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CHSE Odisha Vocational Tax Assistance study materials
CHSE Odisha Vocational Tax Assistance study resources

CHSE Odisha Vocational Tax Assistance: Goods and Services Tax (GST) Basics and Compliance

CHSE Odisha Vocational Tax Assistance · Work through your exam, one topic at a time.

All guide sections

Goods and Services Tax (GST) Basics and Compliance

What this domain tests

This domain tests the basic GST model, registration, taxable supply, input tax credit, returns, and invoicing. GST is a destination-based indirect tax on supply, not a tax on income.

Core rules

  • GST was introduced by the Constitution (101st Amendment) Act and came into force on 1 July 2017. It is a dual model: intra-State supplies attract CGST and SGST (or UTGST), while inter-State supplies attract IGST.
  • The taxable event is “supply” of goods or services for consideration in the course or furtherance of business, including specified supplies without consideration.
  • Registration thresholds are generally ₹40,00,000 for goods and ₹20,00,000 for services, with lower thresholds in special category States. Voluntary registration is possible.
  • The composition scheme allows small taxpayers to pay a flat percentage of turnover, but the supplier cannot generally claim input tax credit and cannot make inter-State outward supplies.
  • Input tax credit is available on inputs, input services, and capital goods used for business, subject to conditions: possession of a valid tax invoice, receipt of goods or services, payment of tax by the supplier, and filing of returns.
  • Common returns are GSTR-1 for outward supplies, GSTR-3B for summary return and tax payment, and GSTR-9 as the annual return. An e-way bill is required for movement of goods above the prescribed value.

Worked example

A dealer in Odisha sells goods within the State for ₹1,00,000, attracting GST at 18%. The tax is CGST 9% = ₹9,000 and SGST 9% = ₹9,000. If the dealer had paid ₹6,000 GST on purchases used for this supply and holds a valid invoice, the net cash payable is ₹18,000 − ₹6,000 = ₹12,000. Reasoning: the place of supply determines CGST/SGST versus IGST; input tax credit reduces the output liability only if the conditions are satisfied.

Traps

Do not charge IGST on an intra-State supply. Composition dealers cannot generally claim input tax credit. A tax invoice is not the same as a bill of supply. ITC is not available on blocked credits or personal consumption.