What is GST and Why Does It Matter?
Goods and Services Tax (GST) is India’s unified indirect tax system that replaced a complex web of central and state taxes in 2017. For businesses, GST is not just a tax — it is a compliance framework that affects pricing, cash flow, invoicing and record-keeping.
How GST Affects Your Pricing
Every registered business must charge GST on its sales and can claim credit for GST paid on purchases. This input tax credit (ITC) mechanism is powerful but requires accurate record-keeping. Missing an invoice or filing late can mean losing ITC permanently.
Key Compliance Deadlines Every Business Must Know
- GSTR-1 — Monthly sales return, due 11th of following month
- GSTR-3B — Summary return with tax payment, due 20th of following month
- GSTR-9 — Annual return, due 31st December
- GSTR-9C — Reconciliation statement for turnover above ₹5 crore
Missing these deadlines attracts late fees of ₹50 per day (₹20 for nil returns) plus 18% interest on unpaid tax.
Common GST Mistakes Small Businesses Make
1. Not reconciling GSTR-2A Many businesses claim ITC without verifying that their supplier has actually filed and paid. This leads to notices and demand orders from the GST department.
2. Wrong HSN codes Using incorrect Harmonised System of Nomenclature codes on invoices leads to mismatched returns and scrutiny.
3. Missing the reverse charge mechanism Certain services like legal fees, import of services and goods transport attract reverse charge — where the recipient pays GST, not the supplier.
What You Should Do Right Now
If you are unsure about your GST compliance position, the best step is a compliance review. Our team at Verslas Guru can audit your filings, identify gaps and ensure you are not exposed to penalties.
