GST stands for Goods and Services Tax, which is a value-added tax applied to most goods and services at each stage of production and sale. It is implemented in many countries around the world to streamline taxation and encourage compliance.

The GST is generally charged at point of sale and is proportionate to the value of the goods or services provided. For instance, if a product costs $1000 and the applicable GST rate is 10%, the final price for the consumer would be $1100. Businesses collect GST from consumers and remit it to the government.

Many companies account for GST during their month-end or year-end financial closings, where they reconcile their collections against purchases to compute the net GST payable or refundable. Understanding GST is crucial for accurate balance sheet preparations.