Key points
- Register within 30 days of becoming liable.
- You can claim credit on stock in hand on the day you become liable, if you apply within 30 days and have invoices less than a year old.
- Decide between the composition scheme and regular GST before you start billing.
- Use proper tax invoices with your GSTIN, HSN codes and a serial number.
- Set up a simple monthly routine for returns, purchases and records.
1. Know when you must register
In most states, you must register once your turnover crosses ₹40 lakh if you supply only goods, or ₹20 lakh if you supply services. Lower limits apply in some north-eastern and hill states. Some businesses must register whatever their turnover, such as those making inter-state supplies of goods or selling through e-commerce platforms that collect tax at source. Apply within 30 days of becoming liable. See our GST registration guide.
2. Claim credit on stock you already have
Under Section 18(1)(a), when you become liable to register and apply within 30 days, you can claim input tax credit on inputs held in stock, including semi-finished and finished goods, on the day before you became liable. You need the purchase invoices, and they must not be more than one year old. File the declaration (form ITC-01) within the time allowed. This is credit many new registrants forget.
3. Choose composition or regular carefully
| Composition scheme | Regular GST | |
|---|---|---|
| Turnover limit | Up to ₹1.5 crore for goods (₹75 lakh in some states); ₹50 lakh for services | No limit |
| Tax | A small fixed percentage of turnover | Normal GST rates on each sale |
| Input tax credit | Not allowed | Allowed |
| Charge GST to customers | No (bill of supply) | Yes (tax invoice) |
| Inter-state sales of goods | Not allowed | Allowed |
| Returns | Quarterly payment (CMP-08) and yearly return (GSTR-4) | Monthly or quarterly GSTR-1 and GSTR-3B |
Composition suits small shops selling mainly to consumers. If you sell to registered businesses, they will prefer a supplier who charges GST so they can claim credit.
4. Issue proper tax invoices
Every tax invoice must show your GSTIN, a serial number unique for the year, the date, the customer’s details (and GSTIN if registered), HSN codes, quantities, values, the tax rate and amounts. Inter-state invoices also need the place of supply. See what an invoice must contain.
5. Get your HSN codes and rates right
The GST rate depends on the HSN code of each item. Set codes and rates for your items once, check them with your CA, and use them on every bill. Since September 2025, most items are at 5% or 18%. See our GST 2.0 guide.
6. Charge the right tax type
Sales within your state carry CGST and SGST; sales to other states carry IGST. The customer’s state, read from their GSTIN or address, decides which. Getting this wrong means reissuing bills.
7. Add your bank details and display your certificate
Add your bank account on the GST portal within 30 days of registration, or before your first GSTR-1. Display your registration certificate at each place of business and show your GSTIN on your name board.
8. Set a monthly return routine
- By the 11th GSTR-1 with your sales (or quarterly by the 13th under QRMP).
- By the 14th Check your GSTR-2B for supplier bills.
- By the 20th GSTR-3B with tax paid (or the 22nd or 24th after the quarter under QRMP).
See our GST due dates guide.
9. Protect your input tax credit
Enter purchase bills promptly, check that suppliers have reported them in your GSTR-2B, and pay suppliers within 180 days. Read our input tax credit guide.
10. Keep records for at least six years
GST records must be kept for 72 months from the due date of the annual return for that year. Keep invoices, purchase bills, stock records and returns in an organised way, ideally in software that keeps an audit trail.
Common first-year mistakes
| Mistake | How to avoid it |
|---|---|
| Missing the 30-day window for credit on stock | Apply for registration and file the stock declaration on time. |
| Charging IGST on local sales (or the other way round) | Let your billing software decide the tax type from the customer’s state. |
| Not reporting registered customers’ GSTINs | Save each customer’s GSTIN so their bills go into the B2B part of GSTR-1. |
| Filing nil returns late | Even with no sales, returns must be filed on time to avoid late fees. |
| Forgetting e-way bills | Generate an e-way bill whenever goods worth more than ₹50,000 move. |
| Claiming credit on everything | Check GSTR-2B and the blocked credit list before claiming. |
Not sure where to start? Many businesses begin with simple GST billing software, then add stock and accounts. Milaan ERP’s team helps new registrants set up items, HSN codes and invoices in the first week.
This guide explains GST rules in simple words and reflects the law as we understand it on 28 October 2026. Rules, rates and dates change, so please confirm with your CA or the official notifications before acting on it.