GST Compliance

In the following cases GST registration is mandatory:

• When the turnover of any business exceeds Rs. 40 lakhs per year for states in the normalised category (depending on state law).
• Supply of goods to other states even if turnover is less than the specified limit
• If a person consumes the service for the purpose of his business where GST is levied under a reverse charge mechanism.
• If a person consumes the service for the purpose of his business where GST is levied under a reverse charge mechanism.
• Business through e-commerce
• A person supplying goods or rendering services in a state where he has no fixed place of business, GST registration is mandatory in that state as a casual taxable person.

Separate GST registration is required in every state where the goods or services are supplied. Turnover in point 1 above is considered for the total turnover of the business and not per state. Further, the aggregate turnover of all businesses under one PAN card is to be considered for the limit of GST registration.

Regarding compliance, there are several schemes available depending on the nature and scale of the business. For small business houses, a composition scheme is available and for mid-size firms quarterly compliances can be done instead of monthly.

We at PRANV assist you in optimising your tax impact by analysing your business model. We keep you update on the various changes in the law to keep your business statutory compliant.

GST Reconciliation

With the increase in the use of e-filing, it is easy to cross verify the data. Like VAT, under GST also, you can avail credit in respect of tax paid while purchasing goods. You need to pay only tax on the value addition.

This leads to a reconciliation that taxes that you claim to be paid on purchases and want to avail credit in respect of same should be shown in your account by the supplier.

It seems simple to have reconciliation with your vendors; however, it needs a continuous check. The issue can arise due to non-filing of return by the supplier or non-deposit of tax by the supplier to the government; To claim the input tax credit (ITC), the taxpayers have to reconcile their data with that of the vendors regularly. Although the reconciliation process is simple, the necessity for the taxpayers to continuously keep track of any discrepancy or mismatches could be time-consuming.

Major issues due to which reconciliation is required:

• Mismatch in invoice number of the purchase invoices as mentioned by seller and purchaser.
• Purchaser is doing business in multiple sate and seller raised the invoice using different GSTIN.
• Both the purchaser and supplier have recorded invoices in different return periods.
• Date of recording invoice.
• Rounding of amount.

Regular reconciliation is required to save time, cost, timely availing of ITC and saving in penalties. Above all, it gives peace of mind.