GST basics: the records behind your returns

Start with the idea

Goods and Services Tax (GST) is a tax on supplies of goods and services. The applicable treatment depends on the transaction. Registration, tax rates and filing obligations are separate questions: knowing one does not settle the others.

A GSTIN is your GST registration identifier. Output tax relates to your sales; input tax credit (ITC) concerns eligible tax on purchases. A purchase invoice is not automatically proof that every amount is claimable.

A simple example

Suppose a business sells a service for ₹10,000 before tax. The business should first establish the correct classification, rate and place of supply. It then records the invoice value and applicable tax separately. The money received from the customer must be matched to the invoice, rather than treated as a second sale.

This example explains the record flow. It does not prescribe a GST rate or decide whether that business must register.

Your starter checklist

• Identify your GSTIN and registration type, if registered.
• Maintain a numbered sales register with invoice dates and customer details.
• Keep purchase invoices and credit/debit notes alongside the registers.
• Separate invoice values from tax amounts in your records.
• Record questions about classification or unusual transactions for review.

What to check before acting

This is an introductory India-wide guide, not a registration threshold or rate table. Your business activity, locations and supplies need individual assessment. Use current official rules for those decisions.

Official reference: CBIC overview of GST.

Next: Understand GSTR-1 and GSTR-3B.

Take the next step

Return to the beginner learning paths. If you want help applying this to your records, explore our GST filing service.