GST Compliance for New Businesses: Meaning, Checklist, Returns & Penalties

Ohh yes, you finally did it! Congratulations on starting a new business! Orders are coming in, payments are hitting your account, and for the first time, it feels real. And that’s when someone says, “You need GST”. All your excitement turns into stress. Questions keep popping up in your mind: How to register? What returns are to be filed? What if you make a mistake while filing the return? Feeling stuck? Don’t worry, we are here to help. 

In this guide, we will discuss GST compliance, the rules you need to follow and a checklist to stay compliant from day one. 

GST Compliance Meaning 

The meaning of GST compliance is simple: follow the stipulated GST rules and regulations that are applicable to your business, on time, with correct data and maintain a proper record. 

The following are the various nuances of the GST compliance: 

• Issuing correct GST invoices
• Reporting sales and purchases in the right returns
• Paying tax within the due dates
• Claiming only the eligible Input Tax Credit 
• Storing records in case the department asks questions

Key Areas of GST Compliance 

If you address only these seven key areas of compliance, then you will be addressing most of your GST compliance risks.

1) Proper GST registration 

You need to have the correct GSTIN for the correct states and business branches. In cases of multi-state businesses, each state may require its own GSTIN.

2) Maintaining invoice discipline 

Any incorrect GST rate, HSN code, place of supply, or customer GSTIN can create problems for compliance.

3) GST Return Compliance

Compliance through timely filing of applicable GST returns and maintaining accurate numbers in different GST forms.

4) ITC compliance

This is where most compliance problems occur. Any credits claimed must match your purchase documentation. 

5) E-invoicing and e-way billing 

E-invoice generation is compulsory above the prescribed turnover limits, and there are specific time limits for submitting them to the Invoice Registration Portal (IRP). 

6) Responses to notices, scrutinies, etc.

In February 2026, the GST portal consolidated "Additional Notices and Orders" into "Notices and Orders" Once you are registered with GST, keep checking this tab on a regular basis. 

7) Keeping of records and audit preparedness

If you cannot back up your return numbers with invoices, books, and reconciliations, compliance becomes weak.

GST Return Compliance

For a normal business, you will generally file the following returns as part of your GST compliance:

• GSTR 1: Outward supplies (i.e., Sales)
• GSTR 3B: A summary return and payment of tax
• GSTR 9 and 9C (If  applicable): An annual return and reconciliation

Additional returns include:

• GSTR‑2A/GSTR‑2B: Purchase statements auto‑drafted by the system to assist with ITC reconciliation.
• GSTR‑7 & GSTR‑8: For TDS & TCS returns to show the tax that has been deducted or collected.
• GSTR‑5 & GSTR‑5A: For Non-resident taxable persons and OIDAR (Online Information and Database Access or Retrieval) Services.
• GST PMT‑06: For taxpayers under the QRMP Scheme, for the purpose of depositing monthly tax.

Also read: 2026’s GST compliance calendar

GST Compliance Checklist

Below is a practical GST compliance checklist you can rely on:

Every day or week

• Check that all sales invoices contain the correct GSTIN, GST rate, HSN code and Place of Supply.
• Ensure that all credit notes and debit notes are properly linked.
• Track down all vendor bills and missing invoices.

Before Filing GSTR 1

• Re-check the data in the high ticket size of invoices and B2B invoices too.
• Validate customer GSTINs.
• Confirm the taxable value, GST rate and place of supply.

Before Filing GSTR 3B

• Match your tax liability against your sales summary.
• Check for any ITC (Input Tax Credit) mismatches.
• Confirm Reverse Charge entries if they apply.

Monthly Compliance Activities

• Download and store your return filing acknowledgements.
• Create a separate folder for the main documents (Sales Invoices, Purchase Invoices, Payment Proofs).
• Review the portal notices section on a regular basis.

Quarterly & Annual

• If you are under the QRMP Scheme, then make your payments and complete your quarterly submissions.
• Prepare your annual return with reconciliations and clean ledgers.

If you follow the above GST compliance checklist religiously, then your compliance is sorted.

Consequences of GST Non‑Compliance: Penalties and Beyond

You might think, “What if I miss a deadline or make a mistake in my return filing?” The following are the consequences of late return filing and making a mistake: 

1. Late Filing Fees: An additional penalty of Rs. 100/- per day for CGST & Rs. 100/- per day for SGST (Rs. 200/- per day) is payable for delayed submissions. This includes a maximum of Rs. 10,000/-

2. Interest on Outstanding Tax Amounts: In case of delay in making payments, an interest @18% p.a. is charged.

3. Penalty for Non-Registration: If you fail to register your business when required to do so, then you will be liable to pay a penalty of Rs. 10,000/- or the amount of tax which has been evaded, whichever is greater; apart from this, you may also face prosecution.

4. Penalties for Fraud & Evasion: If there is any deliberate intent to evade taxes or if you have made false statements with regard to your taxable supplies, then you may be liable to pay penalties up to 100% of the tax due, and in addition to that, you may be imprisoned for a period up to 5 years.

5. Audits & Investigations: Any discrepancies in your financial records or failure to submit returns on time may attract an audit from the authorities, and in addition to this, you may be liable to pay tax, interest & penalties.

Closing Notes 

We hope that after reading this blog, you understand GST rules and regulations and how to comply with them. If you face any issues during the compliance process, we encourage you to sign up for Munim GST Return Filing software and simplify your GST filing workflow. 

Frequently Asked Questions

What is the GST compliance rating​?

GST compliance rating is a score concept under the GST law that shows how consistently you are following GST rules and regulations. 

How to check GST compliance rating​? 

As of now, there is no facility to check GST compliance rating. 

What is the compliance burden under GST? 

Compliance burden refers to the time, effort, and expense incurred to stay compliant under GST. 

About the author

Mehul Jagwani

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Mehul is a seasoned content writer with a passion for simplifying complex accounting and GST topics. With a keen interest in entrepreneurship and business management, he specializes in creating informative and engaging content for themunim.com. His goal is to help businesses understand and implement accounting and GST software solutions effectively. When he's not crafting content, Mehul enjoys exploring new places and spending time with his Golden Retriever.