GST (Goods and Services Tax) has transformed the way businesses operate in India, making it a crucial topic in job interviews for finance, accounting, and taxation roles. As a unified indirect tax system, GST simplifies taxation but also demands a thorough understanding of its principles, structure, and implementation. If you’re preparing for a GST-related interview, it’s important to not only understand the technicalities but also articulate your knowledge confidently.

This article is designed to help you navigate common GST interview questions by breaking them down into categories like general, technical, and scenario-based queries. Whether you’re a fresher or a seasoned professional, this guide will equip you with answers to demonstrate your expertise and stand out to employers. Let’s dive into what to expect and how to prepare for your next GST-related interview!

Top 50 GST Interview Questions With Answer:

General GST Interview Questions with Answer

1. What is GST, and why was it introduced?

Answer: GST (Goods and Services Tax) is a unified indirect tax introduced in India on July 1, 2017. It replaced multiple indirect taxes like VAT, excise, and service tax, streamlining the tax system and preventing the cascading effect of taxes. GST ensures a uniform tax structure across the country, simplifying compliance for businesses and promoting economic growth.

2. What are the types of GST in India?

Answer: GST in India is divided into four types:

• • CGST (Central GST): Collected by the central government on intra-state supplies.
  • SGST (State GST): Collected by state governments on intra-state supplies.
  • IGST (Integrated GST): Collected by the central government on inter-state supplies and imports.
  • UTGST (Union Territory GST): Collected in union territories like Andaman and Nicobar Islands.

3. What is the GST Council?

Answer: The GST Council is a constitutional body responsible for making recommendations on GST rates, exemptions, thresholds, and more. It includes the Union Finance Minister as the Chairperson, state finance ministers, and members from union territories.

4. What are the key components of GST?

Answer: The three main components are:

• • Taxable Event: Supply of goods or services.
  • Place of Supply: Determines whether the supply is intra-state or inter-state.
  • Time of Supply: Determines when the tax liability arises.

5. What is the threshold limit for GST registration?

Answer: The threshold limit varies based on the type of supply:

• • Goods: ₹40 lakh in most states (₹20 lakh in special category states).
  • Services: ₹20 lakh in most states (₹10 lakh in special category states).

6. Who needs to register for GST?

Answer: GST registration is mandatory for:

• • Businesses exceeding the threshold limit.
  • E-commerce operators.
  • Casual taxable persons.
  • Input Service Distributors (ISD).
  • Non-resident taxable persons.

7. What is the GSTIN?

Answer: GSTIN (Goods and Services Tax Identification Number) is a 15-digit unique number assigned to every registered business under GST. It consists of state code, PAN, and a unique entity number.

8. What is HSN and SAC in GST?

Answer:

• • HSN (Harmonized System of Nomenclature): Codes used for classifying goods.
  • SAC (Service Accounting Code): Codes used for classifying services.

9. What is the composition scheme under GST?

Answer: The composition scheme is a simplified tax scheme for small taxpayers. Businesses with turnover up to ₹1.5 crore can pay tax at a fixed rate (e.g., 1% for manufacturers) and file quarterly returns.

10. What is the reverse charge mechanism (RCM)?

Answer: Under RCM, the recipient, instead of the supplier, pays the GST. It applies in specific cases like imports, purchases from unregistered suppliers, or services like legal consultancy.

Technical GST Interview Questions with Answer

11. What is Input Tax Credit (ITC) in GST?

Answer: ITC allows taxpayers to claim credit for GST paid on purchases (input) to offset the GST payable on sales (output). It prevents double taxation and reduces the overall tax burden.

12. What are the conditions to claim ITC?

Answer: ITC can be claimed if:

• The taxpayer has a valid tax invoice.
• GST has been paid to the government.
• The goods/services are used for business purposes.
• The supplier has filed the GST return.

13. What is a tax invoice under GST?

Answer: A tax invoice is a document issued by a registered supplier for taxable supplies. It must include details like GSTIN, description of goods/services, HSN/SAC codes, and the amount of GST charged.

14. What are exempted goods and services in GST?

Answer: Exempted goods/services are not taxable under GST. Examples include unprocessed cereals, educational services, healthcare services, and public transportation.

15. What is GST compliance rating?

Answer: GST compliance rating is a score assigned to taxpayers based on their adherence to GST rules and timely filing of returns. A higher rating reflects better compliance.

16. What is the difference between GST payable and GST receivable?

Answer:

• GST Payable: Tax liability on sales.
• GST Receivable: Tax credit on purchases. The net tax liability is calculated by offsetting the receivable against the payable.

17. What is the e-way bill in GST?

Answer: An e-way bill is a document required for transporting goods worth over ₹50,000. It contains details like the consignor, consignee, and vehicle number, ensuring compliance during transit.

18. What is the GST audit?

Answer: A GST audit is a detailed examination of a taxpayer’s records to verify compliance with GST laws. It is mandatory for businesses with annual turnover exceeding ₹5 crore.

19. What is the penalty for late GST filing?

Answer: The penalty is ₹50 per day (₹25 each for CGST and SGST) for general returns and ₹20 per day for nil returns, subject to a maximum of ₹5,000.

20. What is the QRMP scheme?

Answer: The Quarterly Return Filing and Monthly Payment (QRMP) scheme allows taxpayers with turnover up to ₹5 crore to file GSTR-3B quarterly while making monthly tax payments.

Scenario-Based GST Interview Questions with Answer

21. What happens if a supplier doesn’t file their GST returns?

Answer: If a supplier fails to file GST returns, the recipient cannot claim ITC for those transactions. It also affects the supplier’s compliance rating.

22. How would you handle incorrect GST charged on an invoice?

Answer: I would notify the supplier to issue a credit note for the excess tax or a revised invoice with the correct tax amount. The supplier must update the changes in their returns.

23. What would you do if you notice a mismatch in GSTR-2B and purchase records?

Answer: I would reconcile the records by verifying invoices with the supplier. Any discrepancies should be corrected in the next return cycle.

24. How would you ensure compliance during a GST audit?

Answer: I would maintain organized records of all transactions, including invoices, e-way bills, and ITC claims. Timely responses to audit queries ensure smooth proceedings.

25. What would you do if your GST registration is canceled?

Answer: I would review the reasons for cancellation and, if appropriate, file an appeal with supporting documents to reinstate the registration.

Skill-Based GST Interview Questions with Answer

26. How do you ensure timely GST filing?

Answer: By using automated tools to track deadlines, setting reminders, and reconciling records regularly, I ensure returns are filed accurately and on time.

27. How do you stay updated on GST changes?

Answer: I follow updates from the GST Council, subscribe to tax-related publications, and attend webinars or training sessions.

28. How do you handle ITC reconciliation?

Answer: I compare purchase records with GSTR-2B and resolve mismatches with suppliers promptly to ensure accurate ITC claims.

29. What tools do you use for GST compliance?

Answer: I use software like Tally, ClearTax, or Zoho to automate GST filing, e-way bill generation, and ITC reconciliation.

30. How do you manage GST compliance for multiple states?

Answer: I maintain separate records for each state and ensure proper reporting of inter-state and intra-state transactions.

Behavioral GST Interview Questions with Answer

31. Describe a time when you resolved a GST filing issue.

Answer: In a previous role, I noticed discrepancies in ITC claims due to supplier errors. I coordinated with suppliers to rectify their filings and updated our returns, ensuring compliance.

32. How do you prioritize tasks during the GST filing season?

Answer: I focus on reconciling high-value transactions first and use a checklist to ensure all required data is ready before the deadline.

33. How do you handle stress during audits?

Answer: I stay organized, maintain clear communication with auditors, and provide accurate documentation promptly to reduce stress.

34. What motivates you to work in GST compliance?

Answer: The dynamic nature of GST laws and their impact on businesses motivates me to stay informed and contribute to smooth tax operations.

35. What’s your approach to training others on GST?

Answer: I use simplified examples, hands-on practice, and real-world scenarios to ensure team members understand GST concepts effectively.

Other GST Interview Questions with Answer

36. How does GST impact exports?

Answer:
GST has a significant impact on exports by promoting ease of doing business and ensuring exporters are not burdened by taxes:

• Zero-Rated Supplies: Exports are considered zero-rated under GST, meaning no tax is charged on export supplies.
• ITC on Inputs: Exporters can claim refunds of the Input Tax Credit (ITC) on inputs used in producing exported goods/services.
• Streamlined Process: Filing under GST (via LUT or payment of IGST) ensures smooth compliance.
  This framework eliminates the cascading effect of taxes, enhancing competitiveness in international markets.

37. What is the role of an Input Service Distributor (ISD)?

Answer:
An Input Service Distributor (ISD) is a registered entity that distributes Input Tax Credit (ITC) to its branches or units:

• Function: ISD consolidates the ITC of services received at the head office and allocates it to respective branches based on turnover.
• Relevance: This is particularly beneficial for companies with centralized operations but multiple GST registrations across states.
• Compliance: ISDs must issue tax invoices for ITC distribution and file GSTR-6 monthly.

38. Explain GSTR-1, GSTR-2A, and GSTR-3B.

Answer:

• GSTR-1: Filed monthly or quarterly by suppliers to report outward supplies (sales) and tax collected.
• GSTR-2A: Auto-generated for recipients, showing details of purchases and input tax credit as reported by suppliers in their GSTR-1.
• GSTR-3B: A summary return filed monthly to declare tax liability, pay GST, and claim ITC.
  Together, these forms ensure transparency, reconciliation, and compliance.

39. What are zero-rated supplies?

Answer:
Zero-rated supplies are transactions where the supply attracts 0% GST. Examples include:

• Exports: Goods/services exported outside India.
• Supplies to SEZs: Supplies made to Special Economic Zones.
  Taxpayers can claim a refund of ITC on zero-rated supplies, either through LUT or after paying IGST on exports.

40. How does GST affect e-commerce?

Answer:
GST streamlines taxation for e-commerce operators:

• Tax Collection at Source (TCS): Operators collect a percentage of tax (currently 1%) from sellers on their platform.
• Unified Tax Structure: GST eliminates cascading taxes and ensures consistent tax rates across states.
• Compliance Requirements: Sellers must register for GST, irrespective of turnover, and e-commerce operators must file GSTR-8.
  This makes the sector more organized but also increases compliance requirements for operators and sellers.

41. What is deemed export under GST?

Answer:
Deemed exports refer to supplies where goods do not leave the country but are treated as exports under GST. Examples include:

• Supply of goods to Export-Oriented Units (EOUs).
• Supplies under specified conditions (e.g., Advance Authorization Scheme).
  Tax is applicable on such transactions, but recipients can claim a refund of GST paid, ensuring no tax burden.

42. What is the difference between exempt and nil-rated supplies?

Answer:

• Exempt Supplies: Goods/services exempted from GST through a specific exemption notification. No tax is charged, and ITC on inputs is not available. Example: Healthcare services.
• Nil-Rated Supplies: Goods/services taxed at 0% GST. ITC on inputs is available. Example: Fresh fruits and vegetables.
  The primary difference lies in ITC availability and the manner of exemption.

43. What is the GST applicability on imports?

Answer:
GST is applicable on imports to ensure parity between domestic and imported goods/services:

• IGST: Charged on the value of imported goods/services, including customs duties.
• Tax Credit: Importers can claim ITC on IGST paid, reducing the cost impact.
  This makes imports subject to the same tax structure as domestic supplies, ensuring a level playing field.

44. Explain the process of GST refund.

Answer:
Refunds are applicable for excess tax paid, ITC on zero-rated supplies, or unutilized ITC. The process includes:

1. Filing Form RFD-01 on the GST portal.
2. Providing supporting documents like invoices and export-related documents.
3. Verifying the refund application by tax authorities.
4. Refund approval and disbursement, usually within 60 days.
   Efficient documentation is key to smooth processing.

45. What are mixed and composite supplies?

Answer:

• Mixed Supplies: Two or more independent goods/services sold together but taxed separately at the highest rate of any item in the bundle. Example: A gift pack containing chocolates and a toy.
• Composite Supplies: Two or more goods/services bundled naturally, taxed at the rate of the principal supply. Example: A hotel package with accommodation and meals, where the tax rate is based on accommodation.

46. What is the anti-profiteering clause in GST?

Answer:
The anti-profiteering clause ensures that businesses pass on the benefits of GST rate reductions or ITC to consumers by lowering prices.

• Objective: Prevent undue profit-making due to tax changes.
• Monitoring Body: The National Anti-Profiteering Authority (NAA) investigates complaints and ensures compliance.
• Penalties: Violations can lead to fines or cancellation of GST registration.

47. What is LUT (Letter of Undertaking) under GST?

Answer:
An LUT allows exporters to supply goods/services without paying IGST.

• Eligibility: Available to exporters with no history of tax evasion.
• Validity: LUT is valid for one financial year and must be renewed annually.
• Benefits: It simplifies compliance and reduces the financial burden on exporters by avoiding upfront tax payments.

48. What is the GST compensation cess?

Answer:
The GST compensation cess is levied on certain goods like luxury items and tobacco to compensate states for revenue loss due to GST implementation.

• Purpose: States are assured a 14% annual growth in tax revenue for five years post-GST rollout.
• Applicability: Applicable in addition to GST, and only on specified items.

49. What is a non-resident taxable person?

Answer:
A non-resident taxable person (NRTP) is someone supplying goods/services in India without a fixed business location.

• Registration: NRTPs must register for GST regardless of turnover.
• Compliance: They must file returns and pay GST in advance based on estimated tax liability.
• Validity: Registration is temporary, typically for 90 days, extendable upon request.

50. What are the challenges in GST implementation?

Answer:

• Complex Compliance: Multiple forms, reconciliations, and state-wise registrations increase the compliance burden.
• Technological Dependence: Reliance on the GST portal can cause issues during system outages or glitches.
• Interpretation Issues: Ambiguities in rules lead to disputes and varying interpretations.
• Refund Delays: Exporters often face delays in receiving refunds.
• Awareness and Training: Many small businesses struggle with understanding GST rules.
  Despite these challenges, continuous improvements by the GST Council aim to simplify processes and enhance the system’s efficiency.

Conclusion: GST Interview Questions

GST (Goods and Services Tax) has revolutionized the taxation system in India by creating a unified framework, simplifying compliance, and eliminating the cascading effect of taxes. It has streamlined the way businesses operate, fostering transparency and efficiency across sectors. However, understanding the intricacies of GST is crucial for effective compliance and leveraging its benefits. From registration and filing returns to claiming refunds and managing ITC, businesses must stay updated on GST rules and processes to remain compliant and competitive.

For professionals, GST interviews test not only technical knowledge but also the ability to apply that knowledge in practical scenarios. Preparing for questions on topics like GST rates, input tax credit, e-way bills, and compliance mechanisms is essential to showcase expertise. Beyond technical details, demonstrating an understanding of how GST impacts various business operations, such as exports, imports, and e-commerce, can set candidates apart.

While GST has faced challenges in its implementation, continuous improvements by the GST Council, enhanced digital infrastructure, and increased awareness are addressing these issues. Whether you’re a business owner, tax consultant, or aspiring professional, mastering GST concepts is a valuable skill in today’s dynamic economy. With the right preparation, you can confidently navigate GST complexities and contribute to seamless tax compliance.