The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. Every product goes through multiple stages along the supply chain, which includes the purchasing of raw materials, manufacturing, sale to the wholesaler, selling to the retailer and then the final sale to the consumer. In short, only value addition will be taxed and burden of tax is to be borne by the final consumer.
As a seller or service provider, it is mandatory to register for the GST if your business has a turnover of above ₹ 40 lakhs (if you sell physical goods) or more than ₹ 20 lakhs (if you supply services).
A GST return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability.
Under GST, a registered dealer has to file GST returns that include:
- Output GST (On sales)
- Input tax credit (GST paid on purchases)
To file GST returns, GST compliant sales and purchase invoices are required. In addition, you also need to understand and choose the right form before you initiate the GST return filing procedure. There are 11 types of returns applicable under the GST regime and each form has a different purpose and due date. For example, you will have to file GSTR-1 by the 10th of every month in case you are filing details of outward supplies of taxable goods. Once you have this information and know your GST number, choose the appropriate GST form and file GST online by the due date.
Types of GST Returns Forms
|1||GSTR 1||Includes details of taxable goods or services, or both as well as that of outward supplies. Every GST-registered entity should file GSTR-1 except Input service distributor and Composition taxpayer.|
|2||GSTR 2*||Includes details of inward supplies related to taxable goods and/or services, along with ITC claim. This form can be edited but the filing has been suspended by the government.|
|3||GSTR-2A||Includes details of all the inward supplies of goods/services, that is, purchases made by registered suppliers. This form is filed by the 15th of every month. GSTR-2A is auto generated where the data will be fetched from the GSTR-1 filed by the supplier. It is a read-only return and cannot be edited.|
|4||GSTR 3*||Includes details of monthly returns based on finalised detail related to inward and outward supplies. It also includes details of total tax payable.|
|5||GSTR-3B||Summarized monthly return of all the details of inward and outward supplies, input tax credits and the details of all the GST liabilities. It is a self-declaration form filed by all taxpayers for every tax period.|
|6||GSTR 4||Businesses should provide a summary of the outward supplies and all the taxes paid thereon, details of import of services and supplies that may attract reverse charge. Every year by all taxpayers under the GST composition scheme should file this return.|
|7||GSTR 5||Includes details of GST return filing for non-resident foreign individuals.|
|8||GSTR-5A||Declaring the services provided to unregistered entities or individuals, from a place outside India to a person in India|
|9||GSTR 6||Serves as the form for Input Service Distributors to file returns.|
|10||GSTR-6A||This form is read-only form and system generated “draft” Statement of Inward Supplies for a Receiver Taxpayer|
|11||GSTR 7||Serves as the form facilitates Return filing for authorities initiating TDS.|
|12||GSTR-7A||TDS certificate which is generated as soon as the GSTR filing in done by the tax deductor in Form GSTR-7. The assessee uses it for keeping records.|
|13||GSTR 8||Carries supply details for e-commerce operators along with the tax amount collected as per sub-section 52.|
|14||GSTR 9||Serves as the form to file Annual Returns.|
|15||GSTR 9A||Includes details to file Annual Returns relative to Compounding taxable individuals registered u/s 10.|
GST Returns Due Date
|GST Return Form||Frequency||Due Date for Return Filing|
|GSTR-1||Monthly||Due by 10th of every Month|
|GSTR-2A||Monthly||Due by 15th of every Month|
|GSTR 3B||Monthly||Due by 20th of every month|
|GSTR 4||Annual||Due by 30th of month succeeding the Financial year|
|GSTR 5||Monthly||Due by 20th of every month|
|GSTR 5A||Monthly||Due by 20th of every month|
|GSTR 6||Monthly||Due by 13th of every month|
|GSTR 7||Monthly||Due by 10th of subsequent month|
|GSTR 8||Monthly||Due by 10th of every month|
|GSTR 9||Annual||Due by 31st of every financial year|
Benefits of GST Returns Filing
Unorganized sector is regulated under GST
Before GST, it was often seen that certain industries in India were largely unregulated and unorganized. Under GST, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.
E-commerce for quick supply of goods
Under VAT, there were many types of VAT laws, and the supply of goods through online, that is, E-commerce was never a well-defined one. All these differential treatments and confusing compliances have been removed under GST. For the first time, GST has clearly mapped out the provisions applicable to the e-commerce sector.
Regulations and accountability
The pre-GST period witnessed a disorganized tax filing system. Presently, all taxes are paid online and major hassles that were a part of tax filing have been eliminated in the process of introducing GST. This has resulted in industries becoming more accountable and tax filing laws are better regulated than before.
Improved efficiency of logistics
In GST, the restrictions on inter-state movement of goods have been lessened. Outcome of GST, warehouse operators and e-commerce aggregators players have shown interest in setting up their warehouses at strategic locations instead of every other city on their delivery route.
Higher threshold for Registration
Before GST was introduced, VAT or value added tax was applicable for any business that had an annual turnover of 20 lakhs. Services that saw a turnover of less than 10 lakhs did not have to pay service taxes.
Earlier startups with an annual turnover of 5 lakh had to pay VAT which would be very difficult for a business during the initial stages. But as GST has replaced VAT, businesses can set off the service tax on their sales.
Eliminating cascading effect
The single GST has eliminated the cascading effect of tax on tax. The introduction of GST into the Indian tax system has done away with several other taxes like central excise duty, service tax, customs duty and state level value added tax.
Under GST, there is just one, unified return to be filed. Therefore, the number of returns to be filed has come down. There are about 11 returns under GST, out of which 4 are basic returns which apply to all taxable persons under GST.