GST Setup Checklist for a New Business: Registration, Invoicing and Returns

1. Check Whether GST Registration Is Required

Turnover is only the starting point. Registration also depends on the supply type, state, interstate activity, e-commerce model and whether a compulsory-registration provision or exemption applies.

Check the Applicable Threshold

Under Section 2(6) of the CGST Act, aggregate turnover is calculated across India for all businesses operating under the same PAN. It generally includes taxable supplies, exempt supplies, exports and interstate supplies. GST, compensation cess and inward supplies taxable under reverse charge are excluded.

One PAN means one threshold test. A proprietor running a shop and a separate online trade name under the same PAN cannot test the threshold separately. Their relevant turnover is combined.

Interstate supplies, e-commerce sales, temporary taxable activity in another state, agency transactions, reverse-charge liabilities , TDS, TCS, or Input Service Distributor responsibilities may change the result.

Eligible interstate service suppliers can use the normal threshold exemption under Notification No. 10/2017-Integrated Tax. Notification No. 34/2023-Central Tax also permits eligible unregistered sellers of goods to make specified intrastate supplies through an e-commerce operator, subject to turnover, state, enrolment and other conditions.

Voluntary registration may help when B2B customers expect tax invoices and ITC or when future supplies are likely to make registration compulsory. It should not be taken only because a GSTIN appears more professional, as compliance obligations begin from the effective date.

Notification No. 14/2019-Central Tax sets the general composition threshold at ₹1.5 crore. The limit is ₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. Eligible service or mixed suppliers may use the separate 6% scheme where preceding-year turnover is up to ₹50 lakh, subject to Section 10(2A).

Composition is not automatically better because it involves fewer forms. A business selling mainly to registered customers may prefer the regular scheme because customers expect tax invoices and ITC. A local retailer selling mainly to consumers may find composition more practical if all conditions are met.

Rule 14A Is Not a Tax Scheme

Notification No. 18/2025-Central Tax introduced Rule 14A from 1 November 2025. It provides an optional simplified registration route for an eligible applicant whose monthly output tax liability on supplies to registered persons does not exceed ₹2.5 lakh.

The amount is a tax-liability limit, not a turnover limit. The business must still separately choose between the regular and composition schemes.

3. Complete the GST Registration Setup

The usual application documents include PAN, Aadhaar, photographs, constitution proof, premises documents, authorised-signatory proof, a Digital Signature Certificate where compulsory, and details of the main goods or services. Names and addresses should match across PAN, business and premises records.

The application is filed in Form GST REG-01. Complete Part A, use the Temporary Reference Number for Part B, upload clear documents and complete the required verification. Save the Application Reference Number and respond to any clarification notice within the stated time.

If the application is filed within 30 days of becoming liable, registration may take effect from the date of liability. If filed later, the effective date is generally the date on which registration is granted. After approval:

• Verify the legal name, trade name, constitution, state, address, and effective date in Form GST REG-06.
• Identify the first tax period for which returns are required.
• Furnish bank details within 30 days of registration or before filing GSTR-1 or using IFF, whichever is earlier, as required by Rule 10A.
• Display the certificate and GSTIN at the relevant business premises.
• Update invoices, contracts and customer or supplier records.
• Restrict portal and filing access to authorised users.

GST law does not universally require every registrant to open a current account. It requires the prescribed bank details. A dedicated business account is still useful for reconciliation.

Note: The certificate date and effective date may differ. Where registration is granted from an earlier date, revised invoices for the covered period must be issued within one month from the certificate date.

4. Configure Accounting Masters and Controls

A GSTIN does not make the books GST-ready. The accounting setup controls how tax is calculated and reported.

Create a separate party master for each GSTIN, even when two registrations belong to the same organisation. Mixing them can send an invoice to the wrong GSTIN, state or return record.

Before live billing, test a local B2B sale, a local B2C sale, an interstate sale, a purchase with potentially eligible ITC and a credit note. Check the printed document, ledger posting, tax split and return preview. Correct the master instead of editing invoices one by one.

5. Record Opening Stock and Balances

A new registration may begin with goods already held in stock. Record opening stock item-wise with quantity, purchase invoice, supplier GSTIN, taxable value, tax charged, stock type and proposed ITC treatment.

Section 18 permits ITC on specified inputs held in stock and inputs contained in semi-finished or finished goods in defined registration or scheme-change situations. The credit is not automatic. Check the registration situation, invoice age, supporting documents, blocked-credit rules and whether Form GST ITC-01 must be filed.

Record debtors, creditors, advances, cash and bank balances separately so that each opening figure can be traced to supporting records.

6. Complete the GST Invoice Setup

Finish the GST invoice setup before issuing the first taxable invoice. An incorrect master can repeat the same error across billing, ledgers, and returns.

A regular taxpayer generally issues a tax invoice for taxable supplies. A composition taxpayer or a registered person making wholly exempt supplies generally issues a bill of supply. Debit notes, credit notes , receipt vouchers and delivery challans should be used only for the transactions covered by the relevant provisions. A delivery challan is not a general substitute for a tax invoice.

Under Rule 46, the invoice number must be consecutive, unique for the financial year and no longer than 16 characters. It may use letters, numbers, a hyphen or a slash in one or more controlled series.

A tax invoice generally includes supplier and recipient details, GSTINs, invoice number and date, HSN or SAC, description, quantity, taxable value, GST rate and amount, place of supply where required, tax split and reverse-charge indication where applicable.

Verify Classification and Place of Supply

Do not assign a GST rate only because a similar product uses it. Composition, use, packaging, value limits and notification wording can change the classification.

Notification No. 78/2020-Central Tax generally requires six-digit HSN reporting where preceding-year aggregate turnover exceeds ₹5 crore and four-digit reporting for B2B invoices where turnover is up to ₹5 crore. The lower-turnover category has a specified relaxation for B2C invoices.

Billing address does not decide every place-of-supply case. Bill-to and ship-to transactions , services, installation supplies, immovable-property services and events may follow different rules.

E-invoicing generally applies to covered B2B and export documents where aggregate turnover exceeded ₹5 crore in any preceding financial year from 2017-18 onward, subject to exclusions. Taxpayers with AATO of ₹10 crore or more must report covered documents within 30 days from the document date.

An e-way bill is generally required for covered movement of goods where consignment value exceeds ₹50,000. Exempt goods, specified movements and state-specific rules can change the result.

7. Complete the GST Return Setup

The GST return setup should identify the applicable forms, filing frequency, responsible person and internal cut-off dates before the first filing period closes.

Standard due dates generally include:

Notifications may extend a due date for a specific tax period or taxpayer group. Notification No. 12/2024-Central Tax changed the annual GSTR-4 deadline from 30 April to 30 June from FY 2024-25 onwards.

QRMP is available to eligible regular taxpayers with PAN-based aggregate turnover up to ₹5 crore, provided the latest required GSTR-3B has been filed . It reduces the frequency of GSTR-1 and GSTR-3B filing but does not remove monthly tax payment.

Reconcile the sales register before filing GSTR-1. GSTR-1A can be filed once to add a missed record or correct a record for the same period before filing GSTR-3B. It becomes available after GSTR-1 is filed or after its due date, whichever is later.

For purchases, match the books with GSTR-2B and review IMS records. An invoice appearing in GSTR-2B is not automatically eligible for ITC. Confirm that the document is valid, the supply was received, the purchase belongs to the business, and all Section 16 conditions are met.

For regular taxpayers, separate annual-return requirements may also apply. From FY 2024-25 onwards, Notification No. 15/2025-Central Tax exempts registered persons with aggregate turnover up to ₹2 crore in the relevant financial year from filing the GSTR-9 annual return. This exemption does not apply to the annual GSTR-4 required from composition taxpayers.

8. Create a Monthly GST Close

Follow this monthly sequence:

1. Enter pending sales, purchases, expenses, advances, debit notes and credit notes.
2. Reconcile outward supplies with GSTR-1 and purchases with IMS and GSTR-2B.
3. Review ITC eligibility, reverse charge and cash and credit ledger balances.
4. File the returns and save challans, acknowledgements and reconciliation workings.

Set internal cut-off dates several days before the statutory due dates. GST records must generally be retained for 72 months from the due date of the annual return for the relevant financial year. Longer retention may apply where a proceeding remains pending.

Conclusion

A reliable GST for new business process starts before the registration application. First determine whether registration is required and choose the correct scheme. Then verify the certificate, configure accounting masters, test invoices, and establish the return calendar.

The strongest control is consistency. The GSTIN, customer state, HSN or SAC, rate, place of supply , and document type should remain aligned from the original transaction through the books and return.