GST Interview Questions and How to Answer Them

GST Interview Questions 

Acing the GST interview questions in your job interview can help you stand out from the competition and show your expertise in this area.

Are you preparing for a job interview that involves GST?

To help you succeed in your interview, we have compiled a list of basic GST interview questions and provided detailed answers to guide your understanding of the concepts.

Keep reading to discover helpful tips and valuable information on basic GST interview questions and answers

Basic knowledge GST interview questions.

1. Can you explain the GST compliance requirements for businesses in India and how you ensure that the organization is compliant?

"The GST compliance requirements for businesses in India include registering for GST, filing GST returns, paying the GST due, and maintaining proper records and documentation. To ensure compliance, we have developed and implemented policies and procedures for GST compliance, including training for relevant staff, regular reviews and audits, and working with external advisors as needed. We also have systems and processes to track and manage our GST liability, input tax credits, and other GST-related transactions."

2. What are the different GST rates in India?

India has four GST rates: 5%, 12%, 18%, and 28%. The GST Council, a body of central and state finance ministers, decides the GST rates for different goods and services. Some goods and services are also exempt from GST or taxed at a reduced rate. 

3. How does the GST impact businesses in India?

The GST has had a significant impact on businesses in India. It has replaced several indirect taxes, including the value-added tax (VAT), service tax, and central excise duty, and has streamlined the tax system. Businesses are now required to register for GST and file monthly returns, which can be time-consuming. However, the GST has also made it easier for businesses to claim input tax credits, which can reduce their overall tax burden. 

4. What are the challenges faced by businesses in implementing the GST in India?

One of the main challenges businesses face in implementing the GST in India has been the need to adapt to the new tax system and comply with the GST requirements. This has involved setting up new systems and processes, such as registering for GST, filing monthly returns, and keeping accurate records. Some businesses also need help understanding the GST rules and determining the correct GST rate for their goods and services.

5. How has the GST impacted the economy in India?

The GST has had a mixed impact on the economy in India. On the one hand, it has simplified the tax system and made it easier for businesses to operate across state borders. On the other hand, the GST has led to an increase in the prices of some goods and services, affecting consumers. The GST has increased government revenue and positively impacted the Indian economy.

6. Can you explain the difference between CGST and SGST?

The CGST (Central GST) and SGST (State GST) are two components of the GST in India. The central government collects the CGST, and the state government collects the SGST. The CGST and SGST are levied on the same base and at the same rate, and the GST collected is shared between the central and state governments.

7. How does the GST impact the export of goods and services from India?

Exports of goods and services from India are generally zero-rated under the GST, meaning they are not subject to GST. Exporters can claim a refund of the GST paid on their inputs, which helps to reduce the cost of exporting goods and services from India. 

8. Can you explain the concept of reverse charge under the GST?

The reverse charge mechanism under the GST applies to certain supplies of goods or services where the recipient is liable to pay the GST instead of the supplier. This typically occurs when the supplier needs to be registered for GST or eligible to collect GST. The reverse charge mechanism helps to ensure that GST is collected on all taxable supplies, even if the supplier is not registered for GST.

9. How does the GST impact small businesses in India?

The GST has had a significant impact on small businesses in India. Small businesses with a turnover of up to INR 40 lakh (about $55,000) are generally eligible for the composition scheme, which allows them to pay GST at a reduced rate and file simplified returns. However, small businesses are still required to comply with the GST requirements, which can be burdensome. Some small businesses also need help understanding the GST rules and determining the correct GST rate for their goods and services.

10. Can you explain the difference between inter-state and intra-state supplies under the GST?

Under the GST in India, inter-state supplies refer to goods or services made from one state to another. Intra-state supplies refer to goods or services made within the same state. Interstate supplies are subject to the Integrated GST (IGST) collected by the central government. In contrast, intra-state supplies are subject to the CGST and SGST, which the central and state governments collect.

11. Can you explain the concept of GST registration and why it is essential?

GST registration is obtaining a GST identification number (GSTIN) and becoming a registered taxpayer under the GST in India. GST registration is required for businesses that exceed the prescribed threshold for GST registration (currently INR 40 lakh, or about $55,000) or that are engaged in certain specified activities. GST registration is crucial because it allows businesses to claim input tax credits and comply with the GST requirements, such as filing GST returns and paying the GST due. GST registration also helps to ensure that GST is collected on all taxable supplies, which helps to reduce tax evasion and improve tax compliance.

Input credit GST Interview Questions

1. Can you explain the GST input tax credit mechanism and how you manage and optimize input tax credits for the organization?

"The GST input tax credit mechanism allows businesses to claim credits for the GST paid on their inputs against their GST liability on their outputs. To manage and optimize input tax credits, we have systems and processes to track and verify the GST paid on our inputs and to claim input tax credits as applicable. We also work with our suppliers to ensure that they are registered for GST and can provide us with valid GST invoices. We regularly review and optimize our input tax credits to ensure we are claiming the maximum available credits."

2. Can you explain the concept of GST credit matching and how it works in India?

GST credit matching is a process used to ensure that the input tax credits claimed by businesses are accurate and valid. Under GST credit matching, the GST authorities compare the input tax credits claimed by businesses with the GST paid by their suppliers. If the input tax credits claimed by a business do not match the GST paid by its suppliers, the business may be required to pay additional GST or may not be allowed to claim the input tax credits. GST credit matching helps to reduce tax evasion and improve tax compliance.

3. Can you explain the GST input tax credit reversal concept and how it works in India?

GST input tax credit reversal refers to reversing the input tax credits claimed by a business in certain circumstances. Input tax credit reversal may be required if a business has claimed input tax credits on inputs that have not been used for the supply of taxable goods or services or if the input tax credits have been claimed more than the GST liability on the outputs. Input tax credit reversal can be complex and require businesses to pay additional GST or adjust their GST returns.

4. Can you explain the concept of GST transitional credit and how it works in India?

GST transitional credit refers to the credit businesses could claim for the taxes paid under the previous tax system (e.g., VAT, service tax, etc.) upon implementing the GST. GST transitional credit was available to businesses registered under the previous tax system that had paid taxes on their inputs. GST transitional credit was intended to help businesses transition to the GST and mitigate the impact of the GST on their cash flow

5. Can you explain the concept of GST provisional credit and how it works in India?

GST provisional credit refers to the credit businesses that can claim for the GST paid on their inputs while their GST registration application is being processed. GST provisional credit is available to businesses that have applied for GST registration but have yet to receive their GSTIN (GST identification number). GST provisional credit is subject to certain conditions and restrictions and must be claimed within a specified time frame

6. Can you explain the GST input tax credit mechanism and how you manage and optimize input tax credits for the organization?

 "The GST input tax credit mechanism allows businesses to claim credits for the GST paid on their inputs against their GST liability on their outputs. To manage and optimize input tax credits, we have systems and processes to track and verify the GST paid on our inputs and to claim input tax credits as applicable. We also work with our suppliers to ensure that they are registered for GST and can provide us with valid GST invoices. We regularly review and optimize our input tax credits to ensure we are claiming the maximum available credits."

Place of Supply Concept question GST Interview Questions

1. Can you explain the concept of a place of supply under the GST?

The place of supply under the GST determines whether a supply of goods or services is considered an inter-state or intra-state supply. The place of supply is generally determined based on the location of the supplier and the recipient, as well as the type of goods or services being supplied. The place of supply is essential for determining the applicable GST rate and the jurisdiction responsible for collecting the GST.

2. What are the GST place of supply rules for electronic commerce transactions, and how do they differ from those for other supplies?

The GST place of supply rules for electronic commerce transactions determines the GST rate and jurisdiction that applies to the supply of goods or services through electronic means, such as online or digital platforms. The GST place of supply rules for electronic commerce transactions differs from those for other supplies in that they generally apply to supplies made to non-taxable online recipients, regardless of the location of the supplier or recipient.

Returns and compliances GST Interview Questions

1. Can you explain how the GST transition to the new return filing system (GST Suvidha Provider or GSP) has impacted the organization's GST compliance and liability?

A finance manager might answer this question as follows: "The GST transition to the new return filing system (GST Suvidha Provider or GSP) refers to the implementation of the new system for filing GST returns, which replaces the previous system (GST Common Portal or GSTCP). The GST transition to the new return filing system has had an impact on our GST compliance and liability in several ways, including the need to update our systems and processes to accommodate the new return filing system, the availability of new features and functionality, and the need to train our staff on the new system. We have worked closely with our legal and compliance teams to ensure a smooth transition to the new return filing system and address potential issues or concerns."

2. Can you explain the concept of GST returns and how they are filed in India?

GST returns are documents businesses must file with the GST authorities to report their GST liability, input tax credits, and other details related to the supply of goods or services. There are several types of GST returns that businesses may be required to file, depending on their circumstances. GST returns are generally filed online using the GST portal, and businesses must file them monthly or quarterly, depending on their turnover and other factors.

3. Can you explain the concept of GST evasion and how it is prevented in India?

GST evasion refers to the unlawful practice of not paying the GST due to the supply of goods or services. GST evasion can be prevented in India through various measures, including audit and verification by the GST authorities, imposition of penalties and fines, and criminal prosecution in cases of severe GST evasion. The GST authorities rely on information and intelligence from taxpayers and the general public to detect and prevent GST evasion.

4. Can you explain the concept of GST liability and how it is calculated?

GST liability refers to the amount of GST that a business is required to pay to the government. GST liability is calculated based on the value of the taxable supplies of goods or services made by the business minus any input tax credits available. GST liability is generally calculated monthly, and businesses must file GST returns and pay the GST due by the specified deadline.

5. Can you explain the concept of GST compliance and why it is essential?

GST compliance refers to following the GST rules and requirements, including registering for GST, paying the GST due, and filing GST returns. GST compliance is substantial because it helps to ensure that businesses are paying the correct amount of GST and are not engaging in tax evasion or other forms of non-compliance. GST compliance also helps ensure businesses can claim input tax credits and other benefits available under the GST.

6. Can you explain the GST refund process and how you manage and optimize GST refunds for the organization?

"The GST refund process allows businesses to claim refunds for the GST paid more than their GST liability or for the GST paid on exports. To manage and optimize GST refunds, we have systems and processes to track and verify our GST liability, input tax credits, and claim GST refunds as applicable. We also work with our legal and compliance teams to ensure that we have the necessary documentation and information available to claim GST refund.

7. Can you explain the concept of GST anti-profiteering and how it is enforced in India?

GST anti-profiteering prevents businesses from unfairly increasing their prices after introducing the GST. The GST authorities have the power to investigate cases of GST anti-profiteering and can take action against businesses that are found to be engaging in GST anti-profiteering, including imposing fines and penalties. GST anti-profiteering is enforced through a combination of self-regulation by businesses and enforcement action by the GST authorities.

8. Can you explain the concept of GST fraud and how it is detected and prevented in India?

GST fraud is the unlawful practice of evading or claiming fraudulent input tax credits. GST fraud can be detected and prevented in India through various measures, including audit and verification by the GST authorities, data analytics, and information sharing with other government agencies. The GST authorities rely on information and intelligence from taxpayers and the general public to detect and prevent GST fraud.

9.  Can you explain the GST audit process and how you manage and prepare for GST audits for the organization?

"The GST audit reviews the organization's GST compliance and liability by the GST authorities. To manage and prepare for GST audits, we have systems and processes to track and verify our GST liability, input tax credits, and maintain proper records and documentation. We also have policies and procedures in place to ensure compliance with GST rules and requirements, and we work with our legal and compliance teams to address any potential issues or concerns. In the event of a GST audit, we work closely with the GST authorities and provide them with the necessary information and documentation to demonstrate our GST compliance."

10. Can you explain the concept of the GST composition scheme and how it works in India?

The GST composition scheme is a scheme that allows small businesses with a turnover of up to INR 40 lakh (about $55,000) to pay GST at a reduced rate and file simplified returns. Under the GST composition scheme, businesses are required to pay GST at a fixed rate on their turnover rather than on the value of their supplies. The GST composition scheme is optional and is available to businesses that meet specific eligibility criteria.

11. Can you explain the GST tax evasion risks and how you manage and mitigate these risks for the organization?

"GST tax evasion risks can arise when businesses deliberately evade GST or claim fraudulent input tax credits. To manage and mitigate these risks, we have implemented policies and procedures to ensure compliance with GST rules and requirements, including training for relevant staff, regular reviews and audits, and working with external advisors as needed. We also have systems and processes to track and verify our GST liability and input tax credits. We work with our suppliers to ensure that they are registered for GST and can provide us with valid GST invoices."

12. Can you explain the concept of GST transitional provision and how it works in India?

GST transitional provision refers to the provisions that were put in place to facilitate the transition from the previous tax system (e.g., VAT, service tax, etc.) to the GST in India. GST transitional provision includes measures such as GST transitional credit, GST provisional credit, and GST provisional assessment, which were intended to help businesses transition to the GST and mitigate the impact of the GST on their cash flow. GST transitional provision also includes treating stock and other assets under the GST.

E-way GST Interview questions

1. Can you explain the GST e-way bill system and how you manage and generate e-way bills for the organization?

"The GST e-way bill is an electronic document that is required for the movement of goods valued at more than INR 50,000 (about $700) within or across states in India. To manage and generate e-way bills, we have systems and processes in place to track the movement of goods and to generate e-way bills as needed. We also ensure that our staff are trained on the e-way bill system and that we have the documentation and information available to efficiently and accurately generate e-way bills."

2. Can you explain the GST e-invoice system and how it works?

A finance manager might answer this question: "The GST e-invoice system is an electronic invoicing system that allows businesses to generate, transmit, and store invoices electronically. The GST e-invoice system requires businesses to generate an e-invoice for each supply of goods or services, which is then transmitted to the GST Common Portal (GSTCP) and stored electronically. The e-invoice is then used to generate the GST return for the business."

3. Can you explain the GST valuation rules for services and how they differ from those for goods?

A finance manager might answer this question: "The GST valuation rules for services determine the value of services for GST and are based on the principles of arm's length pricing. The GST valuation rules for services differ from those for goods in that they generally apply to services provided by unrelated parties. In contrast, the rules for goods apply to the transfer of ownership of goods. The GST valuation rules for services also consider the nature and terms of the service, as well as the supplier's and recipient's location."

4.  Can you explain the GST self-assessment process and how you manage and optimize GST self-assessment for the organization?

A finance manager might answer this question: "The GST self-assessment process allows businesses to calculate and pay their GST liability based on their estimates and records. To manage and optimize GST self-assessment, we have systems and processes in place to track and verify our GST liability, input tax credits, and calculate and pay our GST liability as required. We also ensure that we have the documentation and information available to support our GST self-assessment and that we have trained our staff on the GST self-assessment process. We regularly review and optimize our GST self-assessment to ensure that we comply with GST rules and requirements."

GST on Different Sectors

1.How does GST apply to the manufacturing sector?

Answer: Under GST, manufacturers must pay tax on the goods they produce and supply. The tax rate depends on the type of goods being manufactured. Manufacturers can also claim the input tax credit on the GST paid on their inputs (raw materials, machinery, etc.) and input services (transportation, consulting, etc.).

2. How is GST applicable to the trading sector?

Answer: Traders are required to pay GST on the goods they purchase from manufacturers or other traders and supply to their customers. Like manufacturers, traders can also claim input tax credits on the GST paid on their purchases. However, traders are not allowed to claim the input tax credit on goods or services used for personal consumption or for making taxable supplies exempt from GST.

3. How does GST impact the services sector?

Answer: GST applies to the services sector in the same way as it is to the manufacturing and trading sectors. Service providers must pay GST on the services rendered and are eligible to claim an input tax credit on the GST paid on their inputs and input services. The tax rate for services is generally higher than the rate for goods.

4. How does GST apply to e-commerce companies?

Answer: E-commerce companies are required to collect GST when they supply goods or services sold through their platform. The GST rate depends on the type of goods or services being sold. E-commerce companies must also file regular GST returns and maintain proper records of their sales and purchases.

5. How does GST apply to exports?

Answer: Exports are generally zero-rated under GST, which means that exporters can claim a refund of the GST paid on their inputs and input services. Exporters must also furnish a bond or a Letter of Undertaking (LUT) to the government before exporting their goods. The bond or LUT guarantees that the exporter will either pay the GST if the goods are sold in the domestic market or export the goods as per the declaration made in the bond or LUT.

GST interview questions for freshers

Q1. What is GST?

A1. GST stands for Goods and Services Tax, an indirect tax applicable throughout India that replaced many indirect taxes levied by the Central and State governments. It applies to all types of goods and services except those specifically exempted.

Q2. What is an input GST?

A2. Input GST is the tax paid on purchases made by a business or registered taxable person. The input GST can be claimed as a credit against the output GST (tax to be paid on sales) and can be used to reduce the tax liability of a business.

Q3. What is GST Payable?
A3. GST Payable is the tax amount paid on sales made by a business or registered taxable person. The GST payable is calculated by subtracting the input GST (tax paid on purchases) from the output GST (tax to be paid on sales).

Q4. How many Different Types of GST are there?
A4. There are three different types of GST: Central GST (CGST), State GST (SGST) and Integrated GST (IGST). CGST and SGST apply to intra-state transactions, and IGST to inter-state transactions.

Q5. What is the GST threshold?
A5. The GST threshold is the minimum turnover limit for businesses registered under the GST Act. It is currently set at Rs. 40 Lakhs for most states and Rs. 20 Lakhs for the North Eastern states.

Q6. What is the scope of GST?
A6. The scope of GST is wide, covering all goods and services except those specifically exempted. It applies to all inter-state and intra-state sales and imports and exports.

Q7. What are the duties and responsibilities of a GST practitioner?
A7. A GST practitioner is responsible for filing returns and helping businesses comply with GST laws. They must know GST laws, procedures and regulations and be able to provide advice and assistance on GST-related matters. They must also ensure that businesses are updated with changes in GST laws and regulations.

Registration GST interview questions

Question: Who is required to register for GST in India?

Answer: Businesses with an annual aggregate turnover exceeding ₹20 lakhs (₹10 lakhs for particular category states) must register for GST. Interstate suppliers, casual taxable persons, non-resident taxable persons, e-commerce operators, and those required to deduct TDS under GST are also mandated to register irrespective of their turnover.

 

Question: Can you describe the GST registration process?

Answer: The GST registration process involves the following steps:

1. Online Application: Visit the GST portal (gst.gov.in) and fill out the GST REG-01 form with details like PAN, email ID, and mobile number.
2. Verification: Receive OTPs on the provided email and mobile number for verification.
3. Submission of Documents: Upload required documents such as PAN card, proof of business registration, identity and address proof of promoters, business address proof, and bank account details.
4. ARN Generation: An Application Reference Number (ARN) is generated upon submission.
5. Application Processing: GST officers verify the application and documents.
6. GSTIN Issuance: A unique GST Identification Number (GSTIN) is issued if the application is approved.

 

Question: What are the different types of GST registrations available?

Answer: There are several types of GST registrations based on the nature of the business:

1. Regular Taxpayer: For businesses exceeding the turnover threshold or mandated by law.
2. Composition Scheme: This scheme allows small businesses with turnover up to ₹1.5 crore (₹75 lakhs for special category states) to opt to pay a fixed rate of tax on turnover.
3. Casual Taxable Person: This category applies to businesses operating temporarily in a state without a fixed place of business.
4. Non-Resident Taxable Person: For non-resident individuals or businesses supplying goods or services in India.
5. Input Service Distributor (ISD): This is for businesses distributing input tax credits to their branches.
6. E-commerce Operator: For operators facilitating online sales.

 

Question: Explain the concept of a composition scheme under GST.

Answer: The composition scheme is designed for small taxpayers to simplify compliance and reduce the tax burden. Businesses with an annual turnover of up to ₹1.5 crore (₹75 lakhs for particular category states) can opt for this scheme. Under this scheme, taxpayers pay a fixed percentage of their turnover as tax, with varying rates for manufacturers, traders, and restaurants. Composition dealers cannot claim input tax credits and cannot collect GST from their customers. They must file quarterly returns instead of monthly ones.

 

Question: What documents are required for GST registration?

Answer: The documents required for GST registration include:

 

1. PAN Card: PAN of the business or applicant.
2. Proof of Business Registration: Incorporation certificate or partnership deed.
3. Identity and Address Proof of Promoters: Aadhaar card, passport, driving license, or voter ID.
4. Business Address Proof: Electricity bill, rent agreement, or property tax receipt.
5. Bank Account Details: Bank statement, cancelled cheque, or passbook.
6. Photographs: Passport-sized photographs of the promoters or partners.

Closing Remark on GST interview questions

Mastering the intricacies of GST is essential for professionals navigating the complexities of India’s taxation landscape. By understanding the latest developments and preparing thoroughly for GST interview questions, candidates can demonstrate their expertise and readiness to tackle compliance challenges. 

 

Whether you’re an aspiring GST practitioner or an experienced professional, staying updated with current regulations and refining your knowledge will ensure you remain at the forefront of this dynamic field. Good luck with your preparation and future interviews!