GST Compliance

What is GST Compliance?

The introduction of the GST tax system has ushered in major tax reform in the nation. The new system brings together many state and central taxes into one common, fungible tax. This much-needed reform introduced greater transparency and eased administrative paperwork into the tax collection framework. Since its introduction, the new system has been good news for most businesses — especially for small and medium-sized enterprises that rely on technology to take care of tasks like registration and filing tax returns online.

The new GST regime has introduced compliance guidelines that mandate businesses to remain compliant. All businesses are required to adopt the GST compliance rules set by the government. Although these rules are updated from time to time (based on the requirements set by the govt), these compliance rules can be clubbed into three categories:

Registration compliance
Tax Invoice compliance
Return filing compliance

Additionally, other compliances differ based on the nature of the business.

GST Registration Compliance

The registration of GST is the first step forward in compliance. The registration can be done online on the website – www.gst.gov.in. The process is relatively straightforward; however, there are a few things to keep in mind in order to remain compliant. GST registration must be done based on a businesses’ annual turnover.

Applicable to businesses that deal with the supply of goods and with a turnover exceeding Rs. 40 Lakhs in the previous FY.
Applicable to businesses that deal with the supply of services and with a turnover exceeding Rs. 20 Lakhs in the previous FY.

Businesses that fall under the annual turnover bracket are mandated to register for GST and are liable to other GST compliance requirements. The CBIC (Central Board of Indirect Taxes and Customs) has issued strict penalties for non-adherence to GST registration. The penalty for delay would lead to a fine of Rs. 100 per day. A further delay in GST registration would lead to a fine of Rs. 200. These penalties are as per section 122 of the CGST act non-compliance rules.