How to Make Your Business GST Compliant?
Here you will know Business GST Compliant like are you liable, Registration and much more.
Last updated
Here you will know Business GST Compliant like are you liable, Registration and much more.
Last updated
As we maintain records, raise invoices and report our purchases and sales, and then as we pay our taxes and file returns, the GST Council has laid down rules. Simply put, following these rules and regulations constitutes GST compliance. Failure to comply can result in huge costs for the business.
As per the GST registration guidelines, if your annual turnover is more than 20 lakhs in special category states and 40 lakhs in other states then you have to register under GST. If you fall under the following category, you need to take mandatory GST registration:
Persons taxable under the reverse charge basis
Interstate suppliers
Non-resident taxable persons
Casual Taxable persons
Input Service Distributors
Persons required to deduct TDS under GST
Persons required to deduct TCS under GST
Every E-commerce operator provides a platform for suppliers to make supply through it.
Persons making a sale on behalf of someone else whether as an Agent or Principal.
Online Service Providers providing service from outside India to a non-registered person in India.
Suppliers who supply goods through E-commerce operators are liable to collect tax at source.
When you are clear whether you are liable to register or not, you will fall under one of the following 2 cases and if you have previously obtained registration in the indirect tax regime.
Liable to register under GST -
Need to enroll yourself by using GST and validating your mobile number, email id.
Once enrolled, a Provisional Registration Certificate will be allotted in Form GST REG-25. Keep in mind that even if you have registered multiple times on the same PAN, in any case, you will still get a registration certificate under GST. And if you are supplying services in multiple states then it is necessary to register separately for all the states.
Not liable to register under GST - Even if you were registered earlier, now you are not liable to register under GST, as now your business is below the limit. In this case, you will have the option to cancel the provisional registration issued by submitting Form GST REG-28 within 30 days.
GST-compliant invoices must be issued by a business registered in GST. The GST draft rules specify that certain fields specified by the rules should be provided at the time of issuance of the invoice.
16 fields must be included; Suppliers can choose a format of the invoice and affix their logo, as long as it includes relevant fields.
The supplier has to update the details of the invoices issued by him on the GSTIN portal. Invoices issued should be indexed electronically through the common portal.
Information about the buyer and seller of the invoice is entered on the GST portal. Through this information, GSTN auto-populates the purchases made by a registrant.
The very first important step is to be GST compliant by providing the invoice details. It links the buyer's profile with the purchase itself and allows him to claim the benefit of taxes paid on the purchase against his total tax expense.
It is also very important for you to know about HSN/SAC codes - mainly for 2 reasons:
HSN/SAC code affects your GST invoice – If your business is above Rs.1.5 Crore but less than Rs.5 Crore, then you should use 2 digit code. And if your business is 5 crore and above then you should use 4 digit code. And if your turnover is less than 1.5 Crore then you don't need to mention the HSN code in their challan.
There is a need to maintain a high level of consistency as far as the names of the goods/services are concerned. Different businesses will use different names, and the government has a standard name for all goods/services specified. For seamless trading and compliance, it is better to use a uniform code which is why knowing your HSN/SAC code becomes so important.
You have to classify all transactions under GST as "goods" or "services" using HSN/SAC code mapping. Some of these classifications have been replaced by the old Value Added Tax (VAT) laws. For example, restaurants classified as "goods" under state VAT laws are now classified as "services" under GST.
GST has adopted the Integrated GST (IGST) model, which categorizes transactions into 2 categories: interstate transactions and intrastate transactions. You should keep in mind the frequent changes in tax rates and exemptions and reclassify items and redefine tax rates as needed.
Filing of returns on time and with correct information is a very important aspect of compliance under GST and good information ensures GST rating. And all returns must be filed online. If you file the return then you cannot modify the details after that, but later changes can be made in the filing.
A business has to file a lot of returns and the time limit for doing so is strict. It is very difficult to do all this manually without errors. Hence, it is relevant whether businesses small or large use compliance software that makes the process of filing returns easy for them. Compliance software can also help with easy reconciliation and alert you to potential mismatches, which can be quickly corrected later. It thus becomes essential to select the right GST compliance software.
Disclaimer: This article is intended for general consumption only. The information in the article was accurate at the time of publication, but it is subject to change due to changes in government rules and regulations. The contents of the blog may not be copied unless prior permission is obtained.
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