If you run an accounting business with a low turnover, the goods, and services tax allows you to operate tax-free. But when you approach the registration threshold, it’s a good idea to start preparing your company to pay GST.
Start With Technology
Most of the GST system is online, where you can register for GST, file monthly returns, and even pay taxes using the GST portal. At a minimum, you need a computer and an internet connection. If you’re currently working on a slow connection, upgrading to a faster speed can save you a great deal of time each month. Laptops and desktop computers are both acceptable, as long as they’re fast enough to load websites and your accounting software.
Get the Right Software
If you’re not already working with accounting software, now is the time to invest in a quality product that allows you to manage your clients’ accounts and your company’s financials on the same platform. Since the GST is an internet-based system, choose a cloud-based system like QuickBooks. This makes it easy to record purchases and create invoices so you can have a clear idea of your tax liability each month. GST also requires that your tax records match those of your suppliers and customers. When everything is online, you don’t need to worry about hunting down old invoices or loose slips of paper.
Prepare Your Billing System
The GST regime has rules for invoices. When you’re billing your clients, your tax invoices must contain specific information to be GST-compliant. One option is to set up a new tax invoice in your accounting software so it’s ready to go after you register for GST. Keep in mind that you need different invoices for intrastate and interstate projects. Either way, you should prepare to charge your clients a total tax of 18% for your accounting services. If you have staff, you might also make a policy for invoice timing; GST law requires you to send a tax invoice within 30 days after you finish a job for a client.
Register for GST
Once your accounting firm has the software, hardware, and workflow in place, you’re ready to register for GST on the GST portal. To register, you need your company’s permanent account number, contact information, an Indian mobile phone number, and an email address. Once you complete the basic steps, the portal sends a one-time password (also called an OTP) to your phone or email. When you enter your OTP into the portal, you’ll get a temporary reference number, or a TRN, which allows you to log in and complete your GST application.
After the government processes your application, you’re granted a provisional GST identification number, which is commonly referred to as a GSTIN. This number identifies you when you file returns. After a period of time, your provisional GSTIN is converted to a permanent GSTIN.
Once you register for GST, the government expects you to file returns and comply with all GST rules. By preparing your company in advance, you can go into the process of feeling confident and ready.