GST Compliance & Rules
Legal responsibilities • Filing discipline • Penalties & best practices
Prepared as per latest available GST information
GST Compliance refers to the set of rules, procedures and legal obligations that a GST-registered person must follow on a regular basis to remain compliant with GST laws.
Proper GST compliance helps avoid penalties, interest, notices and cancellation of GST registration. Every registered taxpayer, whether active or inactive, must follow these compliance requirements.
Why is GST Compliance Important?
- Ensures uninterrupted business operations
- Avoids late fees, penalties and interest
- Prevents cancellation or suspension of GST registration
- Maintains good compliance rating
- Builds trust with customers and authorities
Basic GST Compliance Requirements
- Timely filing of applicable GST returns
- Payment of GST within due timelines
- Issuance of proper GST tax invoices
- Correct classification of goods & services
- Accurate reporting of ITC
- Maintenance of prescribed records
GST Invoice Rules
Every registered person must issue a GST-compliant tax invoice for taxable supplies.
Mandatory details on GST Invoice:
- Supplier name, address and GSTIN
- Invoice number and date
- Recipient name and GSTIN (if registered)
- Description of goods/services
- HSN / SAC code
- Taxable value
- GST rate and amount (CGST/SGST/IGST)
- Place of supply
Input Tax Credit (ITC) Rules
Input Tax Credit can be claimed only if certain conditions are fulfilled.
Conditions to claim ITC:
- Possession of valid tax invoice
- Goods or services must be received
- Supplier must have filed returns
- Tax must be paid to the government
ITC not allowed on:
- Personal expenses
- Motor vehicles (with exceptions)
- Food & beverages for personal consumption
- Blocked credits under GST law
GST Return Filing Compliance
- Returns must be filed even if there is no business (Nil Return)
- Non-filing leads to late fees and interest
- Continuous default may result in cancellation of GSTIN
- ITC cannot be claimed if returns are not filed
Books of Accounts & Record Keeping
GST-registered persons are required to maintain records at their principal place of business.
- Sales and purchase registers
- Stock register
- Input tax credit records
- Tax paid and payable records
- Delivery challans
Records should be preserved for the prescribed period as required under GST law.
Penalties for Non-Compliance
- Late fee for delayed return filing
- Interest on delayed tax payment
- Penalty for incorrect reporting
- Suspension or cancellation of GST registration
- Prosecution in serious cases
Best Practices for GST Compliance
- Maintain proper documentation
- Reconcile books with GST returns regularly
- File returns on time without fail
- Consult a GST professional when needed
- Stay updated with GST notifications