Is E-Invoicing Mandatory for Your Business?

E-invoicing is now mandatory for businesses with annual turnover above ₹5 crore. Every B2B invoice must be registered on the Invoice Registration Portal (IRP).

What is GSTR-3B and when is it due?

GSTR-3B is a monthly self-declared summary GST return. For regular taxpayers, it is due by the 20th of the following month. Late filing attracts ₹50/day late fee (₹25 CGST + ₹25 SGST), capped at ₹5,000.

How do I reply to a DRC-01 GST notice?

DRC-01 is a show-cause notice for tax demand. Log in to GST portal, go to Services > User Services > View Additional Notices, select the notice and file a reply within 30 days — either agreeing and paying, or disputing with supporting documents.

What is the late fee for filing GSTR-1 late?

Late fee for GSTR-1 is ₹50/day (₹25 CGST + ₹25 SGST). For nil returns it is ₹20/day. Maximum cap is ₹10,000 per return. GSTR-1 is due by the 11th of each month for monthly filers.

Can I claim ITC on hotel and restaurant bills?

ITC on restaurant food and beverages is blocked under Section 17(5) CGST Act — not claimable. However, ITC on hotel accommodation is allowed if used for business purposes and the hotel provides a GST invoice with your GSTIN.

What is the GST registration threshold in India?

GST registration is mandatory if annual aggregate turnover exceeds ₹40 lakhs for goods (₹20 lakhs for special category states) or ₹20 lakhs for services (₹10 lakhs for special category states). E-commerce sellers must register regardless of turnover.

GST for Small Businesses in India: Complete Compliance Guide (FY 2025-26)

sai krishna
Apr 28
2 min read

If you run a business in India, GST compliance is not optional — it is the law. But navigating GST doesn't have to be overwhelming. This guide covers everything a small or medium business needs to know to stay compliant in FY 2025-26, without the jargon.

Do You Need to Register for GST?

GST registration is mandatory once your annual aggregate turnover crosses the threshold. Failing to register when required can result in heavy penalties.

Goods suppliers: ₹40 lakhs (₹20 lakhs in special category states like Manipur, Mizoram, Nagaland)
Service providers: ₹20 lakhs (₹10 lakhs in special category states)
E-commerce sellers: Mandatory regardless of turnover
Inter-state suppliers of goods or services: Mandatory regardless of turnover

Which GST Returns Must Your Business File?

Most regular taxpayers must file three core returns every month or quarter:

GSTR-1: Statement of all sales invoices. Due by 11th of the following month for monthly filers.
GSTR-3B: Summary return showing net tax payable after ITC. Due by 20th of the following month.
GSTR-9: Annual return for the full financial year. Due by December 31 each year.

Understanding Input Tax Credit (ITC) for Businesses

ITC is the mechanism that prevents the cascading effect of taxes. As a GST-registered business, you can claim credit for GST paid on your purchases and reduce your output tax liability. However, ITC comes with strict conditions:

The invoice must appear in your GSTR-2B (auto-drafted ITC statement released on the 14th)
You must hold a valid tax invoice with supplier's GSTIN
The goods/services must have been received
ITC on restaurant bills, employee insurance, and personal use is blocked under Section 17(5)

E-Invoicing: Is It Mandatory for Your Business?

E-invoicing is now mandatory for businesses with annual turnover above ₹5 crore. Under this system, every B2B invoice must be registered on the Invoice Registration Portal (IRP) before it is sent to the buyer. The IRP assigns a unique Invoice Reference Number (IRN) and QR code. Invoices without IRN cannot be used to claim ITC by your buyers.

The 5 Most Costly GST Mistakes Small Businesses Make

Filing GSTR-3B without reconciling GSTR-2B first — leads to excess ITC claims and demand notices
Missing GSTR-1 deadlines — blocks your buyers from claiming ITC on your invoices
Claiming ITC on blocked items like food, employee personal expenses, and club memberships
Not paying Reverse Charge Mechanism (RCM) tax when buying from unregistered vendors
Ignoring GST notices — an unanswered DRC-01 notice becomes an automatic tax demand

Your Monthly GST Compliance Checklist

By 11th: File GSTR-1 with all sales invoices for the previous month
By 14th: Download GSTR-2B and reconcile with your purchase register
By 20th: File GSTR-3B with correct ITC claim and pay any net tax liability
Monthly: Check GST portal for any new notices under Services → User Services → View Notices
Monthly: Verify your GSTIN is active under 'Search Taxpayer' on the GST portal

Use GSTvala's free AI assistant to get instant, CBIC-referenced answers to any GST question — no CA required, no paywall, ever.