GST Compliance Checklist for Startups

July 31, 2025 by Team Instabizfilings

The entry into the Indian business entails a variety of regulatory functions, with one of the most important being related to Goods and Services Tax (GST). Without compliance with the norms of GST, one may face a fine, suspension of the business, or cancellation of GST registration.

Here is your complete GST start up compliance checklist which will ensure that you are on the right side of the law, ensuring that you run your business without any hassles of GST.

What is GST Compliance?

GST compliance refers to adhering to all the provisions under the GST law — including registration, timely return filing, accurate invoicing, tax payments, and proper record-keeping.

For startups, maintaining GST compliance from the beginning not only builds trust but also ensures smooth operations without any legal complications.

GST Compliance Checklist for Startups

1. GST Registration

Threshold Limit: You need to register GST when you have a turnover of more than 40 lakhs a year (20 lakhs a year, in case of a service; 10 lakhs in a special category state).
Voluntary Registration: Such startups can also apply voluntary registration, although they do not have to be above the threshold, to obtain the Input Tax Credit (ITC) and be able to conduct business with registered clients.
Register on GST Portal: www.gst.gov.in

2. Proper Invoicing

Pay GST-stamped invoices with:

Invoice no. & Date
Supplier GSTIN & recipient GSTIN
Placement of supply
HSN/SAC code
Tax rate & amount

E-invoicing can be used in cases of turnover more than prescribed limits (presently 5 crore and more).

3. Input Tax Credit (ITC) Management

Claim ITC only on goods /services utilised in the conduct of business.
Comparing ITC with GSTR-2B every month without any errors in it.
Record blocked credits for Section 17(5) of the CGST Act.

4. Timely GST Return Filing

According to the form of registration, file:

GSTR-1: Monthly/Quarterly supplies to be made out
GSTR -3B: Tax bottom line ITC
GSTR-9: Annual Return (in case the turnover exceeds 2 crores)
CMP-08: Composition dealers (quarterly)
By keeping to deadlines, one can also avoid late fees and interests.

5. Payment of GST

Use the GST portal and pay the GST tax in time.
Late payment interest to be avoided (18 per cent per annum).
Keep enough cash/credit in your e ledger.

6. E-Way Bill Compliance

issue e way bills in the transportation of goods with a value exceeding 50,000 rupees.
Use the official portal: ewaybill.nic.in

7. Maintain Proper Records

Keep the records 6 years after the due date of the annual return.
Maintain:

Purchase/sales register
ITC ledger
Records on tax paying
E-way bills
Vendor/clients communication

8. GST Audit & GST Reconciliation

Rebalance hourly, monthly and yearly:

GSTR- 1 Vs GSTR- 3B
Accounting books as compared to GST returns

The business has to do an audit as long as turnover reaches 5 crores (subject to update).

9. Reverse Charge Mechanism (RCM)

List of the services/ goods that attract RCM e.g., legal services, unregistered goods.
Invoice and pay tax to the government under a self-invoice basis mode.

10. Stay Updated with GST Law Changes

Rules and rates of GST vary often.
Sign up and receive GST notifications and meet a GST expert or CA regularly.

Disclaimer

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