A Step-by-Step Guide to GST Filing for Startups

Posted In | Finance | Accounting Software | India Accounting Tax

For startups, understanding the Goods and Services Tax (GST) and its filing process is crucial. GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. In this article, we provide a step-by-step guide to help startups navigate the GST filing process.
 

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Step 1: GST Registration

Firstly, a startup must register for GST if its annual sales are over Rs. 20 lakh. However, for northeastern and hill states, the threshold is Rs. 10 lakh. Registration can be done online through the GST portal.
 

Step 2: Know Your GSTIN

Once registered, the business will receive a unique code known as GST Identification Number (GSTIN). This 15-digit number is based on the state code, PAN number, and other factors.
 

Step 3: Understand GST Returns

There are different types of returns under GST: GSTR-1, GSTR-2, GSTR-3B, etc. Each return form serves a different purpose and should be filed according to the prescribed timeline. For instance, GSTR-1, which details outward supplies of taxable goods and services, should be filed monthly or quarterly depending on the business turnover.
 

Step 4: Filing GST Returns

To file GST returns, visit the GST portal. Choose the correct form and the relevant tax period. Fill in the details, sign digitally, and submit. A confirmation will be sent on the registered email and mobile number.
 

Step 5: Paying GST

After filing returns, calculate the GST on your taxable goods. Pay this amount using the GST portal. If you have any Input Tax Credit (ITC), utilise it to offset your GST liability.
 

Step 6: Maintain Proper Records

For compliance and possible audits, maintain proper records of all invoices, bills, e-way bills, and shipping bills. This will also help in claiming ITC and resolving any discrepancies.

 

While GST filing might seem complex, it is a straightforward process when understood correctly. Startups, with their limited resources, should take the time to understand and comply with GST to avoid penalties and reap the benefits it offers. For more complex situations, consulting a tax professional is recommended.