List of Do’s and Don’ts under GST

GST was introduced almost two years back in India with the “One Nation One Tax” motto. While most businesses and professionals have synced with this revolutionary tax system. However, there is a list of DO’s and DON’Ts under GST in order to enjoy all the relief that the government is providing.

Do’s under GST

1. Serial Number of Invoices – Start invoices Serial Number from first after registration and change Numbering after end of Financial Year every Year.                (For Example – GST Number taken in Month of Sept, 2019, then Start Billing Number as Invoice No. 01/2019-20 and then in the Month of April, 2020 against Invoice Number will start from 01/2020-21).
2. Use GST Number – While Purchasing or Incurred Expenditure give your GST Number to every vendor, so that vendor while update your GST Number in his record.
3. GST Number Board – Display the number on the board and certificate of registration at a prominent location at the business premises.
4. Filing GST Returns in Time – To avoid notices from the government you should file your GST Returns in time. Moreover, late filing of your GST Return may also attract interest and penalties as may be prescribed.
5. Uploading Data in GSTR 1 – While filing GSTR 1 you need to furnish various details. Once filed, the GSTR 1 cannot be amended. So, you have to be careful at the time of furnishing data to ensure that no mismatches in the data are found at the time of GST Reconciliation.
6. Maintaining Proper Documentation – Maintaining proper documents is a healthy practice even if your business does not fall under the GST audit criteria. Moreover, maintaining documents ensure smooth GST Reconciliation process. Some of the important document that should be maintained is the sales register, purchase register, payment challans, e-way bills etc.
7. E-Way Bill – E Way Bill is an Electronic Way bill for movement of goods to be generated on the e-Way Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 for Interstate transfer and Rs.1,00,000 for within state Transfer of Goods.
8. Informing GST Authorities regarding a change in business – If there is any change in the details of business filled out during registration must be communicated to GST authorities. Moreover, you need to inform the GST Authorities 15 days prior to such change in the business. However, you need to submit an application for such change on the GST Portal along with all the prescribed documents.
9. GST Audit – When your business turnover exceeds 2 crores INR mark you should get your books of accounts audited by a CA or CMA. In addition to this, you need to submit audited GST Return together with audited reconciliation statements.

Don’ts under GST

1. Paying GST under wrong head – You should be extra careful at the time of paying GST as you can make a mistake of paying GST under the wrong head. Further, GSTN does not provide inter-utilization of taxes wrong paid that leads to an increase in the working capital.
2. Forgetting Nil Return filing – You may sometimes forget to file your Nil Return. Forgetting to file GST nil return may hamper the flow of your subsequent return filing. Moreover, in some cases, the GSTN do not allow to file a return where previous GST returns are not furnished.
3. Applying Wrong Tax Rates – You should stay up to date regarding the new tax rates as the government keeps issuing new notifications regarding it. Further, at the time of issuing an invoice, you should also make sure that the tax rate charged is correct to claim correct ITC.
4. Claiming Ineligible ITC – You should never try to claim ITC which is ineligible to be claimed as you may get a notice from the GST authorities. Some of the common cases where ITC cannot be claimed are:

1. Car Purchase & Repairs and Maintenance
2. Restaurant Bills
3. Rent-a-cab, life insurance, health insurance
4. No ITC will be available for the goods/ services used for personal purpose etc.

Disclaimer:

This material and the information contained herein prepared by P R A S S & Associates LLP is intended to provide general information on the subject stated and is not an exhaustive. We are not providing any professional advice or service by means of the above information. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult with us or any other qualified professional adviser.