How can I make my business GST compliant?

Now that the law of GST has been passed it will be necessary for your business to ne GST ready. The question is how to make your business GST compliant. To make your business a GST compliant it will be necessary for you to register under GST and move your business from VAT, service tax and excise. There are step by step information as to how to register.

Let us look at these steps one by one;

How to register for GST? (First step to GST compliant business)

The businesses that have a turnover of above 20 lakhs will have to apply for GST. GST impact will differ from niches of business to business.

But the businesses that will have to register mandatorily for GST are:

• Input service distributor
• Ecommerce sellers
• Online information database access
• Interstate suppliers
• Casual and non-resident taxable person
• Business liable to pay taxes under reverse charge
• Agents supplying on behalf of taxable person
• Retrieval services from outside India to an unregistered person
• Agitator supplying services under his brand name
• Person responsible to deduct TDS

Steps for registration that will make your business GST compliant

Step1

1. Fill the GST form and get registration 01
2. Provide your pan card number, phone number, email id and submit the form
3. After the verification you will receive an OTP and a verification number on your mobile and email id
4. Fill the part B of GST registration
5. Specify the application number
6. Attach other requirements with the form
7. Photographs, business, managing trustee, etc and authorized signatory

Step2

Constitution of taxpayer

1. Partnership deed
2. Registration certificate
3. Other proof of constitution
4. Proof of principal
5. Additional proof of business

For own premises

Any documented in support of the ownership of the premises like

• Property tax receipt
• Municipal khata copy
• Or copy of electricity bill

For rented or leased premises

• Copy of rent
• Or lease agreement along with owner’s documents like
• Property tax receipt
• Municipal khata copy
• Copy of electricity bill

Bank account related proof

• Scanned copy bank pass book
• The first page of bank pass book or bank statement

Authorization forms

For each authorization signatory

• Authorization copy
• Or copy of managing committee
• Or board of directors in the prescribed format

Step 3:

If additional information is required

• Form GST registration 03 will be issue
• Respond must be given in GST registration form 04
• With required information with 7 working days from the date of receipt of form registration 03

Step 4:

If you have provided all required information through GST form 01 or 04

• A certificate of registration in form 046 will be issued within 3 days from date of receipt of form GST form 01 or 04
• If the details submitted are not satisfactory the registration will be rejected using form GST 05

Existing business

In case of existing business you are already registered at your VAT, service tax or excise. You will have to register under GST by default, let us see the process of registration.

Make your business GST compliant by following the Process of registration for existing business are as follows:

All dealers registered with central or state tax authorities and having a valid pan number will be auto migrated and allotted with a provisional certificate of registration in form GST registration 21 within 6 months. Dealers are required to submit form GST registration 20 in the GST portal along with information and documents as prescribed which are:

• Pan card of the company
• Registration certificate of the company
• MOA or AOA
• Copy of bank statement
• Declaration to comply with the provision
• Copy of board resolution

In case the information provided is complete and satisfactory the final registration certificate will be issued in the form GST 06. If the details submitted are not satisfactory a short cause notice will be issued in form GST registration 23 . There will be a hearing before cancelling the provisional certificate registration. If the show called hearing is not successful or the details are not provided within the alloted period the provisional registration allotted will be cancelled by issuing an ordering form GST registration 22.

How do you move from VAT to GST?

• All the dealers registered with VAT authorities and valid pan will be auto migrated along with provisional certificate in GGT registration form 21.
• Within 6 months the dealers are to submitted the GST registration form 20 along with information required
• If all the data provided are not accepted the provisional form provided will be cancelled by registration form 22

How do you make sure that your tax is carried forward to GST?

You can carry your current input tax credit to GST. If the input has crude on purchase, make sure of the following on purchase:

• Invoices or other prescribed tax documents
• Dates of invoices should not be older than 12 months
• Has to be decaled in the last VAT return
• Should be qualified credit under GST
• Should not have opted for composite scheme

If the capital has crude on buying capital assets, make sure of the following conditions

• Deferred or delayed because of starting date of commercial production
• Such credit is declared in the last VAT return

Once the transfer to GST is done the VAT will remain cancelled.

What is the procedure to move from service tax to GST

• All the dealers registered with service tax authorities and having a valid pan number will be automatically moved to GST with provisional certificate for it in GST registration form 21.
• Within six months the dealers are supposed to submit the registration GST form in the GST portal along with required information.
• Once all the data and information provided is accepted you will be provided with a final GST registration certificate in registration form 6.
• In case the information is not satisfactory a notice in form 23 will be issued and a hearing will be taken before cancelling or providing the final certificate.
• If a hearing is not successful or the details are not provided within the given amount of time the certificate will be cancelled under form 22.

How do you make sure that your input tax credit under service TAX is carried forward to GST?

You can carry forward the input of your current return input tax credit to current GST

If the input has crude on expenses, you have to make sure that the following conditions are satisfactory

• Have the invoices or other prescribed tax documents
• Dates of invoices should not be older than 12 months
• Has to be decaled in the last VAT return
• Should be qualified credit under GST
• Should not have opted for composite scheme

If the capital has crude on buying capital assets, make sure of the following conditions

• Deferred or delayed because of starting date of commercial production
• Such credit is declared in the last service tax return

Once the transfer to GST is done the service tax will remain cancelled.

How to move from excise to GST?

• All the dealers registered with excise authorities and having a valid pan number will be automatically moved to GST with provisional certificate for it in GST registration form 21.
• Within six months the dealers are supposed to submit the registration GST form in the GST portal along with required information.
• Once all the data and information provided is accepted you will be provided with a final GST registration certificate in registration form 6.
• In case the information is not satisfactory a notice in form 23 will be issued and a hearing will be taken before cancelling or providing the final certificate.
• If a hearing is not successful or the details are not provided within the given amount of time the certificate will be cancelled under form 22.

How do you make sure that your input tax credit under excise is carried forward to GST?

You can carry forward the input of your current return input tax credit to current GST

If the input has crude on expenses, you have to make sure that the following conditions are satisfied

• Have the invoices or other prescribed tax documents
• Dates of invoices should not be older than 12 months
• Has to be decaled in the last VAT return
• Should be qualified credit under GST
• Should not have opted for composite scheme

If the capital has crude on buying capital assets, make sure of the following conditions

• Deferred or delayed because of starting date of commercial production
• Such credit is declared in the last service tax return

Once the transfer to GST is done the excise will remain cancelled.

It is going to be compulsory for all the business that come under GST rule to become GST complaint. The countdown has already began and the registration will have to be done so you can finally complete the compliance with GST which is the next thing that you have to worry about. Several rules have been laid down that will include how we raise invoices, how we report our purchases, sales and how we file tax returns.

Now let us come to that one by one.

To make your business GST complaint learn how to raise invoices in GST

There are two types of Invoice that are issues under GST

1. The taxable invoice which is issued to pass GST credit
2. And bill of supply is issued when the supply is exempted or the supplier is under composite scheme that is no GST credit is passed on.

Difference between your current invoice and GST invoice

• The serial number should be a consecutive number, containing alphabets and numerals and must be unique for a financial year.
• If the recipient if unregistered and taxable value of supply is Rs. 50,000 or more the state name and code are required. In case of interstate supply the state, name will be required.
• Unique ID is issued to UN bodies, embassies or any other notified persons.
• Taxable value is the value after deducting discount or abatement if any
• HSN code in case of goods or accounting code in case of services must be mentioned for supplies or notified persons.

What is the time limit of issuing invoices?

• If you are providing services GST invoice must be raised within 30 days of offering services
• In case of goods invoice must be raised at the time of removal of goods from your premises

How many copies of invoices will be required?

• If you are providing services two copies of the invoice are required one for recipient and one for supplier
• In case of goods three copies will be required one for recipient, one for supplier and one for transporter

How to revise an invoice issued and accounted for?

An invoice can be revised by issuing a subsequent debit or credit note.

• Debit note must be issued in cases where the taxable value of the invoice has to be increased
• Credit note must be issued in cases where the taxable value of the invoice needs to be decreased.

How to raise GST compliant invoices?

In order to issue a professional GST invoices and make compliances easier you will have to adopt superior next generation technology. In case you have been using an accounting software for now it is time to upgrade to a GST ready software.

How to file GST return? (GST compliant)

With GST being implemented it won’t matter if you are a trader, manufacturer, reseller or a service provider. All you will be needing is to file GST returns. All tax payers will have to pay three monthly returns, one quarterly return and one annual return. Job works and ecommerce companies will have to file one additional return every month.

The various returns include VAT, excise and service tax and the returns must be filed in every state they operate. There are possible confusions and uncertainties in deciding the place for manufacturing and the time of supply. With GST it does not differ if you are a manufacturer, seller, trader, service provider what you need is to file GST returns.

What are the returns to be filed under GST? And what are their due dates?

All tax payers will have to file 3 monthly returns, 1 quarterly return and 1 annually return.  Job works and ecommerce business will have to file one extra return every month.

Step by step procedure of file return to provide better idea for GST training:

1. Declare your supplies only and input for the purchases are automatically populated based on vendor submissions.
2. 10^th of every month you will declare your GSTR 1
3. Auto populated and make corrections in GSTR2-A between 11^th and 15^th
4. The auto populated GSTR3 will be available for payment and filing on 20^th

How to simplify the process of filing returns under GST?

GST payments can be made only using digital portals the companies with branches will have to find a smarter way to file returns to facilitate branch transfers. Which is charged by GST and will have to re plan their location as the taxation will be uniform with the GST in the picture.

GST training for raising a GST invoice and how is it different from the normal invoice and much more.

GST invoice

If you goods or services to another tax payer under GST you are required to issue a GST invoice in the prescribed format.

Two types of invoices issued under GST:

Taxable invoice which is issued to pass GST credit and

Bill of supply which is issued when the bill of supply is exempted or the supplier is under composite scheme i.e no GST credit is passed on.

Difference between current invoice and GST invoice

• The serial number should be consecutive number containing only alphabets or numbers and must be unique for a financial year.
• If the recipient is unregistered and taxable value of supply is Rs.50,000 or more, the state name and code are required. In case of interstate supply the state name if required.
• Taxable value is the value after deducting discount or abatement, if any.
• HSN code in case of goods or accounting code in case of services has to be mentioned for supplies by notified person.

Two copies of invoices are required in case of service providers one for recipient and one for supplier and in case of selling goods three copies of invoices are required one for recipient, one for supplier and one for transporter.

After your business is GST compliant you will have to make sure that you find the software that is GST ready to match up with the business GST process. Reach is one of the most suitable software that is easily customizable, cloud based, GST ready and provides all the features that you need for managing a business. It is a smart software that knows what a business requires. It has bank level of security and integrates with other modules easily to give all the requirements of business. Reach is a next generation software that knows exactly how to manage a business from all the sides and how to improve its productivity.

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Sumathi

I’m a tax expert with over 10 years of professional experience. I’ve gained practical insights on GST and other Taxes during my tenture as a Tax expert and GST Trainer in Reach Accountant.