GST is one of the most operationally demanding compliances for startups. Unlike income tax — filed once a year — GST requires monthly engagement, ITC reconciliation, and careful categorisation of every transaction.
GST Registration
A startup must register for GST if its aggregate turnover exceeds ₹20 lakh. Voluntary registration is advisable well before this threshold — it enables input tax credit on vendor invoices, which can be significant for cloud infrastructure, marketing, and professional services.
Voluntary GST registration from Day 1 is almost always the right call. The ITC benefit on your AWS/Azure bills alone can justify it in the first year.
Filing Returns
| Return | What It Covers | Due Date |
|---|---|---|
| GSTR-1 | Outward supplies | 11th of following month |
| GSTR-3B | Summary + tax payment | 20th of following month |
| GSTR-9 | Annual return | 31 December |
| GSTR-9C | Reconciliation statement (turnover > ₹5Cr) | 31 December |
Input Tax Credit Reconciliation
You can claim credit for GST paid on inputs only if the supplier has correctly filed their GSTR-1 and the invoice appears in your GSTR-2B. Any mismatch results in credit being blocked. Maintaining a monthly ITC reconciliation is essential.
GST on SaaS and Digital Services
SaaS is taxed at 18% under GST. Key considerations: Export of services to overseas clients are zero-rated if payment is received in foreign exchange. B2B vs B2C supply rules differ significantly, particularly for digital services.