Many small and medium-sized businesses face challenges during GST compliance processes. Manual data entry, return filing, and understanding the frequently changing GST laws can lead to errors and delays. As a small manufacturing business has limited resources, keeping up with changing regulations and reconciling invoices for the ITC (Input Tax Credit) can be tough.
GST compliance software like TranZact can help you with these issues by letting you automate all the processes. In this blog post, we are providing a handy guide to simplify GST compliance.
Understanding GST Compliance Requirements
GST (Goods and Service Tax) is a compulsory and destination-based tax applied to people. Since the GST launched on 1st July 2017, it has helped in unifying India into a single market with constant taxes. For Indian manufacturing businesses, the GST registration process must be done based on the annual turnover. Paying your GST on time helps you avoid penalties and boosts your manufacturing business credibility.
However, small and medium-sized businesses have difficulties maintaining compliance with GST format. To follow the regulations associated with GST filing, you need extensive tax knowledge, experience, and the help of technology. You should understand the benefits of GST software, which is a completely paperless and data-intensive process. GST software also helps you stay updated with insights and regulatory changes so that you can file your tax returns on time.
Explanation Of The GST Compliance Process
If your manufacturing company is liable to file annual GST returns, then maintaining all the records of transactions made in your business is important. The records include details like sales, purchases, and inventory. Here is a complete GST compliance process that will simplify your tax filing with no delays.
1. Having A GST Registration
If your business manufactures and sells products and your turnover is 40 lakhs/annum or over, you must register for GST. It will let you get a GSTIN (GST Identification Number), which is important for legal collection and remission of GST.
2. Claiming ITC (Income Tax Credit)
GST council provides a big advantage to manufacturers in India who file and pay their taxes regularly and on time. You can claim ITC for the taxes you paid on raw materials, inputs, and capital goods used in your manufacturing processes. However, to claim ITC, you have to make sure your suppliers have also filed their GST returns on time.
3. Accurate GST Invoicing
Another aspect of GST filing is proper invoicing. You must complete your GST invoice accurately, which includes details like GSTIN, HSN code, and amount of GST being paid. It lets you improve your credibility in the market and claim tax input benefits.
4. Timely GST Returns
You must file all the returns, such as GSTR-1, GSTR-3B, and GSTR10, on a regular basis. Accurate and consistent tax filing helps you prevent any legal penalties or issues and improves your tax reporting.
5. E-Way Bill (Electronic WayBill)
If your turnover is above certain threshold, an e-way bill is compulsory for your manufacturing business. You have to generate an e-way bill or application on the official GST portal before transporting your goods. This bill includes information like consignor, consignee, vehicle no., and details of consignment.
6. Following Anti-Profiteering
According to the government-issued anti-profiteering rules, the benefits of GST are passed on to consumers only. The rules mention that you carefully analyze your pricing structures. You also have to make sure any reduction in tax rates or ITC is stated on your product’s price.
7. Thorough GST Audits
If you are a product manufacturer with turnover exceeding the specified threshold, your business must support GST audits. A qualified CA (Chartered Accountant or Cost Accountant) conducts audits on your financial statements and records. These audits make sure your business complies with GST regulations.
Common Challenges Faced By Businesses For Ensuring GST Compliance
According to a survey report by LocalCircles, 37% of manufacturers stated that they spent more time on their GST compliance vs pre-GST taxation. Here are a few common challenges that make it difficult for manufacturers to comply with GST regulations.
- Submission Of Incorrect GST Information: If information detailing GSTR-1 or GSTR3B is filled incorrectly, it can’t be revised later. This mistake can’t be rectified after the due date of filing the return till the next financial year’s September.
- Human Or Manual Errors: Without any proper software tool to take care of your GST filing, you might face manual errors. These errors mostly happen during data entry and tax calculations and increase the risk of penalties and legal actions against your business.
- Time-Consuming Processes: If you prepare and file your GST returns yourself, they can take a long time and effort to complete. If you want to make the process easier, you have to get help from a qualified CA or a reliable cloud based GST accounting software.
- Difficulty With Reconciliation: Doing your GST filing process on your own can lead to mistakes while matching your purchase and sales invoices. This mistake can affect your GST reconciliation and your ITC claims.
- Changes In GST Regulations: Keeping up with frequently changing GST rules and regulations can be difficult. If you miss any updates on GST rules and rates, it can affect your market credibility and cause penalties.
The Role Of GST Accounting Software In GST Compliance
GST accounting software is very important for your business, as it helps you automate your compliance processes. It lets you automate all the processes, reduces the chances of errors, and helps in timely GST filings. GST invoicing software helps you with return preparations and reconciliations. It also provides you with frequent updates on regulatory changes to make sure you comply with the latest rules and rates.
Introduction To TranZact: GST Compliance Software
TranZact is an effective GST compliance software specially designed for small and medium-sized Indian manufacturers. It helps you automate all your GST filing related documents while reducing any chance of errors. TranZact offers the easiest user interface and improves invoicing, reports, audits, reconciliations, and other processes.
Key Features To Look For In GST Compliance Software
GST compliance software is considered effective if it has certain features that ease your tax filing processes. From automation to faster processing of data and security, consider the following key features before investing in a GST compliance tool:
- Automated Invoice Generations: An effective GST compliance software must let you automate your e-invoice generation while creating and sending invoices as per the taxation policies.
- Simplified Return Filing: GST accounting software must simplify GST compliance processes with a user-friendly interface and easily generate GST-ready invoices.
- Improved Reconciliations: The software should be able to track all the taxes paid on goods and services. It should have cloud-based systems to let you make necessary changes at any time.
- Reminders On Tax Payments: The GST software should notify you about upcoming tax payments in advance to let you avoid any penalties. It should also be able to notify you about new regulatory updates to keep your taxation rates and rules in check.
- Integrations Capabilities:** The GST software should be able to integrate with your existing ERP systems to boost easy and faster data transfers.
Importance Of GST Filing Software In Automating The Compliance Process
GST filing software helps you automate your regulatory compliance processes while keeping you updated with the latest changes. It also helps you minimize manual interventions and decreases the chances of human error. If you run a manufacturing business, you have to take care of operations such as purchase, production, planning, and delivery of products. If you use GST filing software, it lets you focus on core operations easily.
Benefits Of Using TranZact GST Software For Simplifying Compliance
TranZact is a cloud based GST software that is capable of supporting Indian SME businesses in GST compliance. It centralizes all your business transactions on a connected platform and provides ready-to-use GST-compliant invoices. It saves your precious time as well as costs in your business. Have a look at benefits of GST software with TranZact in your manufacturing business:
- Inventory Management: TranZact offers a built-in inventory management system. This system provides you with real-time stock-level reports, sales trend information, and supplier orders.
- Data Tracking: TranZact lets you easily track every product-related entry, transaction, and GST filing. It also allows you to create GST reports in no time.
- Reduction Of Errors: TranZact doesn’t leave any chances of errors during GST calculations, filing, returns, or any other processes.
- Easy Interface: TranZact offers an easy and user-friendly interface that lets you navigate through the features and automate your GST filing operations.
TranZact Vs. Traditional Manual Methods Of GST Compliance.
If you are manually taking care of your GST returns and reconciliations, you will face several challenges in filing them on time. Complying with GST rules and rates can become easy with TranZact GST compliance software. So, here’s a comparison between TranZact and manual methods for all the GST processes: TranZact GST Compliance:
- Provides automated and accurate invoice processing.
- Is extremely time-efficient.
- Reduces chances of manual errors.
Manual Methods For GST Compliance:
- Can lead to errors during data entries and filing GST returns.
- Is a time-consuming process.
- Makes it difficult for you to stay updated with regulatory changes.
Steps To Implement TranZact For GST Compliance
Implementing TranZact into your manufacturing business can benefit you by improving your time management and credibility. Follow these mentioned steps to implement TranZact GST compliance software into your business:
Step 1- Check your GST compliance needs and requirements.
Step 2- Choose the right pricing plan for your business.
Step 3- Integrate TranZact with your existing ERP systems.
Step 4- Start using TranZact GST compliance software for all your documentation.
Step 5- Train your staff on how to use the tool effectively.
Step 6- Monitor your systems regularly and make necessary changes depending on regulatory updates.
Simplify Your GST Compliance Processes With TranZact
Having an effective and faster GST filing and return process is compulsory for every manufacturing business in India. Whether you are a small or medium-sized company exceeding a certain threshold of GST compliance demands, you must have effective GST invoice software. TranZact is one of the best GST accounting software that helps you automate all your tax-paying processes.
Free up your valuable resources and upgrade to TranZact to simplify GST compliance and focus on your business’s growth.
FAQs
1. What is TranZact and how does it simplify GST compliance?
TranZact is a reliable GST compliance software that lets you automate invoice generation, return filing, and reconciliations while reducing the chances of human errors.
2. Why is GST compliance important?
GST compliance is important for your manufacturing business because it helps you avoid legal issues. It lets you smoothen your business operations, maintain good standing with tax authorities, and avoid any penalties.
3. What is the limit of GST compliance?
The minimum limit for GST compliance for a manufacturing business is an annual turnover of Rs. 40 lakhs. If you exceed this threshold, then your business is subject to all the GST compliance rules.
4. Can TranZact be integrated with my existing ERP software?
Yes, TranZact can be integrated into most of the existing ERP software in the market, such as Tally, BusyERP.
5. How does TranZact handle GST reconciliation?
TranZact GST software tool automates your reconciliation by matching your purchase and sales invoices to help you claim ITCs easily.
6. What are the key features of TranZact's GST compliance software?
The key features of TranZact GST compliance software are automated invoice generation, return filing, ITC reconciliation, and frequent tax payment reminders. It also provides you with regular updates on regulatory changes in rules and GST Slabs.
7. How can I get started with TranZact for GST compliance?
You can get started with TranZact by signing up for the services online or contacting us at +91-8355900514 or contactus@letstranzact.com.
