Once you have registered your business under GST and obtained your GSTIN number, the next step, some compliances with regard to GST are to be considered with all the stipulations and requirements that come with this new taxing system. Obviously, the novelty of and major changes in the system have rendered a lot of people confused as to how they should stay compliant with the new regime.
Compliances After Registering For GST
- Transactions have to be classified as either ‘goods’ or ‘services’ using the HSN/SAC code mapping which is a code that is used for surface- surveying as well as map-making services under Goods and Service Tax classification. Keep in mind that certain classifications have altered from the previously used VAT laws. An IGST (Integrated GST) model is being used by GST which classified these transactions into ‘interstate transactions’ and ‘intrastate transactions’. Reclassification of items and redefining of tax rates must be done keeping in mind the rate changes and exemptions.
Criteria For Assigning Either 4 Or 6 Digit HSN Code To The Goods And Services Under GST
- Those who have turnover up to ₹5 crores are required to show a 4 digit HSN code on their tax invoices
- Those entities who have a turnover exceeding ₹5 crores or above are required to show a 6 digit HSN code on their tax invoices.
- In the case of businesses having a turnover less than 5 crores, HSN code is not mandatory for B2C Supplies
- In the case of import and export commodities, an 8 digit HSN code is stipulated to be adopted in compliance with international standards and regulations.
- Display of GST registration details is mandatory. Once you have successfully registered, the registration certificate is supposed to be displayed in a significant place in the vicinity of the business office or center. Also, once you have procured the GSTIN, it needs to be displayed on the board that is present at the entrance of the premises. Defaults in the above law can lead to a penalty up to Rs 25000/-
- Supply and its time and place have a crucial compliance-related aspect to them. You need to refer to the applicable provisions under the GST for the supply time and supply place because taxation will vary in accordance with that. Determination of whether the supply place is the inter-state or intra- state is important as it will affect the application of SGST and CGST or IGST. Thus, you need to be clear about these details of the supply of your product or service.
- Registration under GST and the location of your business have an extremely important relationship as all the warehouses/factories/outlets or other supply points of your business need to be registered and identified under GST.
- You also need to start availing ITC on purchases made after the GST has been successfully registered. It can be claimed through GSTR 3B on the GST portal every month. You should also reconcile the GSTR 2A before you file GSTR 3B to ensure the correct ITC claim.
- Filing GST returns: Businesses need to first review and understand what returns are applicable to them and file their returns accordingly. They are available to be filed at the GST portal. Normally, GSTR-1 for sales details and GSTR- 3B for sales summary and ITC are stipulated to be filed within the given due dates to avoid any penalty or fine. Composition dealers are required to file a single return through GSTR-4 every quarter.
Also read: Is Registration Under GST Mandatory?
As per the newly introduced QRMP Scheme by the government, taxpayers having turnover up to 5 crores can file GSTR3B and GSTR 1 quarterly and pay the tax monthly using QRMP. It is also to be noted that QRMP is not mandatory and a business can continue filing GSTR 3B monthly and GSTR 1 monthly or quarterly as per their requirements.
All persons registered under the QRMP scheme should pay the tax due in each of the first two months of the quarter by the 25th of the next month in that quarter
Methods Of Making Payment For GST Under QRMP Scheme
- Fixed Sum Method (FSM) – The taxpayer who is filing a Quarterly return in a preceding quarter has to pay 35% of the tax in the 1st and the 2nd month of the quarter. The balancing amount of tax is to be paid in the 3rd month.
- Self-Assessment Method (SAM) – The taxpayer has to calculate the tax payable from the sales and purchase did during the last month and pay the GST directly in form GST PMT-06. If the tax liability is Nil, the taxpayer has to do nothing for the month.
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