GST compliance

5paisa Research Team Date: 30 Jun, 2023 03:24 PM IST


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GST Compliance standards for the new GST system instill a sense of discipline among Indian citizens. It requires all businesses to follow the different GST requirements and pay taxes on time.
Let us learn about it as we read below for more information. 

What Is GST Compliance?

Compliance guidelines regarding the new system of GST set forth a sense of discipline among the citizens of India. It mandates each business to comply with the various GST guidelines and pay taxes without missing out. That is why each business must compulsorily adopt the GST compliance protocols that the government had set forth for them to follow. 

GST rules are generally updated regularly. But there are three primary categories to focus on- 

●    Tax Invoice Compliance 
●    Return Filing Compliance 
●    Registration Compliance 

There are many other compliances to adhere to. But each of them may differ as per the set business there is. 

With a good GST compliance rate, any business can easily gain the trust of the government. This can have long-term effects. When the business gains the government’s trust, it becomes easier to gain the trust of large-scale customers too. 

GST Registration Compliance

Once you’ve understood GST compliance meaning, it is time to take a peek into GST registration compliance. In the compliance department, the first step is to make a GST registration. One can do this by visiting the government's online site too. This is easier and much faster compared to offline registration, which can be exhausting and time-consuming at the same time.

Although the process of online GST registration compliance is very simple and straightforward, there are a few things you must keep track of. The first thing to note is that your business’s yearly turnover plays an important role when considering registering for GST compliance.
Any business that has a substantial annual turnover must apply for GST. As such, it must comply with any GST guidelines that are required for them to adhere to. But those who do not cater to these guidelines or fail to do so must serve a hefty penalty. This has been mandated by the Central Board Of Indirect Taxes and Customs. If anyone delays the penalty, a fine of Rs. 100 would be levied on them. Any further delay in terms of GST registration will require a fine payment of Rs. 200. 

Why Do People Need To Stay GST Compliant And Receive A High Rating?

Compliance under GST is important for all businesses with an annual turnover. But what is important for you to know is that for any buyer who is hoping to make an input claim on their credit for the goods they bought, it becomes necessary for them to state each transaction wherein they have paid the GST to vendors. 

Let’s take an example wherein Ram purchases a certain product from Shyam and uploads each transaction of the sales on the GSTR-1. This means any and every transaction in the buyer’s GSTR-2 will get auto-populated by the former. This is the same one that the vendor had filed. This is when Ram can implement the use of GSTR-2 for input tax credit claims. 

But if Shyam wasn’t paying the dues, the scenario would be different. According to GST compliance services, the tax return he made would be deemed invalid for consideration. Ultimately, Ram would fail to validate GSTR-2, which means his tax claim would fail too. 

Benefits Of The GST Compliance Rating

As a business owner, it only makes sense to ask yourself about the benefits of getting compliant with the tax department. As discussed above, the simple answer to this is trust. With a good compliance score, the business is more likely to earn the government’s trust. As a result of this, your business is more likely to gain the trust of diverse customers.
Initially, it may seem like a minute start, but once you start to measure the consequences of it, you will realize that collectively working on the GST tax can help massively. If you are an individual owner of your company, you can follow the tax protocols and comply with the entire ecosystem of GST. 
But make sure that you also know how to maintain GST compliance. It can be done using three simple steps that are- 

●    Filing your GSTR 1 and 2 at the appropriate time.
●    Submitting the yearly return 
●    Paying off the due amounts for taxes

Tax Invoice Compliance

Once your business has been registered, it is important to follow invoicing compliance too. This will help your business to pass the input tax credit. So, for this, certain compliance rules must be adhered to by following factors given below- 

●    Client name
●    Place of supply
●    Invoice date and number
●    Billing and shipping address
●    Taxpayer’s and client’s GSTIN
●    Details or descriptions of items
●    Amount or the price of each tax
●    Supplier’s signature
●    HSN Code
●    Discounts and taxable value
●    Determine whether or not GST is payable on the basis of reverse charge.

These GST compliance services are important for everyone to follow after the GST registration is successfully completed. 


GST Return Compliance

Amidst other GST compliance services, one must understand what GST return compliance is all about. Every business that is GST-related must file returns on a yearly, monthly, or quarterly basis. The return frequency is highly dependent on the form of business activity that is being carried out. Anyone can fill these GST returns online with the help of a potential accountant. 

Here’s all about the GST compliance requirements- 

GSTR-1 is a form of return wherein the information on sales is filed with the government. Once you have filed this return, you need not pay any form of tax. 

GSTR-3B is a simple form of return wherein the GST liabilities are declared for a certain tax duration. One needs to declare it on their own every month for diverse purposes, including claiming the input tax credit, the paid taxes, each outward supply that was made, and Ascertained tax liability. 

GSTR-9 Return is an annual form of tax that every taxpayer must file under the GST system. This one is for businesses with an annual turnover of Rs. 2 Crores and includes diverse financial information. 


Now you have sufficient details about GST compliance and its various kinds. We have talked about almost all types of GST compliance services here for your reference as well. This should help you comprehend the system of GST in a much more comprehensive order. 

Always make sure that your GST system is up-to-date and that you have to serve minimal to no penalties at all. If you want to make a GST registration today, make sure you head to the government’s online portal. You will find ample information for the same there so you can fill in your details accurately and get registered right away. 

You may also find many GST compliance jobs there on the portal itself if there are any. Keep in mind to read the portal properly for all information. 

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Frequently Asked Questions

●    Registration Compliance
●    Tax Invoice Compliance
●    Return Filing Compliance

For more comprehensive details, you can refer to the article above. 

In case of such a situation, imprisonment is bound to come to businesses not complying with GST compliance requirements. However, numerous trade companies often argue with the government regarding these harsh consequences, especially for those in the initial stages of GST payment. This is because these trade organizations believe that non-compliance is not always intentional. 

A simple formula can be used to do this- 
Example- Consider a service or good that has a selling price of Rs. 2,000. The applicable GST on it is 18%. The net calculation as per this would be 2,000+(2,000X18/200) = 2,000 + 180 = Rs. 2,180. 

The different GST rates are classified into four different categories- 
●    5% GST
●    12% GST
●    18% GST
●    28% GST

In case of such a circumstance, a penalty of Rs. 100 will be charged. In case of further delays in timely GST compliance, a penalty of Rs. 200 may be levied as a fine. This is subject to a maximum amount of Rs. 5,000 in severe cases when need be.