GST Filing for Small Businesses: Your Easy Guide

For small businesses, dealing with Goods and Services Tax (GST) can be complicated. There are different types of forms to fill out, and you have to make sure to submit them on time.

 

But here’s the thing: GST compliance isn’t just a legal rule; it’s super important for making your business look trustworthy and professional.  When you’re good with your GST, it’s easier to get loans and find new business opportunities.
At Credit Saison India, we know that good financial habits, like filing your taxes correctly, are key to your success.
That’s why we offer Business Loans to help small businesses like yours, so you can focus on what you do best.

 

This guide will break down GST filing into simple, step-by-step instructions.
Whether you’re just starting out or you’ve been in business for a while, understanding your GST duties and how to do them easily is vital.  We’ll walk you through everything, from getting your paperwork ready to hitting that ‘file’ button on the GST website.
As your financial partner, Credit Saison India also offers quick and easy Small Business Loans, because we know that organized finances are the backbone of a healthy business. Let’s make GST filing simple together!

 

What is GST and Why Does It Matter for Small Businesses?

Goods and Services Tax (GST) is a tax applied to most goods and services in India.
It started in 2017 and replaced many old taxes (like VAT and Service Tax) with one single tax system.
The main goal was to create one big market across India, make taxes simpler, and reduce the burden on businesses.

 

Why is GST Important for Small Businesses?

• Simpler Taxes: Instead of dealing with many different taxes, small businesses now have just one. This makes it much easier to understand and manage.
• No “Tax on Tax”: Before GST, you often paid tax on something that was already taxed. GST stops this, which means goods can be cheaper for customers, and your business can be more competitive.
• More Transparent: Since GST filing is mostly digital, it’s clearer and harder to avoid taxes, making the business environment more honest.
• Get Money Back (Input Tax Credit – ITC): If your business is GST-registered, you can get a credit for the GST you paid on your purchases (like raw materials or services you bought). This greatly reduces the actual tax you have to pay, as you only pay the difference between the GST you collected and the GST you paid.
• Looks Good for Your Business: Being GST-compliant shows that your business is legitimate and well-organized. This can improve your reputation with suppliers, customers, and, most importantly, lenders. Many lenders, including Credit Saison India, see consistent and correct tax filings as a big plus for a business’s health.
• Reach More Customers: With GST, it’s easier to sell your goods and services across different states without getting hit by state-specific taxes.

 

Who Needs to Register for GST?

Not every small business needs to register for GST right away.
It usually depends on how much money your business makes in a year (your aggregate annual turnover).

• For Goods: If your business mainly sells goods, you need to register for GST if your total sales in a financial year go over ₹40 lakhs. In some special states, this limit is ₹20 lakhs.
• For Services: If your business mainly provides services, you need to register for GST if your total sales in a financial year go over ₹20 lakhs. In some special states, this limit is ₹10 lakhs.

You MUST register for GST even if your sales are below these limits if:

• You sell goods from one state to another (inter-state supply of goods).
• You sell goods or services through an e-commerce website (like Amazon or Flipkart).
• You are a “casual taxable person” or a “non-resident taxable person” (these are specific legal terms).
• You are an Input Service Distributor (ISD).
• You are required to pay tax under the Reverse Charge Mechanism (RCM).
• You are an agent of a supplier.

It’s really important to keep an eye on your sales and understand these rules so you can register on time and avoid penalties.

 

Types of GST Returns for Small Businesses

For most small businesses, the main GST forms you’ll deal with are GSTR-1 and GSTR-3B.
If your business is under the Composition Scheme, your filing is simpler with GSTR-4.

GSTR-1 (Your Sales Details)

This form lists all your sales (outward supplies) of goods and services during the tax period.

• It includes sales to other businesses (B2B), sales to regular customers (B2C), exports, and tax-exempt sales.

How Often to File:

• Monthly: If your yearly sales are more than ₹5 crores.
• Quarterly: If your yearly sales are up to ₹5 crores (this is called the QRMP scheme).

Due Date: Usually, the 11th of the next month (for monthly filers) or the 13th of the month after the quarter (for quarterly filers).

 

GSTR-3B (Summary of Sales and Tax Paid)

This is a summary where you declare your total sales, the Input Tax Credit (ITC) you’re claiming, and the tax you owe.
This is where you actually pay your tax bill.

How Often to File: Monthly for all taxpayers, no matter their sales. (Even if you’re on the QRMP scheme, you still pay your tax monthly and file GSTR-3B monthly).

Due Date: Usually, the 20th of the next month (for sales over ₹5 Cr) or the 20th/22nd/24th of the next month depending on your state (for sales ₹5 Cr or less).

 

GSTR-4 (For Composition Scheme Businesses)

This is for small businesses that have chosen the GST Composition Scheme (yearly sales up to ₹1.5 crores, or ₹75 lakhs in special states).
These businesses pay a small, fixed percentage of their sales as tax and have simpler rules.

How Often to File: Annually.

Due Date: April 30th of the next financial year.

They also need to file a GSTR-4 CMP-08 quarterly statement just for tax payment.

This guide will mostly focus on GSTR-1 and GSTR-3B, as these are the most common forms for growing small businesses.

 

Step-by-Step Guide to GST Filing (GSTR-1 & GSTR-3B)

Filing your GST returns can be smooth if you follow these steps carefully.

 

Step 1: Get Your Documents Ready

Before you even log in to the GST website, make sure you have all the necessary information and documents organized.
This will save you a lot of time and help you avoid mistakes.

• Sales Invoices (What you sold):
  • Details of all bills you issued for goods/services sold (to businesses or to regular customers).
  • GSTIN (GST Identification Number) of your buyers (if you sold to other registered businesses).
  • Invoice numbers, dates, how much the goods/services were worth, and the GST rates applied.
  • Details of any credit notes or debit notes (for returns or adjustments).
  • HSN/SAC codes (specific codes for goods/services) for what you sold.
• Purchase Invoices (What you bought for your business):
  • Details of all bills for purchases where you paid GST.
  • GSTIN of your suppliers.
  • Invoice numbers, dates, how much the goods/services were worth, and the GST rates.
  • These are crucial for claiming your Input Tax Credit (ITC)!
• Bank Statements: Useful for checking money coming in and going out, especially for cash sales or advances received.
• Payment Challan Details: If you made any GST payments in advance.

Organizing these documents, maybe in a spreadsheet or using accounting software, will make it much easier to enter the data into the GST portal.

 

Step 2: Log In to the GST Portal

• Go to the official GST website: www.gst.gov.in
• Enter your GSTIN (your unique GST number).
• Enter your Username and Password.
• Type in the CAPTCHA code you see and click “Login.”
• Once logged in, go to the “Services” tab → “Returns” → “Returns Dashboard.”
• Pick the financial year and the month/quarter you want to file for.

 

Step 3: Prepare GSTR-1 (Your Sales Details)

GSTR-1 is where you tell the government about all the sales you made during the tax period.

• Select Period: On the Returns Dashboard, choose the “Financial Year” and “Return Filing Period” (e.g., June 2024 or Apr-Jun 2024).
• Prepare Online/Offline: Enter your sales details directly online or download an Excel file, fill it out, and upload it. For small businesses with fewer sales, online is simpler.
• Enter Details in the Right Tables:
  • 4A, 4B, 4C, 6B, 6C – B2B Invoices: Details of sales to other registered businesses (need their GSTIN).
  • 5A, 5B – B2C (Large) Invoices: Individual sales above ₹2.5 lakhs (if sold to customers in other states).
  • 7 – B2C (Others): Combined details of all other sales to regular customers (within state & inter-state below ₹2.5 lakhs).
  • 8 – Nil-rated, Exempted, and Non-GST Outward Supplies.
  • 9B – Credit/Debit Notes (Registered): Details of any credit/debit notes issued to registered businesses.
  • 11A – Advances Received/Adjusted: Details of any advance money for future sales.
  • 12 – HSN-wise Summary of Outward Supplies: Mandatory if sales are above ₹5 crores (6-digit HSN) or between ₹1.5 Cr and 5 Cr (4-digit for B2B).

Generate GSTR-1 Summary: After entering everything, click “Generate GSTR-1 Summary” and review it carefully.

Submit GSTR-1: Click “Submit” to lock data (cannot edit later).

File GSTR-1: File using EVC (OTP) or DSC (Digital Signature).

 

Step 4: Prepare GSTR-3B (Summary of Sales & ITC)

GSTR-3B is your monthly summary return where you report tax liability and claim ITC.
This is also where you make your tax payment.

• Check Auto-Drafted GSTR-2B: Shows all ITC you can claim based on suppliers’ filings. Compare with your purchase invoices.
• Select Period: From the Returns Dashboard, pick the right month.
• Prepare Online: GSTR-3B is filled online only.
• Answer Questions: GST portal asks questions to customize GSTR-3B form (e.g., tax-exempt sales, ITC claims).
• Fill in Details in Tables:
  • 3.1 – Tax on outward and reverse charge inward supplies.
  • 3.2 – Outward inter-state supplies to unregistered persons.
  • 4 – Eligible ITC.
  • 5 – Exempt, Nil-rated & Non-GST outward supplies.
  • 6 – Payment of Tax: Tax after ITC usage.

Save and Proceed to Payment: Click “Save GSTR-3B” → System calculates tax payable.

Offset Liabilities: Use ITC balance to pay tax; pay remaining via cash if required.

 

Step 5: Pay Your GST Liability (if you owe tax)

• Create Challan: On payment page, click “Create Challan.”
• Select Payment Method: Choose Net Banking, Credit/Debit Card, OTC (cash/cheque), or NEFT/RTGS.
• Generate Challan: Payment slip (PMT-06) is created. Make payment (may take time to reflect).

 

Step 6: File the Return

• Proceed to File: Go to GSTR-3B page and click “Proceed to File.”
• Verify: Select authorized signatory.
• File GSTR-3B: Use EVC (OTP) or DSC. After filing, you’ll get an ARN (Acknowledgement Reference Number).

 

GST Filing for Composition Scheme (GSTR-4)

For small businesses that chose the Composition Scheme, GST rules are much simpler.

• Quarterly Statement (CMP-08):You need to file a statement called Form GST CMP-08 every three months.
  This is due by the 18th of the month after the quarter ends.
  Here, you declare your sales and pay a small, fixed percentage of tax (e.g., 1% for manufacturers/traders, 5% for restaurants, 6% for service providers).
• Annual Return (GSTR-4):You also need to file an annual return called Form GSTR-4 by April 30th of the next financial year.
  This is a summary of your quarterly statements and other details for the whole year.

The Composition Scheme is great for very small businesses that don’t do much business with other GST-registered businesses,
because they can’t claim ITC, and their customers also can’t claim ITC on the goods/services they buy from them.

 

What Happens if You Don’t File on Time?

Missing GST deadlines or not following the rules can lead to big problems and costs for your business:

• Late Fees:
  • GSTR-1 & GSTR-3B: ₹50 per day (₹25 CGST + ₹25 SGST) if taxable sales, up to ₹5,000 max.  For NIL returns, ₹20 per day (₹10 CGST + ₹10 SGST), up to ₹500.
  • GSTR-4: ₹50 per day, up to ₹500 for NIL returns and ₹2,000 for others.
• Interest: 18% per year on unpaid tax from due date until payment.
• Lose Input Tax Credit (ITC): Customers can’t claim ITC if you don’t file GSTR-1; you can’t claim ITC if you miss GSTR-3B.
• Business Problems: Non-compliance can stop you from generating e-way bills, halting deliveries.
• Legal Action: Continued non-compliance can trigger notices, audits, or GST registration cancellation.
• Lower Business Trust: Hurts reputation with suppliers, customers, and lenders who check tax filings before approving loans.

 

Tips for Easy GST Filing

• Keep Good Records: Use accounting software (Tally, Zoho Books, QuickBooks) or organized spreadsheets for daily sales, purchases, and expenses.
• Check GSTR-2A/2B Often: Compare with your invoices to claim full ITC and fix mismatches early.
• Automate When You Can: Many tools sync directly with GST portal for easy uploads.
• Understand HSN/SAC Codes: Use correct codes for goods (HSN) and services (SAC).
• Stay Updated: GST rules evolve; check GST Council updates or consult a professional.
• Hire a Professional: For complex transactions or high sales, get help from a CA or GST expert to avoid penalties.
• File Even NIL Returns: Always file NIL returns to avoid late fees even when there are no transactions.

 

How Credit Saison India Supports Small Businesses

At Credit Saison India, we believe that good financial management is the base for business growth.
We help small businesses by offering quick and flexible access to money, knowing that running your business smoothly and growing it often needs outside funding.

Our Small Business Loans are designed for entrepreneurs with fast payouts, minimal paperwork, and competitive rates.
Staying GST-compliant boosts your creditworthiness, helping you secure funds for daily operations, expansions, or tech upgrades.
We’re here to simplify financial access for growth-focused businesses.

 

Conclusion

GST filing might seem tricky, but for small businesses, it’s essential for financial health and growth.
By understanding basics, preparing documents carefully, and following a step-by-step process, you can turn this complex task into a manageable routine.

Filing correctly and on time keeps you compliant and boosts trust with suppliers, lenders, and customers.
It also helps secure financial aid, like loans, that fuel business growth.
See GST filing as a chance to build a stronger, transparent, and financially sound business.

Ready to simplify your finances and explore funding options?
Connect with Credit Saison India today!

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