Dos and Don'ts of GST
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Dos and Don'ts of GST
1. Do Register for GST If Eligible
If your turnover exceeds the prescribed threshold limit, you must register under GST. Voluntary registration is also an option for smaller businesses.
2. Do File GST Returns on Time
File your monthly or quarterly GST returns (GSTR-1, GSTR-3B, etc.) within the due date to avoid penalties and interest.
3. Do Maintain Proper Records
Keep detailed records of all business transactions, sales, purchases, invoices, and GST filings for at least 6 years.
4. Do Verify GSTIN of Suppliers and Customers
Ensure that you’re dealing with GST-registered businesses by verifying their GST Identification Number (GSTIN) on the GST portal.
5. Do Issue Correct GST Invoices
Make sure that your GST invoices include all mandatory details such as GSTIN, HSN/SAC codes, taxable value, GST rates, and other relevant information.
6. Do Reconcile Input Tax Credit (ITC)
Reconcile your ITC every month with the supplier’s GSTR-1 to ensure no discrepancies. Use GSTR-2A/2B for a detailed view of eligible credits.
7. Do Claim Eligible Input Tax Credit (ITC)
Take advantage of ITC for goods and services used in your business operations, subject to eligibility conditions.
8. Do Pay GST Liability on Time
Ensure timely payment of GST liabilities to avoid interest charges and penalties under section 50 of the CGST Act.
9. Do Keep an Eye on Changes in GST Rates and Rules
Stay updated on changes in GST rates, exemptions, and filing rules by regularly visiting the official GST portal or consulting professionals.
10. Do Consult a GST Expert or Accountant
If you’re unsure about GST compliance, seek guidance from a qualified tax professional to ensure proper adherence to GST laws.
1. Don’t Fail to Register for GST If Required
If your business turnover exceeds the threshold limit, failing to register for GST can lead to heavy penalties.
2. Don’t Delay GST Return Filings
Missing GST return deadlines will attract late fees, interest, and potential disallowance of Input Tax Credit (ITC).
3. Don’t Claim ITC Without Proper Documentation
Claiming ITC without the correct invoices or without receiving goods/services can lead to penalties or audit issues.
4. Don’t Issue Incorrect GST Invoices
Ensure your GST invoices are accurate. Mistakes can lead to penalties, the disallowance of ITC for your customers, and audit challenges.
5. Don’t Ignore GST on Exempt or Zero-Rated Goods
If your products or services fall under exempt or zero-rated categories, ensure you comply with all applicable provisions to avoid disputes.
6. Don’t Forget to Maintain Accurate Books of Accounts
Keep track of your sales, purchases, input/output tax, and other essential records as per GST rules. Inadequate records can lead to compliance issues.
7. Don’t Rely Solely on Your Vendor for GST Compliance
Even though suppliers may provide GST-compliant invoices, it is your responsibility to verify and ensure they are registered, and the transactions are reported correctly.
8. Don’t Delay Payment of GST Liabilities
Any delay in paying GST can result in penalties, interest, and potential legal action by the authorities.
9. Don’t Use Fake or Invalid GSTINs
Do not deal with unregistered suppliers or use fake GSTINs. This can lead to severe penalties and disallowance of ITC.
10. Don’t Mix Personal and Business Transactions
Keep your business and personal expenses separate for tax purposes. Mixing them could lead to disallowed ITC and other compliance issues.
Swami Associates is a trusted financial and taxation consultancy firm based in Koperkhairne, Navi Mumbai. Since our establishment in 2005, we have been delivering expert solutions in direct and indirect taxation, serving individuals, professionals, and corporate clients for over two decades.
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