Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services across India. It has replaced several indirect taxes previously imposed by the central and state governments. GST aims to create a single, unified market and simplify the tax structure, ensuring a seamless flow of goods and services across state boundaries.

 

GST Rates

GST is divided into four main slabs:

• 5% - Essential goods and services, including items like household necessities and basic food products.

• 12% - Standard goods and services such as processed food items, computers, and electronics.

• 18% - Majority of goods and services, including smartphones, financial services, and telecom.

• 28% - Luxury items and sin goods such as high-end cars, tobacco, and aerated drinks.

There are also special rates for certain goods, such as a 0.25% rate on precious stones and a 3% rate on gold.

 

GST Compliance

Businesses registered under GST must adhere to various compliance requirements, including:

• Maintaining Proper Records: Businesses need to maintain detailed records of sales, purchases, and input tax credits.

• Invoicing: GST-compliant invoices must include the GSTIN, HSN/SAC codes, and correct tax amounts.

• Input Tax Credit (ITC): Businesses can claim ITC on the GST paid on purchases, reducing their tax liability.

• E-Way Bill: Required for the movement of goods exceeding INR 50,000 within or across states.

 

GST Penalties

​

Penalties under GST are imposed for various offenses:

• Late Filing: A late fee of INR 200 per day (INR 100 for CGST and INR 100 for SGST) is charged, subject to a maximum of INR 5,000.

• Incorrect Filing: If a taxpayer fails to file correctly or omits details, they can be penalized with up to 10% of the tax amount, subject to a minimum of INR 10,000.

• Tax Evasion: Penalty equal to 100% of the tax amount, along with potential imprisonment for severe cases.

 

Monthly and Annual Return Filings

​

• GSTR-1: Monthly/Quarterly return for outward supplies of goods or services, due on the 11th of the following month.

• GSTR-3B: Monthly return summarizing the total taxable value and tax liabilities, due on the 20th of the following month.

• GSTR-9: Annual return, summarizing the details furnished in the monthly/quarterly returns, due by 31st December of the next financial year.

• GSTR-9C: Reconciliation statement and certification, applicable to businesses with an annual turnover exceeding INR 5 crore.

 

GST Registration Limits

• For Goods: Businesses with an annual turnover exceeding INR 40 lakh (INR 20 lakh in special category states) are required to register under GST.

• For Services: The threshold limit is INR 20 lakh (INR 10 lakh in special category states).

 

GST Registration Process

1. Apply Online: Businesses can register through the GST portal by filling out the required forms and submitting necessary documents like PAN, Aadhaar, proof of business, etc.

2. Verification: The application is verified by the tax authorities.

3. GSTIN Allotment: Upon successful verification, a unique GSTIN (Goods and Services Tax Identification Number) is allotted.

 

Monthly and Annual Compliance Checklist

​

Monthly Compliance:

• File GSTR-1 by the 11th of every month.

• File GSTR-3B by the 20th of every month.

• Generate E-way bills for goods movement exceeding INR 50,000.

​

Annual Compliance:

• File GSTR-9 (Annual Return) by the 31st of December of the following financial year.

• File GSTR-9C (Reconciliation Statement) by the 31st of December if applicable.

• Annual accounting and auditing to ensure compliance.

 

Why Compliance Matters?

GST compliance is crucial for avoiding penalties, claiming input tax credits, and ensuring smooth business operations. Proper compliance can enhance the credibility of your business and help in building trust with stakeholders.