Once you obtain GST registration, your core responsibility is to maintain accurate records of all business transactions and ensure timely filing of returns. In straightforward terms, every sale you make and every purchase you incur should be properly documented with valid invoices. Consistent record-keeping not only ensures compliance but also prevents last-minute errors and confusion.
Under GST, two primary returns are required:
This return captures detailed information about your outward supplies, including:
These details are crucial because they enable your customers to claim Input Tax Credit (ITC).
This is a consolidated return where you declare:
It is also the return through which you pay your GST dues.
The frequency of filing depends on your turnover:
Even if there are no transactions during a period, filing a Nil return is mandatory to avoid penalties.
| Return | Purpose | Monthly Due Date | Quarterly Due Date |
|---|---|---|---|
| GSTR-1 | Report sales | 11th | 13th |
| GSTR-3B | Summary + tax payment | 20th | 22nd / 24th |
GST calculation is based on two key components:
Formula:
GST Payable = Output Tax – Input Tax Credit
Example:
Final GST Payable = ₹1,800 – ₹800 = ₹1,000
If ITC exceeds output tax, the excess can be carried forward to the next period.
Forward Charge Mechanism (FCM)
This is the standard system where:
Reverse Charge Mechanism (RCM)
In specific cases, the responsibility shifts to the buyer. Common scenarios include:
GST under RCM must be paid in cash, but eligible ITC can be claimed later.
Input Tax Credit allows you to reduce the GST paid on purchases from your total tax liability.
Conditions to Claim ITC:
ITC is Not Available On:
A valid GST invoice must include the following:
Basic Details
Customer Details
Goods/Services Information
Tax Details
Final Values
Other Important Information
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