8 Things About GST Returns That Will Help Make Filing Easy For Your Business
If you are an entrepreneur running a business in India it is necessary for you to be GST compliant. GST or Goods and Service Tax is a single, uniform tax on products and services. This tax is the same right from the manufacturer to the consumer and for businesses, it means 100% online compliance and uniformity of tax structures.
Since its inception, GST has been a revolutionary taxation amendment introduced with the aim of having a single, uniform tax structure across the country instead of the previous multiple taxes which were levied at different rates in different States. These multiple taxes created a tax burden on businesses, and especially on the consumers. GST helped do away with the various taxes (such as VAT, octroi, excise duties, import and export duties, service tax, luxury tax, etc.) and streamlined the entire taxation structure and process.
Under the GST norms, all registered businesses have to file GST returns either monthly, quarterly, or annually depending on the type of the business. The GST return filings are done online on the GST portal. However, businesses still have queries regarding GST and the GST return filing process. And with the changing GST return filing dates for the year 2020 owing to the pandemic, businesses will definitely benefit from getting to know more about GST returns.
This article will help clear many of the doubts regarding GST returns and provide relevant information.
- What Is GST Return?
GST return is a document that mentions all details related to GST invoices, payments, and receipts for a specific period. The Indian taxpayer (business owner) is liable to declare all transactions related to the revenue of the business. Based on these declarations the authorities will calculate the amount of tax to be paid by the business.
What Are the Details A Business Requires For GST Return Filing?
A business or the taxpayer when filing their GST return requires details of the following for a specified period of time-
- The total sales
- The total purchases
- The output GST or the GST paid by the customers
Business owners need to maintain records of the above systematically to further simplify the GST return filing process.
- Which Businesses Should File GST Returns?
The GST return filing differs according to the business and the filing structure applicable to them, whether monthly, quarterly and annually.
Under the GST structure, regular businesses need to file monthly GST returns twice in the month, along with an annual return. Those businesses that file quarterly GSTR-1 returns have a varying number of GST filing from that of the annual returns and it amounts to 17 GST online filings in a year for them. Additionally, for special cases such as composition dealers, there are separate returns that require to be filed and it amounts to 5 GST filings online in a year for these special cases.
- What are the GST return rates applicable to businesses?
The GST return filing rates typically fall into 4 slabs, namely, 5%, 12%, 18%, and 28%.
The rates applicable for a particular business depend on the type of business, as well as on the type of products and services that the business is providing.
For instance, in the food business, GST is levied only on packaged food, processed and semi-processed foods which is from 5% to 18%. No GST is levied on fresh food. At present, no food items are included in the 28% tax slab, while some products like chocolates, baked products, cakes are included in the 18% slab.
Similarly, the GST return filing slabs vary according to the type of the business and the exact nature of the product or service being sold by the business.
The goods or business categories exempt from GST presently include petrol and alcohol.
- What Are The Different Types Of GST Returns?
The GST return filing comprises if filling out the forms relevant to the business and the following are the different types of GST returns-
- GSTR-1- The GSTR-1 is the return to be furnished for reporting details of all outward supplies of goods and services made, or in other words, sales transactions made during a tax period, and also for reporting debit and credit notes issued. GSTR-1 is filed by all normal taxpayers who are registered under GST. It is to be filed monthly, except in the case of small taxpayers with turnover up to Rs.1.5 crore in the previous financial year, who can file the same on a quarterly basis.
- GSTR-2A- The GSTR-2A is the return containing details of all inward supplies of goods and services i.e. purchases made from registered suppliers during a tax period.
- GSTR-2- The GSTR-2 is the return for reporting the inward supplies of goods and services i.e. the purchases made during a tax period. However, the filing of this return has been suspended.
- GSTR-3- The GSTR-3 is a monthly summary return for furnishing summarized details of all outward supplies made, inward supplies received and input tax credit claimed, along with details of the tax liability and taxes paid. The filing of the GSTR-3 has been suspended since the inception of GST.
- GSTR-3B- The GSTR-3B is a monthly self-declaration to be filed, for furnishing summarized details of all outward supplies made, input tax credit claimed, tax liability ascertained, and taxes paid.
- GSTR-4 / CMP-08- The GSTR-4 is the return that was to be filed by taxpayers who have opted for the Composition Scheme under GST. CMP-08 is the return that has replaced the now erstwhile GSTR-4. The Composition Scheme is a scheme in which taxpayers with turnover up to Rs.1.5 crores can opt into and pay taxes at a fixed rate on the turnover declared. The CMP-08 return is to be filed on a quarterly basis.
- GSTR-5- The GSTR-5 is the return to be filed by non-resident foreign taxpayers, who are registered under GST and carry out business transactions in India. The GSTR-5 return is to be filed monthly.
- GSTR-6- The GSTR-6 is a monthly return to be filed by an Input Service Distributor (ISD). It will contain details of input tax credit received and distributed by the ISD.
- GSTR-7- The GSTR-7 is a monthly return to be filed by persons required to deduct TDS (Tax deducted at source) under GST. GSTR 7 will contain details of TDS deducted, the TDS liability payable and paid and TDS refund claimed if any.
- GSTR-8- The GSTR-8 is a monthly return to be filed by e-commerce operators registered under GST who are required to collect tax at source (TCS).
- GSTR-9– The GSTR-9 is the annual return to be filed by taxpayers registered under GST.
- GSTR-9A – The GSTR-9A is the annual return to be filed by taxpayers who have registered under the Composition Scheme in a financial year.
- GSTR-9C– The GSTR-9C is the reconciliation statement to be filed by all taxpayers registered under GST whose turnover exceeds Rs.2 crore in a financial year. The registered person has to get their books of accounts audited by a Chartered/Cost Accountant. GSTR-9C is to be filed for every GSTIN, hence, one PAN can have multiple GSTR-9C forms being filed.
- GSTR-10– The GSTR-10 is to be filed by a taxable person whose registration has been canceled or surrendered.
- GSTR-11– The GSTR-11 is the return to be filed by persons who have been issued a Unique Identity Number(UIN) in order to get a refund under GST for the goods and services purchased by them in India. UIN is a classification made for foreign diplomatic missions and embassies not liable to tax in India, for the purpose of getting a refund of taxes.
These are the GST return filing slabs that businesses need to fill out in order to file and submit their GST returns.
- What Are The Submission Timelines For The Different Types Of GST Returns?
We learned about the different slabs or form types of GST return filing above. Each is specific for a particular condition or situation and each of these has a timeline within which the form needs to be submitted.
The dates are subject to change each year therefore below the timeline, as in, monthly, quarterly, or annually, has been specified for the GST return filing slabs.
- GST returns to be submitted MONTHLY
- GST returns to be submitted QUARTERLY
- CMP-08 (previously GSTR-4)
- GST returns to be submitted ANNUALLY
- GSTR -9B
- GSTR– 9C
- GST returns to be submitted only ONCE
How Are These GST Return Rates Beneficial For Businesses?
The GST structure along with the GST return filing has been introduced to simplify the taxation process and make it uniform throughout the country. It creates transparency in the entire process and eliminates the opportunity for the creation of black money as well as for any illegal practices. The impact and importance of GST return filing on businesses are discussed in detail here.
8. What Is The Process Of GST Return Filing?
The entire process of GST return filing is online via the portal created by the authorities. It requires a list of receipts, invoices, and bills to be kept handy as mentioned above. The process is easy to understand and follow, given that the business or the entrepreneur is first registered for GST. They can get GST registration done by opting for professional services such as those offered by deAsra Foundation.
The steps involved in the GST filing online include-
- Visiting the GST portal (www.gst.gov.in).
- Getting a 15-digit GST identification number issued based on the State code and PAN number.
- Uploading invoices on the GST portal or the software. An invoice reference number will be issued against each invoice.
- After uploading the invoices, the outward return, inward return, and cumulative monthly return have to be filed online. There is an option to correct and refile the returns in case of errors.
- Filing the outward supply returns in GSTR-1 form through the information section at the GST Common Portal (GSTN) on or before the 10th of the following month.
- Being furnished the details of outward supplies by the supplier, made available in GSTR-2A to the recipient.
- Verifying, validating, and modifying the details of outward supplies, and also filing details of credit or debit notes by the recipient.
- Furnishing of inward supplies of taxable goods and services in GSTR-2 form by the recipient.
- Suppliers accepting or rejecting the modifications of the details of inward supplies made available by the recipient in GSTR-1A.
These are the facts about GST return filings that will help entrepreneurs and businesses understand it better and for further information or assistance with it, businesses can contact deAsra.