GST Registration & Compliances

GST compliance is not limited to obtaining GST registration. It covers various aspects, including determining registration requirements, compliance with E-Way Bill provisions, and availment of eligible Input Tax Credit (ITC), timely payment of taxes, issuance and reporting of correct invoices, and filing of periodic GST returns.

Many businesses are not required to obtain GST registration at the initial stage due to their turnover being below the prescribed threshold limit. The GST law provides different turnover thresholds for different States and categories of suppliers. However, once a person crosses the applicable turnover threshold, he is mandatorily required to obtain GST registration in the State from where he makes taxable supplies.

In many cases, an entity may be engaged in activities that do not fall within the definition of "supply" under the GST law. Therefore, a careful analysis of the nature of the transactions is required to determine whether GST registration is required and whether any GST liability arises.

One of the most technical aspects of GST relates to the Reverse Charge Mechanism (RCM) and availment of Input Tax Credit (ITC). Many businesses lack clarity regarding the applicability of RCM provisions and the stage at which they become eligible to claim ITC. Under GST law, mere receipt of an invoice does not make a person eligible to avail ITC. ITC can generally be claimed only after the actual receipt of goods or services and fulfilment of other prescribed conditions under the GST law.

Apart from this, the concepts of Place of Supply and Time of Supply are among the most critical aspects of GST and require careful evaluation. In many cases, businesses avail Input Tax Credit (ITC) on services without properly determining the correct Place of Supply. This may result in denial or reversal of ITC, along with liability to pay interest and other applicable consequences under the GST law.