalty/licence fees, subsidies linked to supply (except government subsidies), late fees/penalties, and interest for delayed payment.
28. When can the transaction value be rejected by the department?
When the supplier and recipient are related, the transaction is not at arm’s length, or the price is not the sole consideration. In such cases, valuation is determined as per GST Valuation Rules.
29. How are discounts treated under GST?
Discounts given before or at the time of supply are excluded. Post‑supply discounts are allowed only if they were agreed upon before supply and can be linked to the relevant invoice.
30. What is the rule for valuation in a pure agent transaction?
Expenditure incurred as a pure agent (paying on behalf of the client with proper authorisation and no title in the goods) is not included in the value of supply.
Input Tax Credit (ITC)
31. What is Input Tax Credit?
Credit that a registered taxpayer can claim for the GST paid on purchases (inputs, input services, capital goods), which is set off against output tax liability.
32. What conditions must be satisfied to claim ITC?
Possession of a valid tax invoice/debit note, actual receipt of goods/services, tax has been paid to the government, valid GSTR‑3B filed, and the taxpayer is not under composition.
33. What is the time limit to avail ITC?
ITC on any invoice/debit note must be claimed by the earlier of: due date of filing annual return for that financial year or the date of filing the annual return. As per amended Section 16(4), ITC for a financial year must be claimed by 30th November of the following year.
34. What is blocked credit under Section 17(5)?
ITC is not available for: motor vehicles (except for specific businesses), food & beverages, outdoor catering, beauty treatment, health services, rent‑a‑cab, travel benefits to employees, and goods/services used for personal consumption.
35. Explain the order of ITC set‑off.
IGST credit must be first used against IGST output, then CGST, then SGST. CGST credit against CGST, then IGST. SGST credit against SGST, then IGST. CGST and SGST cannot be cross‑utilised.
36. What is GSTR‑2A and GSTR‑2B?
GSTR‑2A is a dynamic read‑only statement of inward supplies. GSTR‑2B is a static monthly statement generated on the 14th, showing the ITC available for that month. ITC in GSTR‑3B should not exceed GSTR‑2B.
37. What happens if ITC claimed is more than GSTR‑2B by a specified threshold?
Rule 88D mandates that the taxpayer be informed via DRC‑01C to either pay the excess with interest or explain the difference with proof.
38. How is ITC reversal calculated for exempt supplies?
Common inputs/input services used partly for taxable and partly for exempt supplies require proportionate reversal as per Rule 42. For capital goods, 5% per quarter of common credit is to be reversed (Rule 43).
39. What is the 180‑day payment rule for ITC?
If the recipient does not pay the supplier within 180 days from the invoice date, the ITC availed must be reversed with interest. It can be reclaimed once payment is made.
40. Can ITC be claimed on capital goods?
Yes, full ITC on capital goods is available in one go. If the capital goods are later sold, output tax is payable on the transaction value.
41. What happens to ITC when switching to composition scheme?
ITC on inputs, capital goods held in stock, and semi‑finished/finished goods as on the date of switch must be reversed (paid back).
42. Is ITC allowed on works contract services?
Yes, if used for furtherance of business (e.g., construction of a factory shed for own use is plant and machinery, ITC allowed). However, ITC for construction of immovable property (other than plant & machinery) for own use is blocked.
43. What is provisional ITC?
The term is now obsolete; ITC is claimed based on self‑assessment and must match GSTR‑2B. There is no provisional ITC separate from final ITC.
44. Can ITC be claimed on goods lost or stolen?
No, ITC on goods lost, stolen, destroyed, written off, or given as free samples must be reversed.
45. What is the difference between ITC on inputs and input services?
Inputs are tangible goods used in business; input services are services used. Both qualify for ITC, but some services are blocked (e.g., outdoor catering).
Invoicing & E‑Way Bill
46. What are the mandatory fields in a GST tax invoice?
Supplier’s name, GSTIN, address, invoice serial number, date, recipient’s GSTIN, HSN/SAC, description, quantity, unit price, total value, tax rate, tax amount, place of supply, and signature.
47. What is the time limit to issue an invoice for goods?
At the time of removal/delivery of goods. For continuous supply, at the end of the period for which payment is due.
48. What is the time limit to issue an invoice for services?
Within 30 days from the date of supply (45 days for banks, NBFCs, and financial institutions).
49. What is a bill of supply?
Issued by composition dealers and for exempt supplies; it does not charge tax and cannot enable ITC.
50. What is a debit note and credit note under GST?
Debit note: issued when tax chargeable is less than originally invoiced. Credit note: issued when tax is overcharged or goods are returned. Both reference the original invoice.
51. What is an e‑invoice?
A B2B invoice electronically authenticated by the Invoice Registration Portal (IRP) with a unique IRN and QR code. Mandatory for taxpayers above a turnover threshold (currently ₹5 crore for many).
52. How is an e‑invoice generated?
The taxpayer uploads invoice data in JSON to the IRP; IRP validates, signs, and returns the e‑invoice with a QR code. It is then valid to issue.
53. What is an e‑way bill?
An electronic document required for the movement of goods valued over ₹50,000. It contains consignor, consignee, transporter, goods, and vehicle details. Generated on the e‑way bill portal.
54. When is an e‑way bill not required?
For exempt goods, movement within the same state for some categories, transport by non‑motorised vehicles, and where goods are covered by an invoice with QR code in certain cases.
55. What is the validity of an e‑way bill?
Based on distance: up to 200 km – 1 day; for every additional 200 km or part – one extra day. For over‑dimensional cargo, 1 day for 20 km.
56. Can an e‑way bill be cancelled?
Yes, within 24 hours of generation. Once cancelled, the number cannot be reused.
57. What is the penalty for transporting goods without an e‑way bill?
Detention of goods and penalty of upto 10% of the value of goods or ₹10,000, whichever is higher (Section 129).
58. What is the role of a transporter in e‑way bill?
They can generate Part B with vehicle details, carry the e‑way bill, and update vehicle number if changed.
59. Is HSN required on invoices for all taxpayers?
For turnover up to ₹5 crore: 4‑digit HSN for B2B supplies; nil for B2C. Above ₹5 crore: 6‑digit HSN.
60. What is an e‑invoice QR code?
A quick‑response code on the e‑invoice containing the IRN, GSTIN, invoice number, date, value, and tax. It can be verified instantly.
Returns & Payment
61. What are the main GST returns?
GSTR‑1 (outward supplies), GSTR‑3B (summary return), GSTR‑4 (composition yearly), GSTR‑9 (annual return), and GSTR‑9C (reconciliation statement for large taxpayers).
62. What is the due date for GSTR‑1?
Monthly (turnover >₹5 crore): 11th of next month. Quarterly (QRMP scheme): 13th of the month after the quarter.
63. What is the due date for GSTR‑3B?
Monthly: 20th/22nd/24th of next month depending on turnover. QRMP filers: 22nd/24th after the quarter ends.
64. What is the QRMP scheme?
Quarterly Return Monthly Payment scheme for taxpayers with turnover up to ₹5 crore. They file returns quarterly but pay tax monthly via PMT‑06 challan.
65. What is the difference between GSTR‑1 and GSTR‑3B?
GSTR‑1 is a statement of all outward supplies. GSTR‑3B is a summary of total sales, ITC, and net tax payable, filed as a return. Both must match.
66. Can a GST return be revised?
No. Errors are corrected in the next period’s return, and adjustments are finalised in the annual return.
67. What is the penalty for late filing of GSTR‑3B?
Late fee: ₹50/day (₹25 CGST + ₹25 SGST) for normal returns; ₹20/day for nil returns. Maximum late fee is capped at ₹5000 per return. Interest on net tax liability at 18% p.a.
68. What is the annual return deadline?
GSTR‑9 must be filed by 31st December of the subsequent financial year.
69. How is tax paid under GST?
Through the electronic cash ledger (deposits via challan) and electronic credit ledger (ITC). Both are used when filing GSTR‑3B.
70. What is the difference between electronic cash ledger and electronic credit ledger?
Cash ledger shows all cash payments made through challans. Credit ledger shows ITC available for set‑off. Both balance can be used to discharge liability.
71. Can ITC be used to pay interest and penalties?
No. Interest, late fees, and penalties must be paid in cash only.
72. What is the consequence of excess ITC claim?
If ITC claimed exceeds GSTR‑2B beyond a threshold, the department issues DRC‑01C. The taxpayer must pay the excess or explain the difference.
73. What is reversed charge mechanism (RCM)?
Tax is paid by the recipient of goods/services instead of the supplier. Applicable for specified goods/services and when unregistered suppliers supply to registered persons.
74. What is the aggregate turnover for determining filing frequency?
All‑India PAN‑based total of all taxable supplies, exempt supplies, exports, and inter‑state supplies. If above ₹5 crore, monthly filing is mandatory.
75. What is the PMT‑06 challan?
A challan for making monthly tax payment under the QRMP scheme. It is generated on the GST portal and paid in cash, independent of GSTR‑3B.
Refunds, Exports & Imports
76. When is a GST refund available?
Export of goods/services, excess payment of tax, ITC accumulation due to inverted rate structure, supply to SEZ units, and refund of pre‑deposit for appeals.
77. What is an inverted duty structure refund?
When input tax rate is higher than output tax rate, leading to unutilised ITC. Refund is available subject to restrictions.
78. What is the time limit to apply for a refund?
Two years from the relevant date (export date, payment date, order date, etc.).
79. What is LUT (Letter of Undertaking)?
A document submitted by exporters to export goods/services without payment of IGST, instead of paying and claiming refund. It requires no bank guarantee for eligible exporters.
80. How are imports taxed under GST?
Imports are inter‑state supplies; IGST is levied on goods at the time of import (along with Basic Customs Duty). Services imported are taxed under reverse charge.
81. What is zero‑rated supply?
Exports and supplies to SEZ are zero‑rated. The supplier can supply under bond/LUT without tax and claim ITC refund, or supply with IGST and claim IGST refund later.
82. What is the deemed export concept?
Supplies where goods do not leave India but are considered exports (e.g., supply against Advance Authorisation, to EOU). Some qualify for refund.
83. How is refund of ITC on exports processed?
File application in RFD‑01. Provisional refund of 90% within 7 days; balance after officer’s order. Refund credited via PFMS.
Composition, Exemptions & Special Cases
84. What is the composition levy (Section 10)?
Eligible taxpayers (turnover ≤₹1.5 crore for goods, ₹50 lakhs for services) pay a flat rate on turnover without ITC. Cannot make inter‑state supplies.
85. Who cannot opt for the composition scheme?
Inter‑state suppliers, casual/non‑resident persons, e‑commerce operators, manufacturers of notified goods (ice cream, pan masala, tobacco), and most service providers.
86. What is a composite dealer (service provider) scheme?
Service providers with turnover up to ₹50 lakhs can opt for composition at 6% (CGST+SGST) without ITC.
87. What goods/services are exempt from GST?
Fresh vegetables, fruits, milk, bread, educational services, healthcare, public transport, and many items under exemption notifications.
88. What is the difference between exempt supply and zero‑rated supply?
Exempt: no tax, no ITC. Zero‑rated: tax rate 0%, but ITC is available on inputs (exports, SEZ).
89. What is a Non‑Resident Taxable Person?
A person who occasionally supplies in India but has no fixed place of business in India. Must register for 90 days and deposit advance tax.
90. What is an OIDAR service?
Online Information Database Access and Retrieval services (e.g., streaming, cloud services). Foreign providers must register and collect GST in India.
Audit, Assessment & Litigation
91. What is the turnover limit for GST audit?
Previously, turnover above ₹2 crore required a CA‑certified GSTR‑9C. Since FY 2020‑21, the audit report requirement is replaced by a self‑certified reconciliation statement (part of GSTR‑9), though the annual return is still filed.
92. What are the types of assessment under GST?
Self‑assessment, provisional assessment, scrutiny assessment, best judgment assessment (for non‑filers), and assessment of unregistered persons.
93. What is the time limit for issuing a show‑cause notice for demand?
Normal: 33 months from the due date of annual return for that year. Fraud/suppression: 5 years.
94. What is penalty for not issuing an invoice?
Under Section 122, penalty of ₹10,000 or an amount equal to tax evaded, whichever is higher.
95. Can a taxpayer be prosecuted for GST offences?
Yes, for serious offences like tax evasion above a threshold, issuing false invoices, or repeat offences, imprisonment can be imposed.
Recent Updates & Scenarios
96. A supplier charged 18% GST but correct rate is 12%. How is this rectified?
The supplier issues a credit note to adjust the excess tax; the recipient must reverse excess ITC if claimed. Both reflect in their returns.
97. What is Rule 88D and DRC‑01C?
Rule 88D requires explanation when ITC in GSTR‑3B exceeds GSTR‑2B beyond a threshold. DRC‑01C is the notice form asking the taxpayer to pay the excess or explain.
98. What happens if an exporter does not receive foreign exchange within FEMA time limit?
The supply ceases to be an export; it becomes a taxable supply and the exporter must pay IGST with interest and return any refund.
99. What is the Invoice Management System (IMS) on the GST portal?
IMS allows taxpayers to accept/reject/pending inward supply records. Accepted records flow to GSTR‑2B, reconciling mismatches before filing.
100. What is the validity of a registration certificate if not cancelled?
GST registration is valid until cancelled. There is no expiry, but changes in business details must be updated. Failure to file returns for 6 continuous months may lead to suo‑moto cancellation.
Conclusion
You’ve reached the final question, and a deep, quiet sense of satisfied accomplishment is settling in. The input tax credit, the return filing, the composition scheme, the e-way bill rules — concepts that once felt tangled are now laid out clearly in your mind. You didn’t just memorize definitions. You built real understanding, and that feeling is genuinely fulfilling.
Now comes the best part: you’re thrilled. Not anxious, not dreading the interview — genuinely thrilled to step into that room and finally show a future employer just how well you know India’s biggest tax reform. Your answers will carry weight. Your confidence will carry the conversation. And when the offer arrives, it’ll be the sweetest reward for all the honest work you put in. Walk in satisfied with your preparation and thrilled for the opportunity ahead. You’re ready to shine.