Mastering GST Interview Questions: A Comprehensive Guide

As we probe into the more complex facets of GST, anticipated GST interview questions demand a profound comprehension of the tax system.

GST Registration Nuances

Businesses surpassing a certain revenue threshold must register for GST. Discuss the steps involved in GST registration and highlight the repercussions of non-compliance with registration requirements. Understand the finer points of GST registration, such as special provisions for casual taxable persons, non-resident taxable persons, and the nuances of voluntary registrations. Discuss the importance of timely updates to registration details and the impact of GST on different business models.

GST Returns and Regulatory Adherence

Detail the array of GST returns, along with their respective submission deadlines. Illuminate the penalties linked with the failure to comply with GST mandates. Elucidate on the process of filing annual returns and the significance of the GST audit. Discuss the implications of anti-profiteering measures under GST and how businesses must adapt to maintain compliance.

Navigating GST Rates and Classification

Engage in a dialogue about the diverse GST rates and the process of categorizing goods and services under GST. Clarify the role of HSN (Harmonized System of Nomenclature) codes within this context.HSN codes are more than just a classification system; they are essential for accurate tax invoicing and international trade. Discuss how businesses should approach the selection of HSN codes and the implications of incorrect classification.

The Edge of GST Input Tax Credit (ITC)

Input Tax Credit is a cornerstone of GST, offering fiscal advantages to businesses. Elucidate the prerequisites for claiming ITC and how it fosters a business-friendly tax environment.Explore the complexities of the ITC mechanism, such as the conditions under which ITC can be reversed, or blocked, and the documentation required to substantiate ITC claims. Discuss the concept of provisional ITC and its reconciliation with final ITC.

Can you explain the concept of GST and its impact on the Indian economy?

GST, or Goods and Services Tax, is a comprehensive, multi-stage, destination-based tax that is levied on every value addition in the supply chain of goods and services. Its implementation has significantly impacted the Indian economy by streamlining the indirect tax regime, eliminating the cascading effect of taxes, and ensuring a uniform tax structure across the country. GST has improved the ease of doing business by simplifying compliance procedures and has increased government revenues by broadening the tax base and reducing tax evasion. It has also facilitated the creation of a common national market, which has led to improved competitiveness of Indian goods and services in the global market.

What is the difference between CGST, SGST, and IGST?

CGST (Central Goods and Services Tax) is the tax levied by the Central Government on intra-state supplies of goods and services. SGST (State Goods and Services Tax) is the tax levied by the respective State Governments on intra-state supplies. Both CGST and SGST are charged simultaneously on the same transaction but are accounted for separately.

IGST (Integrated Goods and Services Tax) is charged on inter-state supplies of goods and services, as well as on imports. It is collected by the Central Government and then distributed between the states. The purpose of IGST is to ensure that the state where the goods or services are consumed gets the tax revenue.

Discuss the concept of Input Tax Credit (ITC) in GST and how it benefits businesses.

Input Tax Credit (ITC) is a mechanism in the GST system that allows businesses to reduce the taxes they owe on their sales by the amount of GST they have paid on their purchases. This means that businesses can claim credit for the tax they have already paid on inputs used in the production or delivery of goods and services. The benefit of ITC is that it reduces the cost of inputs for businesses, prevents the cascading effect of taxes, and ensures that tax is paid only on the value-added at each stage of the supply chain. ITC also encourages tax compliance among businesses, as it can only be claimed if the supplier has paid the corresponding GST to the government.

Explain the GST registration process and the consequences of not registering under GST.

GST registration is mandatory for businesses whose turnover exceeds the prescribed threshold limit, as well as for certain other categories of suppliers regardless of their turnover. The process involves submitting an application online through the GST portal, providing necessary documents such as PAN, business registration proof, bank account details, and the details of business activities.

Businesses that fail to register for GST despite being required to do so face several consequences. These include the inability to collect GST from customers, no entitlement to claim ITC, and penalties that may include a fine and/or imprisonment. Additionally, non-registered businesses may face a credibility issue with their clients who may prefer to deal with GST-compliant suppliers.

How are goods and services classified under GST, and what is the significance of HSN and SAC codes?

Goods and services under GST are classified according to the Harmonized System of Nomenclature (HSN) for goods and the Service Accounting Codes (SAC) for services. These codes are used to standardize the classification of products and services across the world and are crucial for determining the applicable GST rates.

HSN codes are six to eight-digit codes that classify goods systematically. The first two digits represent the chapter under which the goods fall, the next two represent the heading level, and the subsequent digits represent the product details. SAC codes are similar but are used for services and consist of a system of classification that results in a six-digit code for identifying the nature of the service.

The significance of HSN and SAC codes is that they provide a common language for businesses and tax authorities to identify goods and services, which simplifies the process of levying the correct rate of GST. Accurate classification is essential for compliance, as incorrect classification can lead to penalties and interest on unpaid taxes.

Describe the various GST returns and their due dates.

GST returns are documents filed by registered taxpayers that summarize their sales, purchases, tax collected on sales (output tax), and tax paid on purchases (input tax). There are several types of GST returns, each with specific due dates:

GSTR-1: Filed by regular taxpayers detailing outward supplies. Due on the 11th of the following month.

GSTR-2A: Auto-populated return for purchases. It is a read-only document.

GSTR-3B: Summary return of outward supplies and input tax credit claimed. Due on the 20th of the following month.

GSTR-4: Filed by taxpayers registered under the Composition Scheme, on a quarterly basis. Due on the 18th of the month following the quarter.

GSTR-5: Filed by non-resident foreign taxpayers. Due on the 20th of the following month.

GSTR-6: Filed by Input Service Distributors (ISDs). Due on the 13th of the following month.

GSTR-7: Filed by taxpayers deducting TDS. Due on the 10th of the following month.

GSTR-9: Annual return filed by regular taxpayers. Due on 31st December of the following financial year.

Filing GST returns by their due dates is essential to avoid interest and late fees. It’s also important for the reconciliation of Input Tax Credits and for maintaining a good compliance rating.

These questions and answers should provide a solid framework for preparing for a GST interview. Remember, each answer should be tailored to reflect the most current laws and practices, as GST regulations are subject to change.