Checklist to Make your Business GST Compliant Ready
August 30, 2022
The introduction of Goods and Services Tax (GST) has changed how business is conducted across the country. The law has been dynamic and more electronic-oriented, with more emphasis on data analysis. However, with the dynamism involved and the ever-changing law of GST, businesses are required to put in more effort to streamline their tax processes and keep track of all the changes happening in the tax laws.
Ignorance of Law is of no excuse. Every business ought to know the law of the land and has to abide by the same. In case of any violation, the business might have to incur a lot of expenses on interests and penalties.
Given the above background, every business must have a firm hand on GST and its implications if the company needs to fare better in the market. Compliance with GST laws is important for a business. However, many businesses are yet to adopt the right processes to become GST compliant.
In this article, we have discussed the necessary checkpoints a business has to follow for complying with GST Laws and grab the business opportunities GST will generate.
What is meant by being GST compliant?
The GST provisions has established standards for how various records, invoices, and reports are to be maintained and, subsequently, the manner of filing returns and paying tax. But, being a GST complaint means abiding by all the provisions of the law and rules framed thereunder. Any business may have to incur significant costs as a result of any noncompliance with the provisions of GST.
GST Compliance Checklist to Follow
1.GST Registration
Under Goods And Services Tax (GST), businesses whose aggregate annual turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh, as the case may be, must register as a normal taxable person. It is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offence under GST, and heavy penalties will apply.
Once you are clear that the business is liable to get registered under GST, the business has to make an application for registration under GST Laws in the Online GST portal (www.gst.gov.in). Although the process for registration is relatively straightforward, there are a few things to keep in mind to get the registration under GST. Hence a professional is required to guide through the nuances of registration.
2. Compliance with Tax Invoices, E-invoicing requirements
GST-registered businesses must adhere to invoicing regulations in order to distribute input tax credits. Every time a product or service is sold, businesses must generate an tax invoice as part of routine business operations. To be in conformity with compliance regulations, these invoices must contain the following mandatory elements:
- Date and invoice number
- Name of the recipient
- Shipping addresses of the recipient
- GSTIN of the supplier
- GSTIN of the recipient
- Place of supply
- Billing address
- HSN code for goods
- SAC for services
- Descriptions of items
- Discounts
- Tax rates
- Reverse charge status
- Signature
All items must be stated on the GST invoice for a firm to comply with invoicing compliance regulations.
In addition to the above, for businesses where the turnover exceeds the specified limit, the business should comply with the E-invoicing requirement where the details are to be uploaded to the e-invoicing portal of the government. Once the details are uploaded, a unique number is generated, which has to be printed on the Invoice being issued by the taxpayer.
3. Filling the Correct GST Monthly Forms
All registered businesses must file monthly, quarterly, and yearly returns, irrespective of the turnover. The type of economic activity largely determines the frequency of returns. GST returns must be electronically filed using the GST site or software. The following is a list of the GST return forms that regular taxpayers must submit:
GSTR 1
A statement which contains details of sales made during the period to be submitted to the government.
Frequency: Monthly
Due Date: 11th of the subsequent month
Concept of Invoice Matching
Every month for any business claiming Input Tax Credit against the purchases made, a reconciliation of the purchase register and the details appearing in GSTR 2A/2B are to be made in order to be eligible for claim of ITC.
In this regard, businesses need to adopt a mechanism for reconciling the data in a timely manner before claim of ITC.
Frequency: Monthly
Due Date: Before the filing of GSTR 3B for the said month
GSTR-3B
A simplified form called GSTR-3B is used to report all of a taxpayer’s GST liabilities during the period. In this return, a description of all outgoing supplies made, claimed input tax credits, assessed tax obligation, and paid taxes must be self-declared. All GST-registered taxpayers are required to submit it.
Frequency: Monthly
Due Date: 20th of subsequent month
GSTR-9
All GST-registered taxpayers are required to submit GSTR-9 returns once a year. Data on outgoing supplies made, incoming supplies received, and taxes due and paid for the prior year under various tax categories are included in the annual GST return. It is a combination of the data furnished in GSTR-1 and GSTR-3B returns that were submitted on a monthly or quarterly basis during the year. However, currently, this form is applicable only in case the business’s annual turnover is in excess of INR 2 crores.
Frequency: Annual
Due Date: 31st December
GSTR 9C
Every registered person whose aggregate turnover during a financial year exceeds five crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 of the CGST Act.
They shall furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in form GSTR-9C.
Frequency: Annual
Due Date: 31st December
File your GST Returns on Time
A key component of GST compliance is timely return filing. Even if there is no activity within the designated time, returns must still be filed and submitted electronically. The components cannot be modified after they are filed, but modifications may be made in subsequent filings. Not to add that doing this task without the aid of excellent GST service would be very difficult.
How to file GST Return?
The GST returns can be completed online or offline.
- Online Mode: Using their PAN number, monthly reports, and inbound and outgoing supply verification, one may submit their GST returns online on the GST portal at https://gst.gov.in.
- Using an Offline Utility Tool: By browsing and downloading the offline tool, one may upload the data in the tool to generate a JSON upload file to be uploaded to the GST online portal.
How Steadfast Business Consulting Can Help
Our expertise in Indirect taxation and handling the GST transition for different businesses puts us in a prime position to guarantee compliance with the GST law and deliver GST Services in India that is focused on our customers’ needs.
It is important to keep track of all the updates and analyze the impact of new changes in the law on businesses. Our experts have hands-on experience in performing impact analysis of various notifications. They can help formulate strategies and structure transactions in the best possible manner within the boundaries of the law.
Now that you know how to become GST compliant, it’s important to keep your business up to date on the most recent rules governing GST compliance and other GST rulings to analyze the impact on your businesses to avoid unnecessary interest and penalties.
We at Steadfast can help your businesses right from registering your business to planning transactions under GST.
Frequently Asked Questions
Is it important to provide and track GSTIN while dealing with vendors and customers?
It is important to track the GSTN while dealing with vendors, as you can claim ITC on any invoice issued by a vendor who had filed their GST Returns. Further, it is important to ensure the frequency of return filing before getting into business with the vendors as non-filing of GST Returns by the vendor shall result in non-availability of ITC to the business, thereby impacting the working capital of the business.
Will HSN Codes / SAC Codes have any impact on invoicing?
If your turnover is above INR 1.5 crores but below INR 5 crores, you must mention HSN Code on the Invoice to the 4-digit level; if it is INR 5 crores and above, you must mention the HSN Code on the Invoice to a 6-digit level.
HSN Code determines the tax rate on a particular product. Further, the businesses also have to disclose the HSN summary of outward supplies made in their monthly GSTR 1.