Why SMEs Struggle To Comply With GST Rules & Regulations

GST compliance

On the midnight of 1st July 2017 the historic, simplified, and transparent tax regime: Goods & Service Tax (GST) came into effect. From large corporations to small and micro enterprises, all have to adhere to the same. Due to lack of technology adoption, basic infrastructure issues are among the problems faced by small, medium, and micro enterprises to comply with GST rules & regulations. 

In this blog, we shall look into every challenge that SMEs face to cope with GST regulations in detail and will explain how GST accounting software can help you. 

Challenges In Complying With GST Rules & Regulations 

GST compliance with GST accounting software

Following are the challenges that businesses face to stay compliant with the latest GST rules and regulations

Economical Constraints 

One of the most common challenges that every small business entrepreneur faces in their journey of establishing a business is the lack of monetary resources. Due to the same reason, they fail to comply with GST norms. Because you need well-trained accounting professionals and basic IT facilities to cope with GST compliance. In order to set up all these arrangements require funds. They don’t have enough room in their budget. Hence, business owners fail to comply with GST norms. 


  1. Instead of hiring in-house accountants, consider outsourcing your requirements from an economical GST accounting service provider. 
  2. Learn some basic accounting principles and start maintaining your books of accounts in Munim – GST accounting software. It’s absolutely free* for a limited time. 

Insufficient IT Infrastructure

The new tax regime is designed in such a way that you need basic IT infrastructure to stay compliant. The involvement of IT systems not only reduces paperwork but also makes processes much more efficient and transparent. However, the initial investment to set up IT facilities is one of the roadblocks to GST compliance. Another facet of the same issue is resistance to adopting the technology and new approach to tax filing. But, the unavailability of funds is a major roadblock between the two. 


  1. Buy second-hand or modest IT systems 
  2. Sign up with Munim – GST accounting software and maintain your books of accounts from your smartphone 

Unavailability Of Professional Tax Experts 

Since filing GST is a bit complicated process, you may need assistance from professional tax experts to fully comply with GST rules and regulations. Most small businesses have a hard time finding an appropriate tax expert in their budget, nor can you recruit an in-house expert due to a lack of resources. However, it does not mean you can bypass the regulations. 

In case you are struggling with finding the right GST expert then you should consider signing up with Munim. Munim is the simplest accounting software made for SMEs that can help you stay compliant with the latest GST regulations without spending a penny because it’s free* to use. Moreover, not just GST accounting, it also aids in generating invoices, e-invoices, e-way bills, and whatnot. 

Unable To Access Right Tools 

There are hundreds of GST accounting software available in the market. The majority of them are out of reach of small businesses due to their high pricing. 

In order to provide the solution to this problem Munim is launched. As of now, Munim is free* to use but there will be some charges, you need not to worry, our pricing will be the lowest among our peers, and that’s our guarantee. 

Common Offences And Their Penalties Under CGST Act 

GST compliance with GST accounting software

Following are the measures of penalties described under the CGST Act:

General Penalty Rules 

These are the general penalty rules and it remains the same in all the other laws pertaining to a business. 

  • Every taxable person, who is penalized, will be provided with a show-cause notice first. They will also be provided with an opportunity to defend themselves. 
  • The tax authority will provide an explanation pertaining to the penalty and the reason behind the penalty along with the nature of the offense. 
  • If any person voluntarily discloses information regarding a breach of law, the tax authority may consider reducing the penalty. 

Minor Breaches Under GST 

  • Minor breaches are such where the tax amount is less than Rs. 5000 or errors are easy to fix and there is no intent of fraud. 
  • No substantial penalties for minor breaches 
  • A warning may be issued by tax authorities 

This would be advantageous for companies who have just started implementing GST so mistakes are natural in the beginning. 

Common Offences And Their Penalties Under CGST Act 

Offense Penalty 
Penalty for delay in filing GSTRThe late fee is Rs. 100/day under CGST & 100/day under SGST. So the total is Rs. 200/day. The maximum late fee is Rs. 5000. No late fee on IGST. 
Penalty for not filing GSTRPenalty 10% of the tax due or Rs. 10,000 – whichever is higher
Penalty for committing a fraudPenalty can increase up to Rs. 25,000
Penalty for assisting a person to commit fraudA penalty can increase up to Rs. 25,000
Penalty for opting for composition scheme in spite of ineligibility Fraud case- Penalty is 100% of the tax due or Rs. 10,000 – whichever is the higherNon-fraud case – Penalty is 10% of the tax due or Rs. 10,000 – whichever is higher
Penalty for charging higher GST rate intentionally Penalty is 100% of the tax due or Rs. 10,000 – whichever is higher (if the additional GST collected is not submitted with the govt)
Penalty for not issuing an invoiceThe penalty is 100% of the tax due or Rs. 10,000 –  whichever is higher
Penalty against not registering under GSTPenalty is 100% of the tax due or Rs. 10,000 – whichever is higher
Penalty for inaccurate invoicingRs. 25,000 Penality

Summing Up 

So these are all the challenges small and micro business entrepreneurs face to comply with GST rules and regulations. Hope after reading this blog you will start using our solution: Munim, the GST accounting software in India. The best thing is it’s absolutely free* for all (offer valid for a limited time only). Thus, your problem is now resolved. If you have any queries regarding our business accounting software then don’t hesitate to reach out.


About the author

Mehul is a content writer with a heart of nomad. He is currently working with Munim ERP Pvt. Ltd. as a content writer and he is passionate about Quantum Mechanics, Christopher Nolan's movie and Traveling. His weekends are well spent with his Golden Retriever recharging him with cuddles and strolls.

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