Know about GST — registration thresholds, dual-tax structure, composition scheme, ITC utilisation, return filing cadence, and the readiness checklist for businesses.
The question facing a finance head reading the GST framework for the first time is rarely "what does the law say" — that text is publicly available. The question is which specific provisions of the framework translate into configuration decisions, sign-offs, and filing cadences in the operation's own setting. Registration threshold against aggregate turnover. Dual-tax structure determining whether CGST plus SGST or IGST applies. Composition scheme choice against regular dealer economics. Input tax credit utilisation order across the three liability heads. Monthly versus quarterly filing cadence. Each of these is a downstream operational decision; missing the framework reading is what produces GST filing errors and input tax credit mismatches in the first two quarters under the new regime.
The objective of this primer is operational rather than theoretical — a sequenced checklist for finance heads, accountants, and tax advisors reading the GST framework to know about GST from a transition and configuration perspective. The sections below cover registration and threshold logic, the dual-tax structure, scheme classification, input tax credit utilisation, return filing cadence, supporting infrastructure (PAN-based GSTIN, GST Network, GST Council), and the readiness work that has to be complete before the first post-transition invoice. The broader ERP subject area discussion for compliance-led businesses treats this kind of framework reading as the input to the configuration brief.
When and why to use this readiness checklist
This compliance readiness checklist applies to operations preparing for the GST transition, finance teams onboarded mid-cycle who need a framework reading, or tax advisors structuring their advisory engagement against the regime. Each item below names a specific provision of the GST framework along with the configuration or sign-off it translates into. The accountant works through the checklist as the input to the chart of accounts redesign, tax master configuration, and return filing calendar. The finance head signs off each item before the post-transition operational cycle begins.
The compliance readiness checklist for GST
The items below are grouped under three categories — the structural framework and registration, the operational mechanics of tax treatment and credit, and the filing cadence and supporting infrastructure.
Structural framework and registration
Confirm the GST framework — a destination-based consumption tax on supply.
GST is a comprehensive indirect tax that consolidates several previous-regime taxes into a single unified structure, levied on the supply of goods and services on a destination basis rather than at the point of manufacture or sale. The taxable event under GST is the supply, replacing the earlier multiple taxable events (manufacture for excise, sale for VAT, provision of service for service tax). The finance head reviews each revenue stream against the supply trigger to confirm the GST liability point.
Confirm registration thresholds — INR 10 lakh and INR 20 lakh.
GST registration threshold is INR 10 lakh aggregate turnover for special category states (Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, Uttarakhand) and INR 20 lakh for the rest of the country. Aggregate turnover is computed across the entire country under the same PAN — not state by state. The accountant computes the entity's aggregate turnover against the previous year's audited financials; the finance head signs off the registration position before the application is filed.
Confirm which previous-regime taxes are subsumed and which continue separately.
The taxes subsumed under GST include central excise duty, service tax, additional duties of excise (ADE), countervailing duty and special additional duty on imports, central surcharges and cess, state VAT or sales tax, central sales tax, entertainment tax, luxury tax, lottery taxes, octroi and entry tax, and purchase tax. Taxes that continue outside GST include basic customs duty, alcohol for human consumption, petrol, diesel, aviation fuel, natural gas (until specifically notified), stamp duty, property tax, and toll taxes. The chart of accounts is restructured to retire the subsumed-tax ledgers and route the equivalent collection into the new GST output and input ledgers.
Operational mechanics — tax treatment, scheme classification, and ITC
Configure the dual-tax structure — CGST plus SGST/UTGST or IGST.
GST operates as a dual tax — Central GST (CGST) and State GST (SGST) for intra-state supplies, Central GST (CGST) and Union Territory GST (UTGST) for intra-Union Territory supplies, and Integrated GST (IGST) for inter-state supplies and imports. The place-of-supply rule on each customer master determines the applicable structure automatically. The sales head signs off the customer master billing-to and ship-to state mapping before the first invoice is raised.
Confirm the rate slab structure across GST rates.
The GST rate structure spans multiple slabs — 0% on essential goods, lower rates for specified categories, standard rates on most goods and services, and higher rates with cess on demerit goods. HSN codes on each item master determine the applicable rate slab; SAC codes on each service master serve the same purpose for services. The stores head signs off the HSN audit on item masters; the finance head reviews the rate-slab mapping where category interpretation could go either way.
Sign off the scheme classification — regular dealer or composition scheme.
Dealers with aggregate turnover below the prescribed threshold may elect the composition scheme, paying a lower effective tax rate on turnover but without the ability to claim input tax credit on inward supplies and with restrictions on inter-state supply and other activity categories. Regular dealers file monthly returns at standard rates with full input tax credit eligibility. The owner and finance head sign off the scheme classification before tax masters are configured — the choice affects invoice format, return cadence, customer-facing pricing, and downstream margin.
Configure input tax credit utilisation order across CGST, SGST/UTGST, and IGST.
Input tax credit utilisation follows a defined order. CGST credit is applied first against CGST liability, then against IGST liability — but cannot be applied against SGST or UTGST liability under any circumstance. SGST or UTGST credit is applied first against the corresponding head, then against IGST liability — but cannot be applied against CGST liability. IGST credit must be utilised first against IGST liability, with any balance applied against CGST or SGST/UTGST liability in any order. The accountant configures the set-off computation; the finance head reviews the monthly utilisation before GSTR-3B filing.
Configure the place-of-supply, reverse charge, and e-way bill workflows.
Place-of-supply logic on the customer master determines CGST/SGST or IGST treatment at invoice posting. The reverse charge mechanism auto-triggers at vendor invoice booking for applicable inward supplies, including supplies from unregistered suppliers and notified categories. E-way bill generation runs from the dispatch workflow for inter-state movement of goods above the threshold. The dispatch supervisor signs off the e-way bill configuration against a representative dispatch from each plant or depot before cutover.
Filing cadence and supporting infrastructure
Configure the monthly return cadence — GSTR-1, GSTR-3B, and the GSTR-2B reconciliation.
Regular dealers file monthly returns under GST — GSTR-1 with outward supply details by the prescribed date of each month, GSTR-3B as the consolidated monthly summary return with set-off computation, and reconciliation against GSTR-2B which is the auto-drafted statement of inward supplies. The accountant configures the monthly cadence in the compliance calendar; the finance head reviews the GSTR-3B draft and signs off before submission. Where deeper period-over-period reporting matters, BI for ERP reporting holds the multi-period view of the GST liability and credit position.
Configure the composition scheme return cadence — quarterly returns.
Composition scheme dealers file returns on a quarterly cadence with annual return obligations, at a lower effective tax rate but without the ability to claim input tax credit on inward supplies. The simpler return cadence comes with a trade-off — selling prices may need adjustment to absorb the absence of input tax credit, which can affect competitiveness when supplying to regular dealers who would have preferred input-credit-eligible invoices.
File the annual return through Form GSTR-9 and the audit reconciliation where applicable.
The annual return — Form GSTR-9 — consolidates the monthly returns filed during the financial year along with the input tax credit availed, output tax paid, inter-state and intra-state supply break-up, and the reconciliation against the audited financials. Specified entities also file the GSTR-9C reconciliation statement certified by a chartered accountant or cost accountant. The accountant maintains the running ledger of utilised and carry-forward credit through the year; the finance head reviews the annual reconciliation before submission. Where statutory payroll also forms part of the operational picture, HRMS for payroll and HR integration maintains the same kind of annual reconciliation discipline across PF, ESI, PT, and TDS.
Configure the PAN-based GSTIN and connect to the GST Network.
Every registered taxable person under GST receives a 15-digit PAN-based GSTIN comprising a state code, the entity PAN, an entity code (across business verticals within the same state), and check digits. The GST Network (GSTN) is the technology infrastructure that operates the front-end portal (registration, return filing, payment) and back-end services (validation, reconciliation, audit support). The accountant captures the GSTIN structure against each entity registration; the finance head signs off the registration data before the configured masters carry the GSTIN.
Facing similar operational challenges?
See how exactllyERP manages inventory management, financial operations, and operational reporting — built for operational businesses.
See how exactllyERP handles operational complexity →How exactllyERP supports the GST framework configuration
The framework provisions covered above translate into operational compliance only when the underlying tax engine, masters, and audit trail hold each provision as a configured rule rather than a manual control point. exactllyERP eliminates GST filing errors and input tax credit mismatches by configuring HSN-mapped item masters, place-of-supply rules at customer master, validated GSTIN at vendor master, the input tax credit utilisation order across CGST, SGST/UTGST, and IGST, the reverse charge auto-trigger at vendor invoice booking, and e-way bill generation inside the dispatch workflow. The GSTR-1, GSTR-3B, and GSTR-2B reconciliation pull from the same chain that produced the invoice — so the commercial record matches the warehouse record matches the GST return.
How exactllyERP handles this automatically: items 4 (dual-tax structure with place-of-supply logic), 7 (input tax credit utilisation order across the three liability heads), and 9 (monthly return cadence with GSTR-2B reconciliation against the purchase register) are the three places where framework provisions translate directly into the system configuration. GST council changes to rate slabs, HSN classifications, and return formats are absorbed through configured updates rather than custom rebuilds. The audit trail captures each transaction from the source supply through to the GSTR-1, GSTR-3B, and GSTR-2B entries, which is what makes the statutory audit a documentation exercise rather than a reconstruction project. exactllyERP handles incorrect GSTR filing and HSN code mapping errors automatically through the configured rate-slab logic at the item master. See it live in a free demo against your registration data and a sample previous-quarter filing.
