Tutorial · GST · Understand GST

01 · What GST actually is

One tax on selling, in three pockets, that your customer can often take as credit — and why that chain is the whole game. About 7 min. As of August 2026.

This tutorial explains GST the way a new founder or accounts clerk needs it, and how the same work is done in Phyntara. It is teaching, not a legal opinion. Thresholds, due dates, and late fees change when the GST Council notifies them. Your CA files. Confirm the live rule on gst.gov.in before you act on a rupee.

GST is a tax on most things you sell in India — goods, services, or both. The full name is Goods and Services Tax. You add it on the bill when you sell. You often get it back as credit when you buy for the business. The government wants the two to match.

The kitchen picture

You run a small bakery. Flour from a mill comes with GST on the mill’s bill. You bake bread and sell it with GST on your bill. The GST you collected from customers, minus the GST you already paid on flour and rent (if eligible), is what you pay the government. That minus is called input tax credit — we will only say “tax credit” on the owner desk, and ITC when talking to a CA.

Example · One month, one bakery

You sold bread for ₹1,00,000 and charged 5% GST = ₹5,000. You bought flour and butter with ₹2,000 GST on those bills, and those bills are valid. You owe the government about ₹3,000, not ₹5,000. If the mill never filed your flour bill, you may still have paid the mill — but you may not get that ₹2,000 credit. That is why Phyntara holds a later payment to a vendor who has not filed.

Three names, one tax

On paper GST is split so the Centre and your state both get a share when the sale is inside one state, and a different split when the sale crosses a state border.

You see on the bill	When it appears	Who it is for
CGST + SGST (or UTGST)	Buyer and you are in the same state	Centre + that state, half each at the same rate
IGST	Buyer is in another state, or many exports / SEZ supplies	Centre first; it is later shared with states
Cess	A few goods (pan masala, some vehicles, coal, etc.)	An extra levy on top of GST

You do not pick CGST vs IGST as a guess. It follows place of supply — usually the customer’s state for services, and where the goods are delivered for goods. Phyntara derives interstate from your company’s state vs the customer’s state on the bill. Clerks do not tick a mystery checkbox.

What GST is not

It is not income tax. Profit can be zero and GST can still be due on sales.
It is not TDS (that is a cut from payments under the Income-tax Act).
It is not a licence to operate. You can be a private limited company with DPIIT recognition and still need a GSTIN — or still be below the threshold.
It is not optional once you are registered. Nil months still need returns.