Various Compulsory Compliances Under GST in India
GST (Goods and Services Tax) registration brings with it several compulsory compliances that businesses must adhere to for smooth operations and to avoid penalties. Failure to comply with these requirements can lead to fines, interest charges, or even cancellation of GST registration.
This article provides an overview of the key mandatory GST compliances in India.
1. GST Registration Compliance
Who Needs to Register?
Businesses with an annual turnover exceeding ₹40 lakh (₹20 lakh for service providers).
E-commerce sellers, inter-state suppliers, and businesses under the reverse charge mechanism (RCM).
Compulsory registration for certain businesses such as casual taxable persons and input service distributors (ISD).
Key Compliance:
Businesses must register for GST within 30 days of becoming liable.
Display the GST registration certificate at business premises.
2. Filing of GST Returns
Mandatory Returns for Regular Taxpayers
| Return Type | Description | Due Date |
|---|---|---|
| GSTR-1 | Monthly/quarterly details of outward supplies | 11th of next month (monthly) / 13th of next quarter (quarterly) |
| GSTR-3B | Monthly summary of sales, purchases, tax liability & ITC | 20th of next month |
| GSTR-9 | Annual return (summary of all transactions) | 31st December of next financial year |
Key Compliance:
Late filing leads to penalties of ₹50 per day (₹20 for NIL returns).
Interest at 18% per annum on delayed tax payments.
3. E-Way Bill Compliance
When is an E-Way Bill Required?
For the movement of goods valued above ₹50,000.
Required for inter-state and intra-state transportation.
Key Compliance:
Generate e-way bills on the GST portal (ewaybillgst.gov.in) before transporting goods.
Non-compliance can lead to penalties and goods being seized by authorities.
4. Input Tax Credit (ITC) Compliance
ITC Claiming Rules
ITC can only be claimed if supplier has filed GSTR-1 and paid taxes.
ITC claim is restricted to eligible purchases used for business.
Key Compliance:
Reconcile ITC claims with GSTR-2B to avoid mismatches.
Maintain purchase invoices and records for audit purposes.
5. Reverse Charge Mechanism (RCM) Compliance
When is RCM Applicable?
When purchasing goods/services from unregistered dealers.
On specific notified supplies like legal services, import of services.
Key Compliance:
Pay GST under RCM and claim ITC in the next return.
Maintain records of RCM transactions for compliance.
6. GST Audit & Record Maintenance
When is GST Audit Required?
Businesses with an annual turnover above ₹2 crore must get a GST audit.
Key Compliance:
Maintain records of invoices, ledgers, ITC claims, e-way bills for 6 years.
Ensure books of accounts match GST returns to avoid scrutiny.
7. Penalty & Late Fee Compliance
Common GST Penalties
| Non-Compliance | Penalty |
| Late filing of returns | ₹50 per day (₹20 for NIL returns) |
| Wrong ITC claim | 100% of the tax amount |
| Not generating an e-way bill | ₹10,000 or tax amount (whichever is higher) |
Key Compliance:
Avoid penalties by filing returns on time.
Regularly verify ITC claims to prevent errors.
Conclusion
GST compliance is crucial for avoiding penalties and ensuring smooth business operations. Businesses must register for GST, file returns on time, maintain records, and comply with ITC and e-way bill requirements. Staying updated with GST laws and using accounting software can help businesses meet these mandatory compliances efficiently.
For any questions related to GST compliance, feel free to ask in the comments!
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