How to Make your Business GST Compliant

  1. 1. Introduction
  2. 2. GST Compliance Checklist
    1. Step 1: Find out whether you are liable to compulsorily register under GST
    2. Step 2: Get GST Registered
      1. Case 1: Liable to register under GST
      2. Case 2: Not liable to register under GST
    3. Step 3: Issue and Receive GST compliant Invoices
  3. 3. Identify your HSN Codes / SAC Codes & Tax Rates
  4. 4. Provide and Track GSTIN while dealing with Vendors and Customers
    1. Step 4: File your GST Returns on Time
    2. Step 5: Select the right GST Compliance software
  5. 5. Compliance Rating under GST
  6. 6. What is GST Compliance?

1. Introduction

The much awaited, much debated GST became a reality a few months back. From the midnight of 30th June leading into 1st of July, most businesses across India were able to seamlessly continue their business, since they had taken the necessary steps to welcome the GST era, and adopt GST compliance.

2. GST Compliance Checklist

Step 1: Find out whether you are liable to compulsorily register under GST

As per the GST registration guidelines, you will need to take mandatory GST registration, if you fall under any of the following category of suppliers:

Taxable person with turnover exceeding INR 20 lakhs (INR 10 lakhs in Special Category States)

Taxable person carrying on interstate supplies

Casual and non-resident taxable persons

Businesses liable to pay tax under reverse charge

Agents supplying on behalf of a taxable person

Input service distributor

All e-commerce operators

Person supplying online information and database access or retrieval services from outside India to an unregistered person in India

Persons responsible to deduct TDS

Note – Earlier, all sellers on e-commerce, irrespective of turnover were liable to take GST registration. However, as per the latest ruling, suppliers with turnover below INR 20 lakhs will not be required to register themselves under the GST for selling goods or services through e-commerce portal. Also, the government has deferred the implementation of TDS and TCS provisions for two categories of deductors - government, including local authorities, and e-commerce companies and their suppliers.

Step 2: Get GST Registered

Once you are clear about whether you are liable to register or not, you will fall under one of the following 2 cases:

Case 1: Liable to register under GST

In this case, you will need to carry forward your registration under the current taxation laws, into the GST era. You can do that by taking the following steps -

  • Access the common GST portal ( ) and enrol by validating your e-mail ID and mobile number. It is an extremely user friendly portal, which will enable you to seamlessly take online GST migration registration.
  • Upon enrolment for GST, you will be allotted a provisional certificate of registration in Form GST REG-25 . Please note, that even If you have obtained multiple registrations on the basis of a single PAN under the existing taxation laws, you will still be granted only one provisional registration under GST. In the case of centralized registration under Service Tax, you will be granted with a single provisional registration in the state or union territory in which you were registered earlier. However, if you are into the business of supplying services in multiple states, you will need to take separate registration for all such states, where you will be providing your services.
  • Within 3 months, you will be required to submit Form GST REG-24 in the GST Portal along with information and documents as prescribed. If the information provided is complete and satisfactory, final registration certificate will be issued to you in Form GST REG-06 .

Case 2: Not liable to register under GST

In this case, even though you were previously registered, you are no longer liable to register under GST, since your turnover is below the threshold limit. In such a circumstance, you will have an option to cancel the provisional registration issued by submitting the Form GST REG-28, within a period of 30 days i.e. by July 30th, 2017.

In either case, the GST Enrolment / Registration process has re-opened at the GST Portal ( from 25th June 2017 and will remain open till 30th September 2017, to give another opportunity to remaining taxpayers, who could not migrate to GST so far. Also, if you have enrolled prior to 1st July, but were not able to digitally sign the enrolment form, you can now utilise this window to complete the process of enrolment.

Step 3: Issue and Receive GST compliant Invoices

This comprises two major steps – knowing the HSN/SAC codes of your supplies and their relevant tax rates, and providing and tracking GSTIN while dealing with your vendors and customers.

3. Identify your HSN Codes / SAC Codes & Tax Rates

Since the 18th of May, 2017, the GST Council has met 4 times to declare the rates of various goods and services, which included amendments which happened along the way. At the same time, the HSN codes (for goods) and SAC codes (for services) have also been declared. It is super critical for you, to not only to be aware of the tax rates of the supplies you make, but also the HSN / SAC codes – primarily for 2 reasons.

One, it will have an impact on your GST invoicing – if your turnover is above INR 1.5 crores but below INR 5 crores you need to use 2-digit code and if your turnover is INR 5 crores and above, you need to use 4-digit code. If your turnover is below INR 1.5 crores, you are not required to mention HSN Code in their invoices at all.

Two, there needs to be a high level of consistency to be maintained as far as the names of goods / services are concerned. Different businesses will be using different names, and the government has a standard name for all goods / services which are specified. For seamless business and compliance, it is better that a uniform code is used across, which is why knowing your HSN / SAC code becomes so important.

The second and important task is now, to know the GST rates for your products. Click here to access the final GST tax rates booklet for goods and here for the final GST tax rates booklet for services.

4. Provide and Track GSTIN while dealing with Vendors and Customers

Probably one the most important steps for your business in the GST era is to ensure that you are able to take the right and timely input tax credit, and similarly, your customer is availing his input credit on your supply. For that to happen, you need to ensure that you have provided your GSTIN to your vendor, so that the same is recorded in your purchase ‘tax invoice’. Likewise, ensure that you are capturing the GSTIN of your customer on the sales ‘tax invoice’, so that your customer is able to claim input credit. This will allow you to continue your business in a seamless manner, and also allow you to manage your vendors and customers effectively.

Step 4: File your GST Returns on Time

Filing timely returns will be an important aspect of GST compliance. Returns need to be filed even when there is no business activity for the specified return period, and all returns must be filed online. Once filed, the details cannot be revised, but changes can be made in subsequent filings.

For a normal business, three month returns and one annual return are mandatory (GSTR-1, GSTR-2, GSTR-3, and GSTR-9). This totals up to 37 returns in a single year. The number increases if you operate in more than one state, as you will have to repeat this same process for all the states your business is registered in. Needless to say, achieving this task without the help of the right technology is going to be next to impossible.

Step 5: Select the right GST Compliance software

As discussed, the number of returns a business must file and the timelines for doing so are strict. It is impossible to do all of this manually, without making errors. Hence, it is pertinent that businesses small and large use a compliance software that can ease the return filing process for them. Compliance software can also help with easy reconciliation and alert you to possible mismatches, which can then be rectified immediately. Selecting the right GST compliance software thus becomes essential.

5. Compliance Rating under GST

Compliance is critical for any business in the GST. To keep this under check, the GST Council has put in place a ratings mechanism that would be based on criteria like timely returns, timely payment of taxes, and fewer reconciliations made. These would be conducted irrespective of the size or nature of the business, and will be available publicly. This means that before someone does business with you, they are likely to review how you fare on these ratings and take decisions accordingly.

By following the 6 steps prescribed above in the GST compliance checklist, a business will not only be able to remain compliant for its own sake, but also maintain a good GST Compliance India rating under GST, which will make it easier for it to get and conduct business with other entities in the ecosystem.

6. What is GST Compliance?

The GST Council has rules laid down for the way we maintain records, how we raise invoices and how we report our purchases and sales, and ultimately, the way we pay our taxes and file returns. In simple terms, adherence to these rules and regulations is what constitutes GST compliance. Not being compliant, can be a heavy cost for a business.

However, there are businesses, who are yet to adapt the right processes in order to become GST compliant. Here is a quick GST compliance checklist, comprising 6 steps you can take to make your business GST ready.


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