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Understanding the Basics of GST for Startups

Understanding the Basics of GST for Startups

by | Apr 11, 2023 | Goods & Services Tax | Indirect Tax

GST, or the Goods and Services Tax, is an indirect tax that is levied on the supply of goods and services in India. It is a comprehensive tax that has replaced several other indirect taxes that were previously in place. For startups, there are several important details regarding GST that they should be aware of:

Following are the points which a startup must keep in mind while kickstarting business:

1.  GST Registration

2. GST Compliance

3.  GST Rates

4. Input Tax Credit (ITC)

5. GST Council

6. E-Way Bill

7. GST Audit

1. GST Registration:

Every business with a turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for northeastern states) is required to register for GST. Startups should ensure that they register for GST in a timely manner to avoid penalties and legal issues.

2. GST Compliance:

Once registered, startups must comply with the rules and regulations of GST. This includes filing monthly or quarterly returns, maintaining proper records and invoices, and paying GST on time.

3. GST Rates:

GST is charged at different rates for different goods and services. Startups must be aware of the applicable GST rates for their products or services.

4. Input Tax Credit (ITC):

Under GST, businesses can claim ITC on taxes paid on purchases. Startups should maintain proper records of their purchases and claim ITC to reduce their tax liability.

5. GST Council:

The GST Council is responsible for setting GST rates, making recommendations on GST policies, and resolving disputes related to GST. Startups should keep themselves updated on any changes or updates made by the GST Council.

6. E-Way Bill:

For the movement of goods worth more than Rs. 50,000, an e-way bill must be generated. Startups should ensure that they generate e-way bills for their goods to avoid legal issues.

7. GST Audit:

Businesses with an annual turnover of more than Rs. 2 crores are required to undergo a GST audit. Startups should be prepared for the audit and ensure that they comply with all GST regulations.

Monthly Compliances that a Startup needs

Monthly Compliances that a Startup needs

by | Apr 7, 2023 | Direct Tax | Income Tax, Goods & Services Tax | Indirect Tax

These are some of the common monthly compliance requirements that startups need to adhere to. However, the compliance requirements may vary depending on the specific business and industry. It’s advisable to consult with an experienced professional or a compliance expert to ensure that the startup is complying with all the necessary requirements.

The monthly compliance requirements for a startup can vary depending on the industry, size, and location of the business. However, here are some common monthly compliance requirements that startups may need to adhere to:

Monthly Compliances a Startup Needs:

1. Goods and Services Tax (GST)

2. Employee Provident Fund (EPF)

3. Professional Tax

4. TDS/TCS

5. Income Tax

6. Statutory Audits

1. Goods and Services Tax (GST): If the startup is registered under the GST regime, it needs to file monthly GST returns, including GSTR-1, GSTR-3B, and GSTR-9/9C, as per the prescribed due dates.

2. Employee Provident Fund (EPF): Startups that have more than 20 employees need to deduct and deposit their employees’ provident fund contributions on a monthly basis. They also need to file monthly returns for EPF, including ECR (Electronic Challan cum Return), on the EPF portal.

3. Professional Tax: Some states in India require businesses to register and pay professional tax on a monthly basis. The tax amount varies depending on the state and the salary of the employees.

4. TDS/TCS: Startups that are liable to deduct tax at source (TDS) or collect tax at source (TCS) need to deposit the tax amount to the government and file monthly TDS/TCS returns, as per the due dates.

5. Income Tax: Startups that are liable to pay advance tax or self-assessment tax need to deposit the tax amount on a monthly basis. They also need to file monthly tax returns, such as Form 26AS and Form 16, as per the prescribed due dates.

6. Statutory Audits: Some startups are required to conduct statutory audits on a monthly basis. For instance, startups that are registered under the Limited Liability Partnership (LLP) Act or the Companies Act need to conduct monthly audits of their accounts.