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A definite GST guide for businesses, right from registration to returns of GST

A definite GST guide for businesses, right from registration to returns of GST

On general working days, I get this opportunity to interact with businesses, especially small and medium business owners about the problems they are trying to solve. It is interesting to know how entrepreneurs are coming up with good ideas but on the other hand, I have evidently noticed they lack some knowledge when it comes to their GST compliances. Small businesses contribute a good chunk to the GDP of India. Hence it is important that they get the right knowledge so they can grow efficiently.

So here is a comprehensive GST Guide for all SME business owners to understand the know-how and basics of GST compliances when it comes to dealing with GST for business.

What is GST in simple terms?

GST is an indirect tax applicable on the supply of Goods & Services. It came with the slogan “One Nation One Tax” as it has abolished almost all other indirect taxes viz., VAT, Service Tax, Excise, etc.

What is the applicability of GST in India?

Any Business can voluntarily opt for GST Registrations. However, businesses, where sales turnover is more than 20 Lacs OR 40 Lacs for sale of Goods OR Sale of Services respectively, must mandatorily register themselves under GST.

Let’s see businesses that are under the mandatory GST registration process by the GST Council. Here the rule doesn’t see the turnover of business – 

  • Entities those who supply goods/services through an e-commerce portal
  • Commission Agents
  • Businesses covered under Reverse Charge Mechanism

GST registration under GST composition scheme?

Under the GST, Composition Scheme allows for a tax to be imposed in an alternative manner. Small businesses that register under the GST composition scheme can pay GST at a specified rate of turnover each quarter and file quarterly tax returns. Small businesses that provide products and services to the final consumer with low turnover would be taxed through a composition levy. Moreover, in order to make compliance more accessible and cost-effective for small taxpayers, the composition scheme has been developed.

Any Business engaged in Trading/Manufacturing of Goods OR Supply of services whose Turnover is less than 1.5 Crores can register themselves under Composite Scheme. The Businesses engaged under the composition scheme needs to pay the tax at a concessional rate. The Rates are as per below:-

Category                                            Rate

Traders/Manufacturers                     1%

Restaurants (not serving alcohol)    5%

Service Providers                                6%

Businesses who are opting for Composite Scheme are not eligible to claim Input Tax Credit.

What is the input tax credit under GST?

The input tax credit is a mechanism for reducing the expense on inputs while maintaining the expense on output. When a taxable individual obtains a service or product supply, the GST charged is known as Input Tax.

Types of GST returns to be filed

All the Businesses need to file their GST returns either monthly/quarterly. Below are Returns that need to be filed:-

  1. GSTR 1/IFF – Business needs to disclose their sales under GSTR 1/IFF. Due Date for GSTR1 & IFF is the 11th and 13th of every month respectively
  2. GSTR 3B – Businesses need to declare their self-assessed GST liability under GSTR 3B. The due date for GSTR 3B is the 21st of every month.
  3. CMP 08 – Businesses that are registered under the composition scheme need to file their sales/liability summary under CMP 08. The due date to file the same is the 18th of the succeeding month of the previous quarter.
  4. GST-9 – Businesses whose Turnover is above 2 Crores need to file a GST Reconciliation statement under GSTR 9.

Gst audit turnover limit

Every Business whose Turnover is more than 5 Crores needs to get its books audited by a Chartered Accountant. Chartered Accountants need to upload the report in form GSTR 9C.

So this was a GST guide, in a nutshell, to help businesses to know their GST process. However, there are many complex situations in GST that may need a professional who provides GST services. Do consult your accountant for the same. If there are any more questions related to GST leave that in the comment box below. I will be happy to answer the same.



He is one of our strong members of the advisor panel of Whitespace consultancy. Pratik is a chartered accountant who has 10 years of experience in the field of Finance, Accounts & Tax. His expertise is in financial analysis, preparing business plans & Direct-Indirect taxation. He is of the belief that today's businesses need the right business consultants. One who not only follows and processes business compliances but also gives the right advice to strengthen the business. Pratik is also passionate about cricket and food.

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