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How to be compliant with GST for small businesses

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The Goods and Services Tax (GST) is a single tax that replaces the various taxes levied on goods and services. It aims to make India one market by subsuming multiple taxes such as VAT, service tax, entry tax, etc. GST is applicable to all goods and services except Alcohol for human consumption. As per the government mandate, whether you own a Xerox shop or are starting a textile company you need to check if you are GST compliant or not. See more. Here is how you check the requirement and become compliant:

  • Firstly, figure out if you are liable to compulsorily register under GST. This can be done by checking the turnover limit for compulsorily registering under GST. The turnover limit for an entity to compulsorily register is Rs 20 lakhs but there are many other criteria as well. If your business has crossed Rs 20 lakhs in annual gross revenue then you need to register under GST.
  • Secondly, get your business registered with the Government of India (GoI). You can either do this online through their website or through offline methods such as sending an email or calling them up on the toll-free number 1800-225-1800.
  • Once you have registered with GoI, they will provide you with a CIN (cin full form is Corporate Identification Number) and other details which you need to keep safe. You will also need it when paying taxes and filing returns later on.

Note: When it comes to taxes and filing returns, there are two types of taxpayers under GST: Normal Taxpayers and Special Taxpayers. Normal Taxpayers include those who sell goods or services at the retail level and Special Taxpayers include those who sell goods at the wholesale level or are manufacturers or traders of goods without selling them directly to consumers like restaurants et

Get GST Registered

After your company is registered, you need to register for GST. To do this, you need to fill in a simple form and submit it with some supporting documents. The process is very easy and straightforward. However, since this is a new tax regime in India, there are many rules and regulations that you should follow while filing your GST returns.

Once you have filed an application for the registration of your business with the registrar of companies (ROC), you can get a provisional GSTIN from the government by submitting a simple form. You will require this provisional GSTIN when you apply for registration under GST. Once approved, your business will be assigned a permanent GSTIN which would be used for submitting all future returns and paying taxes on goods and services sold by your company.

Raising Invoices Under GST

One of the first things that you need to do is ensure that all your invoices are raised under the new system. You can use an invoice generator tool to create invoices with ease. The online tools also help you generate CGST/IGST/SGST/UTGST details on each invoice automatically based on your GSTIN number.

Classifying Transactions using HSN/SAC code

Another important thing that you need to do is classify your transactions under different heads such as HSN or SAC codes (or both). While it’s not mandatory for every business owner to classify his transactions, it will help him keep track of them better and make his life easier when filing returns with the government.