What this page helps you decide
- Determine applicability of GST registration thresholds (₹40 Lakh/₹20 Lakh for goods, ₹20 Lakh/₹10 Lakh for services).
- Ensure timely filing of monthly/quarterly returns (GSTR-1, GSTR-3B) and annual reconciliation (GSTR-9/9C).
- Maximize eligible Input Tax Credit (ITC) while complying with Section 16(2) and Section 17(5) blocked credit rules.
- Implement statutory e-invoicing and E-way bill compliance for B2B supplies and transport of goods.
Accuracy notes before you act
- GSTR-2B matching rule: Input Tax Credit can only be claimed if the invoice is generated by the supplier, filed in GSTR-1, and reflected in your static GSTR-2B statement.
- E-invoicing threshold: Mandatory for B2B supplies and exports for businesses whose aggregate turnover exceeds ₹5 Crore in any preceding financial year.
- E-way bill requirement: Mandatory for movement of goods of consignment value exceeding ₹50,000 (intra-state and inter-state).
- Reverse Charge Mechanism (RCM): Tax must be paid in cash under Section 9(3)/9(4) for specified supplies like GTA, legal services from advocates, and director fees before claiming ITC.
- Late fees and interest: GSTR-3B late fee is ₹50/day (₹20 for NIL return) up to statutory caps; interest on delayed net cash payment is 18% p.a. u/s 50(1).
Documents and facts to keep ready
- Active GSTIN and GST portal credentials.
- Sales register and tax invoices with compliant HSN/SAC codes and IRN QR codes.
- Purchase register reconciled with monthly GSTR-2B statements.
- Bank statements verifying payments to suppliers within 180 days to prevent ITC reversal under Rule 37.
- E-way bill records, transport documents, and delivery challans.
Common mistakes to avoid
- Claiming ITC on blocked items under Section 17(5) such as personal vehicles, outdoor catering, or club memberships.
- Mismatch between outward supplies reported in GSTR-1 and tax paid in GSTR-3B, triggering automated Form DRC-01B notices.
- Failing to reverse ITC with 18% interest if supplier invoice payment is not made within 180 days from the invoice date.
- Transporting goods without a valid E-way bill, attracting a 200% penalty under Section 129 of the CGST Act.
- Delaying return filings beyond 6 months, leading to automatic GSTIN suspension and portal blocking.
Frequently Asked Questions
1. What are the registration turnover thresholds for GST in India?
The aggregate annual turnover threshold for mandatory GST registration is ₹40 Lakh for suppliers of goods (₹20 Lakh in special category states) and ₹20 Lakh for service providers (₹10 Lakh in special category states). Inter-state taxable supplies and e-commerce operators require mandatory registration irrespective of turnover.
2. How does GSTR-2B determine Input Tax Credit (ITC) eligibility?
GSTR-2B is a static monthly auto-drafted ITC statement generated on the 14th of every month. Under Section 16(2)(aa) of the CGST Act, taxpayers can only avail ITC for invoices and debit notes that are reported by suppliers in their GSTR-1/IFF and reflected in GSTR-2B.
3. What is the 180-day rule for ITC reversal under GST?
Under the second proviso to Section 16(2) and Rule 37 of the CGST Rules, if a recipient fails to pay the supplier the invoice value along with tax within 180 days from the date of invoice, the availed ITC must be reversed in GSTR-3B along with interest at 18% per annum.
4. What are the blocked credits under Section 17(5) of the CGST Act?
Section 17(5) blocks ITC on motor vehicles for passenger transport (capacity up to 13 persons, with business exceptions), food and beverages, outdoor catering, beauty treatments, life/health insurance (unless statutory mandatory), membership of clubs, and goods lost, stolen, destroyed, or written off.
5. What is the current threshold for mandatory GST e-invoicing?
E-invoicing on the Invoice Registration Portal (IRP) is mandatory for all registered businesses whose aggregate annual turnover exceeded ₹5 Crore in any financial year from 2017-18 onwards for all B2B transactions and exports.
6. What is the due date for filing monthly GSTR-1 and GSTR-3B returns?
For monthly filers, GSTR-1 (outward supplies) is due on the 11th of the succeeding month, and GSTR-3B (tax payment summary) is due on the 20th of the succeeding month. For quarterly filers under the QRMP scheme, IFF is due on the 13th and quarterly GSTR-3B on the 22nd or 24th based on the state.
7. What happens if GSTR-1 sales do not match GSTR-3B tax payment?
If outward supplies in GSTR-1 exceed tax paid in GSTR-3B by a specified percentage/amount, an automated system notice in Form DRC-01B is issued. The taxpayer must pay the differential tax with interest or explain the reasons within 7 days; failure blocks GSTR-1 filing for the next period.
8. How are export of services treated under GST?
Export of services is treated as a zero-rated supply. Exporters can either export under a Letter of Undertaking (LUT) without paying IGST and claim a refund of unutilized accumulated ITC, or export on payment of IGST and claim a rebate refund from Customs.