Are you looking to break into the field of taxation and accounting? You may be a finance or accounting graduate preparing for a GST interview. We get it—interviews can be both exciting and nerve-wracking. Preparing for a GST interview means understanding the relevant rules and practicing common interview questions and answers.
This preparation can help you shine in the interview and boost your confidence. To help you out, we’ve put together a list of the top GST interview questions along with their answers.
Dive into GST Interview Questions and Answers
Here’s a wide list of important GST interview questions and answers for accountants and Tally operators. These questions can also benefit candidates working in accounting and finance.
Question 1. What are the different types of GST?
Answer: GST is categorized into four main types:
- Central GST (CGST): Applied on transactions within a single state, with the revenue going to the central government.
- State GST (SGST): Also applied to intra-state transactions, with the revenue going to the respective state government.
- Integrated GST (IGST): Applied on inter-state transactions and imports, with the revenue going to the central government.
- Union Territory GST (UTGST): Similar to SGST but applies in union territories without a state legislature.
Question 2. What is GST and why was it implemented?
Answer: GST, or Goods and Services Tax, is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It was implemented to replace multiple indirect taxes like VAT, service tax, and excise duty with a single tax, simplifying the tax structure and making it more transparent. GST aims to eliminate the cascading effect of taxes and promote a common national market.
Question 3. Can you elaborate on the GST compliance guidelines for firms in India and how the company ensures compliance?
To ensure GST compliance for our company in India, we follow a structured approach that includes registering for GST to obtain a unique GSTIN, consistently filing GST returns on time, making timely GST payments, and maintaining accurate records and paperwork. We’ve implemented several key practices to uphold compliance: regular staff training on GST rules and procedures, frequent reviews and audits to promptly address any compliance issues, and collaboration with external advisors when necessary. Additionally, we have robust systems and processes in place to track and manage GST-related transactions, input tax credits, and liabilities, ensuring that we stay compliant and avoid any potential issues.
Question 4. How do you file GST returns?
Answer: GST returns can be filed online through the GST portal. Different types of returns need to be filed depending on the nature of the business, such as GSTR-1 for sales, GSTR-3B for summary returns, and GSTR-9 for annual returns. Accurate and timely filing of returns is crucial to avoid penalties and ensure compliance.
Question 5. What is a GST invoice, and what are its key components?
Answer: A GST invoice is a document that a supplier issues to the recipient of goods or services. It must include the following key components:
- Supplier’s name, address, and GSTIN
- Recipient’s name, address, and GSTIN
- Invoice number and date
- Description of goods/services
- Quantity and unit
- Taxable value
- GST rate and amount
- Total amount payable
Question 6. What is the reverse charge mechanism in GST?
Answer: Under the reverse charge mechanism, the recipient of goods or services is liable to pay GST instead of the supplier. This mechanism applies in specific cases, such as when dealing with unregistered suppliers or certain notified supplies. It aims to bring unorganized sectors under the GST net and ensure tax compliance.
Question 7. What recent changes or amendments have been made in GST?
Answer: GST laws are periodically updated to address various issues and improve the system. Recent changes include:
- E-invoicing: Mandatory for businesses with an annual turnover exceeding ₹50 crores.
- QRMP Scheme: Quarterly Return filing and Monthly Payment of taxes scheme for small taxpayers with turnover up to ₹5 crores.
- Amendments in ITC rules: Restrictions on availing ITC based on GSTR-2B.
These changes aim to simplify compliance and reduce the tax burden on small taxpayers.
Question 8. How does GST impact e-commerce businesses?
Answer: E-commerce businesses are subject to specific GST provisions. They must register for GST regardless of their turnover and are required to collect Tax Collected at Source (TCS) at a rate of 1% on the net value of taxable supplies. This TCS must be reported in the GSTR-8 return. Additionally, they need to ensure compliance with GST invoicing and return filing requirements.
Question 9. What are the penalties for non-compliance with GST regulations?
Answer: Penalties for non-compliance with GST regulations can be severe. They include:
- Late filing: A late fee of ₹50 per day (₹20 for NIL returns) is charged for each day of delay.
- Non-payment or short payment of tax: A penalty of 10% of the tax amount due (minimum ₹10,000) can be imposed.
- Fraud: A penalty of 100% of the tax amount due can be levied if there is an intention to evade tax.
Question 10. What is Input Tax Credit (ITC)?
Answer: Input Tax Credit (ITC) is a mechanism that allows businesses to reduce the tax they have paid on inputs (purchases) from the tax they have to pay on outputs (sales). For example, if a business has paid ₹100 as GST on purchases and needs to pay ₹150 as GST on sales, it can claim an ITC of ₹100 and pay only the net amount of ₹50.
Question 11. What is the composition scheme under GST?
Answer: The composition scheme is a simplified tax scheme for small taxpayers with a turnover of up to ₹1.5 crores (₹75 lakhs for certain states). Under this scheme, taxpayers can pay GST at a fixed rate on their turnover instead of the normal GST rates. The rates are:
- 1% for manufacturers and traders.
- 5% for restaurants.
- 6% for service providers (up to a turnover of ₹50 lakhs). This scheme reduces the compliance burden by allowing taxpayers to file quarterly returns instead of monthly ones.
Question 12. What’s the Difference Between CGST and SGST in India?
In India, there are two main parts of GST: SGST (State GST) and CGST (Central GST). SGST is collected by the state, while CGST is collected by the central government. The GST collected is split between the state and central governments, and they are charged at the same rate.
Some common GST Interview Questions and Answers
Who needs to register for GST?
Answer: Any business whose aggregate turnover exceeds the threshold limit of ₹20 lakhs (₹10 lakhs for special category states) is required to register for GST. Additionally, certain businesses, such as those involved in inter-state trade, e-commerce operators, and those required to pay tax under the reverse charge mechanism, must register regardless of their turnover.
What are the Different GST Rates in India?
The GST (Goods and Services Tax) rates in India come in four categories: 5%, 12%, 18%, and 28%. The GST Council, which includes state and central finance ministers, decides these rates for different goods and services. Some items are either taxed at a lower rate or are exempt from GST altogether.
What is the significance of the HSN and SAC codes in GST?
Answer: HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) are codes used to classify goods and services under GST. The HSN code is used for goods, and the SAC code is used for services.
Tips for Cracking GST Interviews
Preparing for the interview
- Research thoroughly: Understand the latest GST regulations and revisions.
- Practice mock interviews: Get comfortable with common interview questions.
- Stay updated: Follow GST news and updates to stay informed.
Common traps to avoid
- Lack of preparation: Not knowing the basics can be detrimental.
- Ignoring recent changes: Being unaware of the latest amendments can reflect poorly.
- Overlooking details: Ensure you understand the nuances of GST compliance.
Conclusion
Mastering GST concepts is important for any professional looking to excel in a GST-related role. From understanding basic concepts to staying updated with recent changes, thorough preparation is key. Keep practicing, stay informed, and you’ll be well on your way to acing that interview.
FAQs
What is the threshold limit for GST registration?
The threshold limit varies by state and type of business but generally ranges from ₹20 lakhs to ₹40 lakhs.
Can I claim an Input Tax Credit on all purchases?
No, ITC can only be claimed on purchases used for business purposes and meeting specific conditions.
How often do I need to file GST returns?
The frequency of filing GST returns depends on the type of taxpayer, ranging from monthly to annually.
What happens if I miss the GST return filing deadline?
Missing the deadline can result in penalties and interest on the tax due.
Are there any exemptions under GST?
Yes, certain goods and services are exempt from GST, such as unprocessed food items and healthcare services.
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