GST for Small Business India — What You Actually Need to Track

GST Confusion Is Costing Small Businesses Money

Since GST was introduced in 2017, millions of small businesses in India have been confused, non-compliant, or simply giving up on tax tracking. The result: paying more tax than required, losing input tax credit, and staying off the formal economy.

The good news: most small shops don't need to register for GST at all. And those who do can follow a simple daily system.

Do You Need to Register for GST?

• Turnover below ₹40 lakh/year (goods): No GST registration needed
• Turnover below ₹20 lakh/year (services): No GST registration needed
• Above these limits: Mandatory registration

Note: North-eastern states have lower thresholds (₹10-20 lakh). Verify for your state.

What to Track Even Without GST Registration

Even if you're below the threshold, tracking everything helps when you cross it — and for ITR filing:

• All sales (cash + UPI separately)
• All purchases and their GST invoices
• Operating expenses (rent, electricity, salaries)

If You're Registered: The Daily GST Tracking System

For sales:

• Issue a GST invoice for every sale above ₹200
• Track CGST + SGST (or IGST for inter-state) collected
• Enter each sale in DhanRakh with the GST amount

For purchases:

• Collect GST invoices from every supplier
• Enter the GST paid — this becomes your Input Tax Credit (ITC)
• Your GST liability = GST collected from customers − ITC

GST Returns You Need to File

• GSTR-1: Monthly/quarterly sales details (due 11th or 13th of next month)
• GSTR-3B: Monthly summary + payment (due 20th of next month)
• Annual return (GSTR-9): For businesses above ₹2 crore (December 31)

The Composition Scheme — Best for Most Small Shops

If your turnover is between ₹40L-₹1.5 crore, consider the Composition Scheme:

• Pay a flat % of turnover (1% for traders, 5% for restaurants)
• File quarterly returns instead of monthly
• No need to issue GST invoices to customers
• Cannot claim ITC (but the simplicity often outweighs this)

How DhanRakh Helps with GST

DhanRakh's shop module lets you track sales with GST amounts, generates a category-wise expense export, and produces the month-end summary your CA needs for GSTR filing. No separate accounting software needed.