GST Demystified: Key Compliance Tips for Small Businesses

1. Registration Requirements

Registration is mandatory under Section 22 of the GST Act if:

• Annual turnover exceeds ₹20 lakh (₹10 lakh for special category states).

• You are involved in inter-state supply, e-commerce, or taxable services.

Apply for GST registration via the GST portal and obtain your GSTIN.

2. Maintain Accurate Invoices

GST-compliant invoices must include:

• Name, address, and GSTIN of the supplier and recipient.

• Description of goods/services with HSN or SAC codes.

• Invoice date, number, and place of supply.

Errors in invoicing can lead to ITC claims rejection under Section 16.

3. File GST Returns Timely

Small businesses must adhere to a strict return filing schedule:

• GSTR-1: Monthly or quarterly declaration of outward supplies.

• GSTR-3B: Summary of sales, ITC, and tax payable.

Late filings attract penalties under Section 47:

• ₹20/day for nil returns.

• ₹50/day for other cases.

4. Manage Input Tax Credit (ITC)

Under Section 16, ITC can be claimed only on business-related expenses. Ensure:

• Suppliers have filed their GSTR-1 returns.

• Proper documentation is available for audits.

GST compliance isn’t just a legal necessity; it streamlines business finances and builds credibility.