Businesses engaged in the trade of goods and services, including transport, hospitality, food manufacturing/processing, and the sale of tools and equipment, are required to register for GST if their turnover exceeds INR 40 lakh for goods and INR 20 lakh for services. GST, a unified indirect tax system introduced by the Government of India under the Central Board of Indirect Taxes (CBIT), applies at every stage of the supply chain.

It's important to note that certain exemptions and relaxations are available based on the nature of trade and the capital utilized, particularly in specific regions such as the North Eastern states, where the minimum GST threshold is INR 20 lakh.

Once eligible, GST taxpayers must fulfill various GST compliances each financial year, failing which may result in legal consequences. Major GST compliances for businesses in India include return filing, record maintenance, and tax payment obligations.

After registering for GST, traders must adhere to a series of introductory compliances that must be consistently followed until the termination of GST registration. For intra-state supplies, traders are liable for CGST and SGST, while for inter-state supplies, IGST applies.

Every taxable supply requires a GST invoice to be issued. Composition dealers should issue a bill of supply for exempt supplies. A single invoice-cum-bill is sufficient for supplying taxable or exempt items to an unregistered person.

For goods, a GST Tax Invoice should be issued at the time of removal, while for services, it should be issued within 30 days of service provision.

It's imperative to mention the applicable GST on sold items in the GST invoice to avoid penalties. Except for those subject to Reverse Charge under GST, all suppliers must issue invoices and deposit the requisite GST in the government's account by the due date.

Input Tax Credit (ITC) is claimed based on the GST charged on the purchase of goods/services in the form of CGST and SGST/IGST at the applicable rate.

Composition Dealers are not required to charge any GST from buyers and are ineligible to claim ITC.

According to GST law, registered traders must maintain updated accounts/records as per prescribed guidelines. These include records such as production of goods, outward and inward supply of goods/services, stock register, ITC availed, and output tax payable and paid. Records should be maintained for at least 72 months per financial year from the due date of annual return filing in GSTR-9/GSTR-9A.

Once registered under the Goods and Services Tax (GST) system, traders are obligated to fulfill mandatory GST compliances each financial year, including:

• Filing periodic GST returns containing details of outward sales of goods/services, input tax credit (ITC), invoices, debit/credit notes, etc. This is followed by a summary return to ensure authenticity.

  Note: Traders must upload all necessary invoices along with their filings. GST provides online facilities for reviewing and amending these invoices by suppliers and purchasers based on inward/outward supply.

• Depending on the type of GST registration, filing timelines vary:

  • Normal GST Traders: monthly (both Return/Summary)
  • Composite Dealers (annual turnover up to INR 1.5 crore): quarterly
  • E-commerce Operators (liable to collect TCS): monthly
  • Input Service Distributors: monthly
  • Non-Resident Foreign Dealers: monthly
  • And others...

• Maintaining accounts and records strictly following GST rules, such as the purchase register, sales register, stock register, record of input tax credit, and output tax liability.

• Conducting GST-specific account audits by a registered practicing Chartered Accountant to provide audited financial statements to the GST office annually (mandatory for traders of goods/services with annual turnovers exceeding INR 2 crore).

• Claiming input tax credit by every GST-registered entity, except for composite dealers.

• Filing an annual return per financial year, mandatory for every GST-registered taxpayer.

GST, a single indirect tax option, replaces multiple state and central level indirect taxes, simplifying the taxation process.

For small traders, simplified and advantageous GST options include:

• Composite GST
• Voluntary GST

The higher GST registration threshold for normal taxpayers excludes small traders, providing them relief from GST compliances.

GST registration and filing processes are conducted online, allowing for updates, reviews, and rectifications anytime, anywhere.

With the removal of various previously valid state and central level indirect taxes, the number of GST compliances is reduced.

GST regulates the unorganized sector, including e-commerce operators.