If you're a business owner in India, then you know that goods and services tax (GST) is an important part of your tax obligations. But did you know that filing your GST on time is just as important?

Filing GST late can result in penalties, which can take a toll on your business's cash flow. Furthermore, keeping accurate records becomes more difficult if you're not up to date with your GST filings.

So why take the risk? Filing GST on time is crucial for the success of your business. Here's a closer look at three key reasons why:

Filing GST on time is important to avoid penalties

» Late filing of GST can result in penalties
Late fees are a type of penalty for late filing. It costs Rs. 100 per Act every day to be late. So, 100 is covered by CGST and 100 is covered by SGST. The daily sum will be Rs. 200. The top amount is 5,000 rupees. In the event of a delayed filing, there is no late fee for IGST. Interest at a rate of 18% per year must be paid in addition to the late fee. The taxpayer must compute it based on the amount of tax due. From the day after filing to the day of payment, there will be a grace period.

» Penalties can be avoided by filing GST on time
Penalties can be avoided by filing GST on time. By ensuring that all GST returns are lodged on time, businesses can avoid the risk of being penalised by the GST Council. Good record keeping is also important to ensure that businesses are able to meet their GST obligations.

Filing GST on time is important for cash flow purposes

» Filing GST on time can help improve cash flow
One of the main reasons why businesses should file their Goods and Services Tax (GST) on time is to improve their cash flow. When businesses file their GST late, they not only incur penalties, but they also have to pay interest on the outstanding amount. This can quickly eat into any profits that the business has made. Good cash flow is essential for businesses of all sizes, as it allows them to meet their financial obligations and keep operating smoothly. By filing GST on time, businesses can ensure that they have a healthy cash flow and can avoid any financial difficulties down the road.

» Poor cash flow can be a result of late GST filing
Another reason why it's important to file GST on time is that poor cash flow can be a direct result of late filing. When businesses don't have enough money coming in to cover their expenses, they may need to take out loans or dip into their savings to make ends meet. This can put a strain on the business's finances and make it difficult to recover from any setbacks. Filing GST on time is one of the best ways to avoid financial difficulties for your business. By staying up-to-date with your filings, you can ensure that your business has a healthy cash flow and can avoid any penalties or interest charges.

Filing GST on time is important to maintain records

» Maintaining records can be difficult if GST is not filed on time
If businesses do not file their GST on time, they may find it difficult to keep track of their expenses and income. This can lead to problems when it comes time to prepare financial statements or file taxes. Filing GST on time can be difficult to maintain records. The main reason for this is that businesses are constantly changing their products and services, which can make it hard to keep track of what needs to be filed. GST can also be filed electronically, which can make it even more difficult to keep track of.

» Good record keeping is important for businesses
Maintaining accurate records is critical for any business, regardless of size. Good record keeping helps businesses keep track of their finances, measure their performance, and make sound decisions about future planning and growth.

Persons who are required to register for GST include:

  1. Any person who carries on business in India and has a turnover exceeding Rs. 20 lakhs per annum
  2. Any person who supplies goods or services interstate (across state borders)
  3. Any person who is engaged in e-commerce transactions
  4. Non-residents who supply goods or services in India
  5. Persons who are required to pay tax under the reverse charge mechanism
  6. Input service distributors
  7. Casual taxable persons
  8. Persons who are required to deduct tax at source (TDS) or collect tax at source (TCS)
  9. Persons who are registered under the previous laws

What documents are required to register for GST?

Basing the nature of the entities and business ownerships, an individual is required to submit a different set of documents to obtain GST registration.
Following documents are required to be submitted for sole proprietorships:
  • PAN Card of the applicant
  • Aadhar Card of the applicant
  • Passport Size Photograph
  • Address proof
  • Bank account details of the proprietor
Here is a list of documents that is to be submitted to obtain GST registration for a public or a Private Limited company:
  • PAN Card of the company
  • Incorporation certificate
  • PAN and Aadhar details of the authorized signatory. (Must be a citizen of India)
  • Passport Size photographs
  • MOA and articles of association
  • PAN Card of all directors
  • Address proof of the principal place of business
  • Bank account detail
Documents required for a partnership firm:
  • Id proof and address proof of all the directors
  • Copy of the Partnership deed
  • Bank account details
For a HUF the following documents are required:
  • PAN Card
  • Photograph of the owner
  • Address proof of the principal place of business
Filing GST on time is important for businesses for a variety of reasons. Avoiding penalties, improving cash flow and maintaining records are all important factors to consider. Businesses that don't file GST on time can face difficulties in all of these areas.
If you're running a business, make sure you file your GST on time to avoid any penalties or problems down the road.