A guide to obtaining new gst registration online has been provided in our articles, along with the minimum turnover limit for obtaining GST registration. Following the receipt of a GST registration certificate, let’s discuss all the immediate steps one must take to remain compliant under GST.
The registration will become effective when a person becomes liable to register within thirty days after becoming liable for registration. But where the application is submitted beyond the 30 day period, then registration shall be effective from the date of the grant of registration.
It is important to note that businesses operating in different states must register separately under GST. GST rules must be followed separately by each of these GSTINs.
Display GST Registration details in place of business
- 1 Display GST Registration details in place of business
- 2 Identify the place of supply to decide whether to charge CGST & SGST or IGST
- 3 Start issuing the GST registration compliant invoices
- 4 Charge and collect GST Registration on all taxable sales made
- 5 File ITC-01 to claim the input tax credit on the stock of goods lying
- 6 Begin to avail input tax credit on purchases
- 7 Maintain proper accounts & records as per GST law
There must be a prominent display of the GST registration certificate at every business location, including the principal place of business.
Registered businesses must display their GST identification number(GSTIN) at the entrance to their registered offices or factories as soon as they obtain it.
Identify the place of supply to decide whether to charge CGST & SGST or IGST
Provide information regarding the nature of the transaction, such as whether the supply takes place within or outside the state. This can be determined by referring to GST law’s provisions on place of supply.
In either case, CGST & SGST or IGST will be charged depending on the place of supply. Goods and services have different rules for the place of supply.
Start issuing the GST registration compliant invoices
Buyers will claim input tax credits based on the GST invoice issued. Therefore, every business must start issuing valid invoices once it obtains GST Registration, conforming to all the invoicing rules. Invoices that were already issued to the customer before the effective date of GST registration must be revised against those that were already issued to the customer.
GST invoices are required for effectsuing taxable supplies, while bills of supply are required for effectsuing exempt supplies or by composition dealers. Whenever taxable and exempt supplies are supplied to an unregistered person, a single invoice-cum-bill must be issued. Certain fields in an invoice must be filled out.
According to CGST regulations, an invoice must contain the following mandatory fields:
- Serial number of up to 16 characters that are alphanumeric along with special characters, unique for a financial year
- GSTIN of the supplier
- Date of issue
- GSTIN of a GST registered recipient, along with name and address of the recipient and for delivery
- Description of goods or services
- Rate of tax
- Amount of tax for taxable supplies as CGST, SGST/UTGST or IGST
- HSN code
- Place of supply along with the name of the State in case of inter-State trade.
- Whether or not the tax is payable on a reverse charge basis
- Signature of supplier
GST invoices must be issued within a specified period of time under the law. The tax invoice must be issued when the goods are removed from the premises and within 30 days of the service being rendered if the service is provided.
Charge and collect GST Registration on all taxable sales made
All taxable supplies are to be charged GST based on the law’s specified rates. A unique HSN code is assigned to each class of goods or services, resulting in four GST rates of 5%, 12%, 18% and 28%.
The GST invoice raised by a taxpayer must include the tax rates. The buyer is charged GST except when the seller is a composition dealer, who is not required to collect GST from the buyer. Failure to do so will result in penalties. A GST-registered seller’s price includes GST, so buyers pay GST to them.
Before filing GSTR-3B, suppliers must deposit GST collected through challans online with the government. The reverse charge cases are an exception to this, as explained in the section below.
File ITC-01 to claim the input tax credit on the stock of goods lying
File form ITC-01 before the 30 days of becoming eligible to claim the Input tax credit (ITC) i.e., 30 days from the grant of GST registration.ITC-01 is filed to claim the input tax credit of CGST & SGST or IGST paid on the purchase of inputs or input services that are used in manufacturing the finished goods.
In addition to raw materials and consumables, the stock of finished goods will include raw materials and consumables used in the production process. Therefore, ITC claims can be made for GST paid on completed goods lying in stock that are now eligible for ITC claims.
Begin to avail input tax credit on purchases
The ITC will be available for all purchases made after the effective date of GST registration. You can claim this ITC on a provisional basis with GSTR-3B, which is filed every month. GSTR-2A, available on GST portal, can also be reconciled with GSTR-3B before claiming ITC. By doing so, you will ensure that you are not claiming an excess or short ITC.
The ITC cannot be claimed by a composition dealer on purchases he makes. A credit ledger will be maintained for each GSTIN for the amount declared as ITC. GST liability can be repaid using the ITC available. Conditions apply for ITC use.
ITCs help reduce the prices through the supply chain and ultimately benefit your consumer. Make sure you have the tax invoice or debit note issued by your supplier, goods must be delivered, and the supplier must file the GSTR-1 form.
Maintain proper accounts & records as per GST law
Businesses registered under GST are required to maintain certain records and documents that prove the transactions they carry out. In order to file annual returns in GSTR-9 or GSTR-9A for a particular financial year, businesses must keep records at least for 72 months from the due date. Some of the records businesses should collect are:
- Production of goods
- Outward and inward supply of goods and services
- Stock register
- ITC availed
- Output tax payable and paid
Accounting records can be maintained electronically, using ERP or cloud-based software, as permitted by law.