21 GST Interview Questions You Must Know Before Your Next Interview - Part 2

1. Who needs to register under GST?
   Answer: GST registration depends on factors such as aggregate turnover, the nature of the business, the type of supply and specific legal requirements. Some businesses may need registration even if their turnover is below the usual threshold, subject to applicable exemptions and exceptions.
   Example: A business crossing the applicable registration threshold may become liable to register under GST.

2. What is GSTR-2B?
   Answer: GSTR-2B is an auto-generated statement that provides information about Input Tax Credit (ITC) based on details reported by suppliers while they file their GSTR1.
   It helps businesses check the ITC that may be available before claiming it in their GST return.

3. What is the difference between GSTR-2A and GSTR-2B?
   Answer: Both statements help businesses check purchase-related information reported under GST, but they work differently.
   a) GSTR-2A: A dynamic statement that can change as supplier-reported details are updated.
   b) GSTR-2B: A static, period-specific statement that provides ITC-related information for a particular tax period.

4. What is GST reconciliation?
   Answer: GST reconciliation means comparing information from different records to identify differences and ensure that the figures match. Reconciliation helps identify missing invoices, incorrect tax amounts and other discrepancies before returns are finalised.
   For example, a business may compare its purchase register with GSTR-2B to check whether supplier invoices appear correctly and whether the related ITC can be claimed.

5. What is the QRMP scheme under GST?
   Answer: QRMP stands for Quarterly Return Monthly Payment. It allows eligible taxpayers with an aggregate annual turnover of up to ₹5 crore to file GSTR-1 and GSTR-3B quarterly while paying tax monthly. They can also use the Invoice Furnishing Facility (IFF) to report specified B2B invoices for the first two months of a quarter.
   To understand the QRMP scheme in detail, read our guide on What is QRMP Scheme Under GST? and learn about its eligibility, benefits and return filing requirements.

6. What is the difference between B2B and B2C transactions?
   Answer: B2B stands for Business-to-Business, while B2C stands for Business-to-Consumer.
   a) B2B: A transaction between businesses which are registered under GST, such as a wholesaler selling goods to a retailer.
   b) B2C: A transaction in which a business sells to an end consumer, such as a shop selling a product to an individual.

7. What is the time of supply under GST?
   Answer: Time of supply determines when GST becomes payable on a transaction. The applicable rules vary depending on whether the supply involves goods or services.
   Example: A business cannot always decide the tax period based only on when it receives payment. It must apply the relevant time-of-supply rules.

8. What is the value of supply under GST?
   Answer: Value of supply is the taxable value on which GST is calculated. Generally, it is the transaction price, subject to applicable valuation rules.
   Example: If the taxable value of goods is ₹10,000 and the applicable GST rate is 18%, GST would be ₹1,800, assuming no other adjustments apply.

9. What is a GST credit note?
   Answer:  A credit note is issued by a supplier in situations such as when the original taxable value or GST charged is higher than required, or when goods are returned or supplies are deficient, subject to applicable GST provisions. .
   Example: If a customer returns goods worth ₹2,000 from a purchase of ₹10,000, the supplier may issue a credit note, subject to applicable GST conditions.

10. What is a GST debit note?
    Answer: A debit note is issued by a supplier when the taxable value or GST charged in the original invoice is lower than the amount applicable to the supply.
    Example: If a supplier charges GST on ₹8,000 instead of the correct taxable value of ₹10,000, a debit note may be issued for the difference.

11. What is a Nil GST return?
    Answer: A Nil GST return is filed when there are no reportable transactions or other amounts to declare for the relevant return period.
    For example, if a business has made no sales during a tax period, it may need to file a Nil return if the filing requirement applies.

12. What is the difference between sales return and purchase return under GST?
    Answer: A sales return occurs when a customer returns goods to the seller, while a purchase return occurs when a buyer returns goods to the supplier.
    Example: If a retailer returns damaged goods to a wholesaler, it is a purchase return for the retailer and a sales return for the wholesaler. The supplier may issue a credit note, subject to applicable GST rules.

13. What is the difference between a regular taxpayer and a composition taxpayer?
    Answer: A regular taxpayer generally charges GST on taxable outward supplies, claims eligible ITC and files the applicable returns. A composition taxpayer pays tax under the composition scheme, cannot claim ITC and follows the compliance requirements applicable to that scheme.
    The choice depends on eligibility, business needs and the applicable GST rules.

14. What is the Reverse Charge Mechanism (RCM)?
    Answer: Under the Reverse Charge Mechanism, the recipient of specified goods or services is responsible for paying GST instead of the supplier, as provided under GST law.
    For example, if a business receives a service covered by reverse charge, it may have to calculate and pay the applicable GST itself.

15. What is the difference between forward charge and reverse charge?
    Answer: The difference is who is responsible for paying the GST.
    a) Forward charge: The supplier generally charges GST on the invoice and pays it to the government.
    b) Reverse charge: The recipient is responsible for paying GST on specified transactions covered by the relevant provisions.

16. What is the difference between a tax invoice and a bill of supply?
    Answer: A tax invoice is generally issued for taxable supplies and includes applicable GST details. A bill of supply is issued by composition taxpayers and registered suppliers making exempt supplies, as applicable. GST is not charged separately on a bill of supply.

17. What is an e-way bill?
    Answer: An e-way bill is an electronic document required for the movement of goods in specified cases under GST. It contains details of the goods, supplier, recipient and transportation.
    Example: An e-way bill is generally required when the consignment value exceeds ₹50,000, subject to applicable rules, exceptions and specific movement-related requirements.

18. What is e-invoicing under GST?
    Answer: E-invoicing is a system under which specified invoices are authenticated electronically through an Invoice Registration Portal (IRP). The system generates an Invoice Reference Number (IRN) and a signed QR code for applicable invoices.

19. What is the difference between the Electronic Cash Ledger and the Electronic Credit Ledger?
    Answer: Both ledgers are maintained on the GST portal, but they serve different purposes.
    a) Electronic Cash Ledger: Records money deposited by the taxpayer for GST payments and other permitted liabilities.
    b) Electronic Credit Ledger: Records eligible ITC available for use against permitted tax liabilities.
    The credit ledger cannot be used for every type of liability. For example, certain interest, penalties and other amounts may need to be paid through the cash ledger.

20. What are the basic conditions for claiming ITC?
    Answer: A business must satisfy the applicable legal conditions to claim ITC. These generally include having a valid tax invoice or prescribed document, receiving the goods or services, meeting supplier-reporting and return-related conditions, filing the required return and ensuring the credit is not blocked under the law.
    Example: A business should not claim ITC merely because it has received an invoice. It must check whether the credit is eligible and whether the required conditions have been met.

21. What is the difference between GSTR-1 and GSTR-3B?
    Answer: Both are important GST returns, but they serve different purposes.
    a) GSTR-1: Reports details of outward supplies, such as sales, debit notes and credit notes.
    b) GSTR-3B: A summary return used to declare tax liability, eligible Input Tax Credit (ITC) and the tax payable for the period.
    Example: A business reports its sales invoice details in GSTR-1 and declares its outward tax liability and eligible ITC in GSTR-3B.

A bit of preparation can go a long way in an interview! These GST concepts will help you to answer questions with more clarity and to understand how they apply to the day-to-day accounting tasks. Use these 21 questions as a quick revision guide, go back to the concepts you find challenging and try explaining each answer in your own words. And this is not end! Keep an eye out for more important GST questions to help you strengthen your knowledge and prepare for upcoming interviews.