Explore GST returns, filing, and eligibility. Learn the benefits of compliance for businesses under the GST regime.
Introduction
In the realm of taxation, the Goods and Services Tax (GST) has revolutionised the way businesses operate and fulfil their tax obligations. At the core of this system lies the GST return, a crucial document that unveils the financial activities of a GST-registered taxpayer. This article delves into the intricacies of GST returns, their significance, and how businesses can seamlessly navigate the process of filing. Additionally, we explore the eligibility criteria for GST return filing and identify businesses exempted from this requirement. Read on to gain a comprehensive understanding of GST return filing and compliance in the ever-changing world of taxation.
What is a GST Return?
In the world of taxation, adherence to the rules and regulations is vital for businesses to thrive. The Goods and Services Tax (GST) system, a revolutionary tax regime introduced in recent years, has brought about significant changes to the way businesses operate and comply with tax obligations. At the heart of this system lies the GST return, a crucial document that unveils the financial activities of a GST-registered taxpayer.
The GST return is akin to a treasure map, containing intricate details of a taxpayer’s income, sales, expenses, and purchases. It acts as a transparent mirror reflecting a taxpayer’s financial transactions to the vigilant eyes of tax administrative authorities. Each taxpayer, possessing a unique GST Identification Number (GSTIN), must diligently file this document with precision and accuracy.
When pieced together, the GST return paints a comprehensive picture of a registered dealer’s financial landscape. The key elements captured in this document are:
Purchases: A record of all the goods and services procured by the taxpayer, allowing the authorities to assess the scope and nature of their expenses.
Sales: An essential aspect revealing the volume and value of goods and services sold by the taxpayer to the market.
Output GST (On sales): The GST charged on the sales made, indicating the tax liability incurred on each transaction.
Input tax credit (GST paid on purchases): A crucial element that showcases the taxes paid by the taxpayer on their purchases, which can be offset against the output GST, reducing the overall tax burden.
To facilitate seamless and efficient GST filings, a solution like Clear GST software emerges as a beacon of hope for businesses. This innovative software is designed to streamline the filing process and minimise complexities. It boasts the remarkable capability to import data from diverse ERP systems such as Tally, Busy, and custom Excel, to name just a few. By harnessing the power of technology, Clear GST ensures that no financial aspect is left unturned, allowing taxpayers to sail through the intricate waters of tax compliance.
For Tally users, the software offers an additional convenience – a dedicated desktop app. This feature empowers Tally users to directly upload their financial data, making the entire GST filing experience a breeze.
GST Return Filing Eligibility
In the realm of modern economies, the Goods and Services Tax (GST) stands as a beacon of efficiency and simplicity, embraced by various nations, including India, Canada, and Australia. This value-added tax system is a comprehensive and ingenious approach to indirect taxation, encompassing the entire supply chain, from manufacturers to consumers. By replacing a multitude of indirect taxes like value-added tax, service tax, and excise duty, GST heralds a new era of transparent and effective tax administration.
The philosophy behind GST is crystal clear: openness, effectiveness, and simplicity. The aim is to create a tax system that not only boosts government revenue but also curbs tax evasion. By gathering a comprehensive record of taxable supplies and purchases, GST provides governments with accurate data to make informed decisions and foster economic growth.
For businesses operating under the GST regime, compliance is not just a legal obligation; it is a key to unlocking numerous benefits. Filing GST returns is not merely a way to avoid fines; it is a gateway to maximising profits and preserving hard-earned earnings. Through careful completion of GST filings, businesses can avail themselves of input tax credits, a valuable mechanism for offsetting tax liabilities and preventing financial losses.
Easy Ways to Get the GST Fillings Right
With the advent of digitalisation, filing GST returns online has become more accessible and convenient for taxpayers. Here’s a step-by-step guide to help you navigate through the process seamlessly:
Step 1: Register for GSTIN
If you haven’t already done so, the first step is to register for a GST Identification Number (GSTIN). This 15-digit unique number is generated based on your state code and PAN (Permanent Account Number).
Step 2: Log in to the GST Portal
Head to the official GST portal (https://www.gst.gov.in/) and log in using your username and password. After logging in, click on the ‘Services’ tab.
Step 3: Returns Dashboard
In the ‘Services’ section, you’ll find the ‘Returns Dashboard’ option. Click on it, and you’ll be prompted to select the financial year for which you want to file the GST return. Choose the relevant year from the provided drop-down menu.
Step 4: Prepare Online
Once you’ve selected the financial year, you need to choose the specific GST return you want to file. Various options will be presented, but for the online GST return process, opt for ‘Prepare Online.’
Step 5: Enter the Details
Fill in all the required details accurately in the designated fields. If you have any pending late fees, ensure to include those details while filing your GST return. After entering the information, save the form, and then submit it.
Step 6: Check Submission Status
After submitting the GST return form, verify that the status changes to ‘Submitted.’ This ensures that your filing has been successfully received.
Step 7: Tax Payment
Upon confirmation of submission, proceed to ‘Payment of Tax.’ Click on the ‘Check Balance’ option to view your credit and cash balance.
Step 8: Offset Liability
To make the GST payment online, click on ‘Offset Liability.’ This step allows you to reconcile your tax liability efficiently. Carefully select the relevant boxes for declaration purposes. Finally, click on ‘File Form with DSC’ or ‘File Form with EVC’ (Electronic Verification Code) and complete the payment process.
It’s important to note that the process may vary depending on the specific GST return form being filed. Always refer to the official GST website for detailed instructions on filling out each form accurately.
By following these simple steps, you can fulfil your GST return obligations with ease, freeing up more time to focus on growing your business and staying compliant with tax regulations. Embrace the digital era and experience the seamless convenience of filing GST returns online today.
Who Needs to File GST Returns?
The Goods and Services Tax (GST) regime brings with it a comprehensive framework for tax compliance, catering to various types of businesses. Each business type is subject to specific GST filing requirements, ensuring a smooth and transparent tax administration process. Let’s explore the diverse categories of businesses and their respective GST filing obligations:
Businesses Exceeding the Threshold:
Any individual or company providing goods or services must register for GST and file returns if their annual sales surpass the threshold of ₹ 20 lakhs (₹ 10 lakhs for select special category states). However, certain businesses, like those engaged in commodity supply in specific states or registered under the composition scheme, have lower threshold limits. Even if no transactions occur during a specific period, businesses registered under GST must file Nil returns.
Registered Businesses Under GST:
For businesses exceeding the annual revenue threshold, GST returns are a mandatory requirement upon GST registration. Companies providing exempt goods or services may not be obligated to register under GST. Nonetheless, voluntary registration demands the submission of GST returns, even during periods of no transactions.
Inter-State Transaction Businesses:
Businesses conducting inter-state operations, selling products or services to clients in other states, must register for GST and file GST returns. Such businesses require an 18-digit unique identification number (GSTIN) to be included in all invoices and relevant documents. Additionally, they must file supplementary reports like GSTR-3B to disclose inter-state supplies made during the tax period.
Composition Scheme Taxpayers:
Under the composition scheme, businesses file quarterly GST returns instead of monthly filings. Small enterprises with yearly sales up to ₹ 1.5 crores can benefit from this simplified approach, paying a predetermined percentage of their sales as tax, and enjoying reduced compliance requirements.
Input Service Distributors (ISD):
Large businesses with multiple units or branches may opt to register as an Input Service Distributor (ISD). An ISD collects invoices for input services, such as accounting, IT, or legal services, and distributes Input Tax Credit (ITC) to other units or branches. This streamlines the ITC claim process and facilitates centralised tax management.
E-commerce Operators:
E-commerce operators, running online marketplaces for buying and selling products and services, are required to register for GST. They must collect Tax Collected at Source (TCS) from vendors selling on their platforms and file GST returns (GSTR-8) to report the TCS collected. Depending on their business type and turnover, e-commerce operators may need to submit additional GST filings.
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Who Doesn’t Need to File GST Returns?
Businesses Below the Threshold Limit:
Companies and individuals with annual revenue below the threshold of ₹ 20 lakhs (₹ 10 lakhs for select special category states) are not mandated to register for GST or file GST returns. However, voluntary registration for GST necessitates the submission of returns, even if there are no transactions within a specific timeframe. Certain businesses, like those providing exempt products or services or those under the composition scheme, might be exempt from both GST registration and return filing. Nevertheless, voluntary registration or interstate business activities may warrant GST return filing for these exempt businesses.
Businesses Exempted from GST:
Certain companies enjoy exemptions from GST registration and return filing. Small enterprises with annual revenue below the threshold, businesses dealing in exempt goods or services, agricultural activities, and specific designated services fall into this category. Moreover, businesses conducting exclusively intrastate operations may not require GST registration. However, if such companies wish to participate in e-commerce platforms or claim input tax credits, GST registration might be necessary. It is vital to recognise that despite GST exemption, these companies must adhere to all other applicable laws and regulations.
Businesses Dealing Exclusively in Exempted Goods/Services:
Businesses solely engaged in selling exempt products or services are not obligated to register for GST or file GST returns. Goods or services like milk, educational services, healthcare, and passenger transportation fall under this exemption. However, businesses dealing exclusively in exempt supplies are ineligible to claim input tax credits on their purchases. If a company deals in both exempt and taxable goods or services, it may still be required to register for GST and file returns.
Non-Resident Taxpayers:
Non-resident taxpayers providing goods or services in India must register for GST and submit GST returns. They must appoint an authorised agent in India to fulfil all GST requirements, including return filing and tax payment. The GSTR-5 return is filed by non-resident taxpayers to declare purchases made in India and claim input tax credit, if applicable. Additionally, those making supplies through e-commerce platforms must register and file the GSTR-5A return to record supply details. Strict adherence to GST rules is essential for non-resident taxpayers to avoid penalties and other repercussions.
Conclusion
In conclusion, the Goods and Services Tax (GST) return is a vital document that discloses a taxpayer’s financial activities, acting as a transparent mirror for tax authorities. It provides a comprehensive picture of income, expenses, sales, and purchases, enabling businesses to comply with tax regulations efficiently. Embracing digital solutions like Clear GST software facilitates seamless and accurate GST filings. Filing GST returns correctly is crucial for businesses to maximise profits and avail input tax credits. The GST regime caters to various business types, making compliance essential for transparent and effective tax administration. While some businesses may be exempt from GST registration and return filing, it is crucial to understand the rules and adhere to applicable regulations to avoid penalties.
FAQs
How much can a CA charge to file monthly GST returns?The fee charged by a Chartered Accountant (CA) for filing monthly GST returns can vary based on the complexity of the business and the volume of transactions, but it typically ranges from ₹3,500 to ₹14,000 per return. |
Is CA required for GST filing?No, a Chartered Accountant (CA) is not mandatory for GST filing. Businesses can choose to file their GST returns on their own using the GST portal or opt for the assistance of a CA or a tax professional if needed. |
What is the penalty for GST return per day?The penalty for late GST return filing is usually ₹50 per day (₹25 for CGST and ₹25 for SGST) for each day of delay, subject to a maximum penalty of 0.25% of the taxpayer’s turnover in the relevant state or union territory. |
Who is exempted from GST filing?Businesses with an annual turnover below the threshold limit (₹20 lakhs for most states, ₹10 lakhs for special category states) and those dealing exclusively in exempted goods/services are exempted from GST filing. Additionally, certain small businesses, agricultural activities, and specific designated services may also be exempt from GST filing requirements. |
Is GST compulsory for small businesses?Yes, GST registration and compliance are compulsory for small businesses if their annual turnover exceeds the prescribed threshold limit, which is ₹20 lakhs (₹10 lakhs for special category states). Businesses below this turnover threshold have the option to voluntarily register for GST. |
