A Quick Guide to GST Compliance for Startups

Starting a new business in India comes with its share of excitement—and paperwork. One of the most critical regulatory requirements for startups is Goods and Services Tax (GST) compliance. Whether you're launching an e-commerce venture or offering professional services, understanding how GST works can save you from costly penalties and set a solid foundation for your financial operations.

In this quick guide, we break down the essentials of GST compliance tailored for startups.

What is GST?

GST (Goods and Services Tax) is a unified indirect tax that has replaced multiple taxes like VAT, service tax, and excise duty. It's destination-based and levied at every stage of the supply chain, with a full set-off for the tax paid on inputs.

For startups, this means you need to:

• Register under GST (if applicable)
• File returns regularly
• Pay taxes accurately
• Maintain records properly

When Should a Startup Register for GST?

You must register for GST if:

• Your aggregate turnover exceeds ₹20 lakh (₹10 lakh for NE & hill states)
• You sell goods or services interstate
• You operate an e-commerce platform
• You're involved in import/export or SEZ units
• You want to claim Input Tax Credit (ITC)

Even if your turnover is below the threshold, voluntary registration can help boost credibility and allow input credits.

Key GST Compliance Requirements

1. GST Registration
   • Apply via the GST Portal (gst.gov.in)
   • You'll receive a unique GSTIN (GST Identification Number)
2. Invoicing
   • Use GST-compliant invoices with:
     • GSTIN
     • HSN/SAC codes
     • Tax breakup (CGST, SGST, IGST)
     • Invoice number and date
3. Return Filing
   • Monthly/Quarterly Returns (e.g. GSTR-1, GSTR-3B)
   • Annual Return (GSTR-9)
   • Composition Scheme (CMP-08 for eligible businesses)
4. Payment of GST
   • Due by the 20th of every month (standard), or quarterly under QRMP
5. Maintain Books & Records
• Keep invoices, purchase registers, ITC claim proofs, e-way bills, etc. for 6 years
6. Input Tax Credit (ITC)
   • Track and claim tax paid on inputs, services, and capital goods

Common Mistakes to Avoid

• Missing deadlines for return filing
• Incorrect HSN/SAC codes
• Not reconciling GSTR-2B with your purchase register
• Delayed payment of GST liability
• Claiming ineligible ITC

These can lead to notices, interest, and penalties—something no startup wants to deal with early on.

How a CA Firm Can Help

GST laws are constantly evolving, and for a growing startup, compliance can become overwhelming. A professional Chartered Accountant (CA) can:

• Handle end-to-end GST filing
• Advise on tax planning and credits
• Help respond to GST notices
• Guide your team in maintaining GST-ready records

Outsourcing compliance lets you focus on what matters—building your business.

Final Thoughts

GST compliance may seem daunting, but with the right understanding and support, it becomes a seamless part of your financial routine. By staying compliant, your startup avoids regulatory risks and earns trust with vendors, investors, and customers alike.

Need help with GST registration, returns, or planning? Reach out to CA S.B. Gokhale & Company for expert guidance tailored to your startup's journey.