In this article we will be learning about GST filing requirements and the procedure to file GST returns.
The GST is changing the picture of taxation in today’s world. Things are about to get easier and better for business owners who are going to come under GST. The face of market will take a turn and this calls for a training for GST, GST filing and to learn everything possible and keep yourself prepared for GST implementation.
What are the returns to be filed under GST along with due dates?
In today’s scenario, every business will have to comply with tax returns under excise, VAT and service tax. They also have to file return in every state that they operate. There is also ambiguity in deciding the place of manufacture and time of supply.
With GST in place it does not matter whether you are a trader, manufacturer, reseller or a service provider. You only need to file GST returns. All tax payers will have tp pay three monthly returns, one quarterly return and one annual return. Job works and ecommerce companies will have to file one additional return every month.
Step by step procedure to file returns under GST
Under the GST regime every business will have to file three returns every month and they are GSTR1, GSTR2 and GSTR3. Unlike the current practice returns will have to be filed electronically only.
First you will help to declare your supplies only and the input for purchases are automatically calculated based on your vendor’s submissions. This means if your vendor fails to declare your sale you will be denied credit to that transaction.
The government has passed the list of follow up on GST return filing to the tax payers at self by this:
- 10 of every month you will declare your sales in GSTR1
- Between 11th to 15th your purchase will get auto populated and you are allowed to make correction sin GSTR 2A
- On 20th the auto populated GSR 3 will be available for filing and payment.
How can we simplify the process of filing returns under GST?
GST payments will have to be paid digital only and hence would bring a wide spread option of technology. Business with multiple branches will have to adopt a wiser technology to facilitate branch transfers which is apparently GST charged and have to re-plan their locations since the advantage of state wise differential taxes will be eliminated and the country would become a single market.
Let us elaborate GST filing
Every registered taxable person and business must know about GST filing returns.
Frequency of GST filing:
After you have registered yourself or your business with GST you will have to find out how often do you want to file your GST returns. The period that you choose is your taxable period or filing frequency. There are given options to file your GST returns either monthly, two monthly or six monthly. In case no choice is made it will be put in two monthly.
GST return filing India
GST implementation is will be going live this year (2017) by completely filtering India’s indirect tax system. GST registration will become must for all the companies that are involved in buying and selling or delivery of services. The business that exceed 10 lakhs per year will have to register in GST in northeaster and hill regions while it will be 20 lakhs for rest of the country. The entities having GST registration would be required to file GST returns, GST returns filing would be mandatory for all GST registered entities irrespective of any activity or sale during the return filing period.
The registration holder will have to file GSTR-1(details of outward supplies) on the 10th of each month, GSTR-2 (details of inward supplies) on the 15th of each month and GSTR-3 (monthly return). The tax payers would be required to file GSTR-4 every quarter on 18th of the month next to the quarter. And, annual GST must be filed by all GST registered entities on or before 31st of December.
Advantages of GST return filing
- Uniform platform
The implementation of GST in India the indirect taxes will be streamlined and standardized. Under the GST regime the business will no longer have separate VAT and service tax. GST will b the only tax that will be applied across the nation for selling, buying, providing services making a single market throughout the nation.
- Subsuming taxes
GST will subsume other taxes like central sales tax, additional customs duty, purchase tax, luxury tax, etc. Hence, under GST, many of the taxes in existence today would be subsumed and made into one tax. This would make tax collection and compliance easy for business across the country.
- Lower tax rates
In some of the states that are under VAT regime the businesses are required to comply with VAT regulations once they cross an annual turnover of Rs.5 lakhs. Under GST regime, GST liability accrues only if an entity crosses an annual turnover of Rs. 10 lakhs in northeastern states and 20 lakhs for rest of the country.
- Easier to do business
Many business like restaurants, computer sales and services businesses have to comply with both VAT and service tax regulations but with the implementation of GST it will decrease the burden from such business as they will have to pay only one tax and that is GST. Making the way of doing business much easier.
- Larger tax base
With the implementation of GST it is expected that the tax base will increase significantly. The overall tax liability for businesses will reduce overtime since more and more business will become compliant. GST will be joining hands with latest technology including data from Aadhar database, PAN database, etc, to make GST registration and GST return filing process as seamless as possible.
More on GST filing
What is the Periodicity of filing return?
This depends on the type of registration and transactions different periods have been specified. Monthly return needs to be filed by regular, foreign non-residents, ISD and casual tax payers whereas compounding tax payers have to file quarterly returns.
What if the file is not returned on time?
In case the file is not returned on time i.e within the date allotted then the tax payer will be penalized with a late fee of 100 rupees per day which can go upto 5000
Does different return forms have to be filed for CGST, SGST, IGST?
There are no separate return forms but common for all the three.
What is GSTR1?
This return form would capture the following information:
- Basic details like business name along with GSTIN, period for which the return is being filed etc.
- Details of invoices issued in the previous month and the corresponding taxes paid.
- Details of advances received against a supply which has to be made in future
- Details of revision in relation to outward sales invoices pertaining to previous tax periods
What is GSTR2?
GSTR2 return includes details of purchases by the tax payer. GSTR2 is prefilled for a tax payer based on the GSTR1 filed by his supplier. All you need to do is validate this prefilled information and make modifications if required. For example, if you are buying good from company B, then company would have filed its GSTR1 and included your name as the buyer. Now the same information will be reflected in GSTR2 as purchases which you need to validate. GSTR2 will include the following details:
- The details of purcahses auto-populated by the department
- Invoices on which partial credit has been availed earlier has to be submitted in a separate table.
What is GSTR3 return?
GSTR3 is a combination of 1 and 2. In case of GSTR2, GSTR3 is also filed for a tax payer based on GSTR1 and GSTR3. You have to validate this prefilled information and make modifications if required. GSTR3 return will include the following details:
- Information about ITC ledger, cash ledger and liability ledger
- Details of payment of tax under various tax heads of CGST, SGST, IGST
- Taxpayer will have the option of claiming refund of excess payment
What is GST quarterly return (GSTR4)?
Small taxpayer has this option for the composition scheme. In such a case he would be required to pay taxes at fixed rate. Although no input tax credit facility would be available. A taxpayer opting for the composition scheme would be required to file simplified quarterly return that is GSTR4. He is required to provide only the following details:
- The total value of supply made during the period of return
- Details of payment of tax in the return
- Declare invoice-level purchase information
What is GST annual return(GSTR8)?
All the normal taxpayers would be required to submit annual return under this return intended to provide complete visionary.
- It will be a detailed return and will capture details of all the income and expenditure of the taxpayer and will regroup them in accordance with the monthly returns.
- A major advantage of this return will be that it will provide the opportunity to correct for any short reporting of activities undertaken supply wise.
Can the taxes be paid after filing the return?
No the taxes has to be paid before filing the return for that particular period or else the return will be invalid.
Can it be revised?
Yes it can be revised
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