All About GST Returns: Meaning, Rules and Procedure

Introduction

A new indirect tax, the Goods and Services Tax (GST), was implemented in India on July 1, 2017. A comprehensive GST tax is imposed on the exchange of goods and services. Registered taxpayers under GST are expected to submit several returns that explain their company operations and tax obligations.

In this article, we shall go through the purpose, regulations, and process of GST return filing in India.

Explanation of GST Returns

A registered taxpayer under GST must submit GST returns to the appropriate tax authorities. Their business operations and tax obligations are described in detail in these forms. The GST portal allows for the online filing of GST returns.

Depending on their company operations and sales, taxpayers may need to file several forms of GST returns. There are several popular GST return types, including:

• GSTR-1: This return includes information on the taxpayer’s outgoing purchases during a specific tax period.
• GSTR-3B: This return includes information on the taxpayer’s tax obligation and tax payments for a specific period.
• GSTR-4: Taxpayers who chose the Composition Scheme must submit this return.
• GSTR-9: Information about the taxpayer’s yearly GST transactions may be found in this return.
• GSTR-5: Non-Resident Taxpayers who have enrolled for GST must submit this return.

Depending on the kind of return and the taxpayer’s annual revenue, different GST returns have different due dates. Penalties and interest may apply if GST returns are not filed on time.

Taxpayers must submit their GST returns correctly and on time to prevent fines or legal repercussions.

Importance of filing GST Returns

All companies registered for the GST in India are required to file GST returns. It is essential for a variety of reasons, including:

• Compliance: Filing GST returns guarantees that companies abide by the law and pay their taxes on time. Non-compliance can result in fines, legal action, and harm to the company’s image.
• Input Tax Credit (ITC): ITC is a crucial component of the GST system that enables companies to recoup the GST they paid on purchases. ITC, however, may only be claimed provided the provider has correctly and on time completed their GST filings. Therefore, before claiming ITC, firms must confirm that their suppliers have submitted their GST reports.
• Avoiding fines and Interest: Businesses may incur considerable costs due to fines and interest if GST returns are filed late. Businesses can avoid these fines and interest by timely filing their GST filings.
• Annual Returns: The GSTR-9 annual return lists all the GST transactions a firm completed within a fiscal year. It is a compilation of all the GST returns submitted during the year, monthly or quarterly. Businesses should submit their annual GST returns because they give a thorough picture of their GST transactions and tax obligations for the year.
• Business Reputation: Ongoing reputation management and trust-building with clients, suppliers, and other stakeholders may be achieved through the timely submission of GST returns.

In conclusion, businesses must file GST returns to avoid fines and interest, assure compliance with the law, claim ITC, get a thorough accounting of their GST activities, and retain a positive image.

Meaning of GST Returns

Businesses registered for GST in India must regularly submit Goods and Services Tax (GST) returns. The value of the supplies produced and received and the total amount of GST paid and collected within a specific time are all information on the business’s transactions included in these forms.

In this part, we will go more deeply into the purpose and meaning of GST returns, how they are submitted, and their significance for businesses. We will also review the various GST return types companies might have to file and the deadlines for doing so.

Definition of GST Returns

Businesses in India registered for the Goods and Services Tax (GST) are obliged to submit regular GST returns to the tax authorities. The value of the supplies supplied and received. The total amount of GST paid and gathered over a specific period is all information on the business’s transactions contained in these forms. The frequency of filing GST returns varies depending on the type of business and turnover and is done online through the GST site. The information submitted in GST returns is utilized by the tax authorities to administer and enforce the GST law and to confirm the correctness of the taxes paid by the business.

Types of GST Returns

Depending on their company operations and sales, firms may need to file one of the various types of GST returns. There are several popular GST return types, including:

• GSTR-1: This report includes information about the outbound supplies the company made during a specific tax period. Depending on the company’s turnover, it may be submitted monthly or every three months.
• GSTR-3B: This report includes information on the tax obligations and payments made by the firm for a specific tax period. Every month, it must be filed by companies with a turnover of more than Rs. 5 crores.
• GSTR-4: Organizations that chose the Composition Scheme must submit this return. It includes information on the company’s revenue and tax obligations for a specific period.
• GSTR-9: Information about the business’s yearly GST transactions may be found in this return. Businesses that generate more than Rs. 2 crores in annual income must register.
• GSTR-5: Non-Resident Taxpayers who have enrolled for GST must submit this return. It includes information on the company’s incoming goods and tax obligations for a specific tax quarter.
• GSTR-6: Input Service Distributors (ISD), who transfer input tax credits to their branches, must submit Form GSTR-6. It includes information on the business’s received and dispensed input tax credits for a specific period.
• GSTR-7:Businesses obligated to withhold GST tax at source (TDS) must submit GSTR-7. It includes information on the taxes withheld and paid to the government.
• GSTR-8:Businesses obligated to collect GST tax at source (TCS) must file GSTR-8 returns. It includes information on the taxes gathered and paid to the government.

Different GST returns have different due dates depending on the kind of return and the business’s annual revenue. Businesses must complete their GST returns precisely and on time to prevent fines or legal repercussions.

When to File GST Returns

Different GST returns have different due dates depending on the kind of return and the business’s annual revenue. The deadlines for some of the typical GST return types are shown below:

• GSTR-1: This report includes information on all outgoing supplies made throughout the month. Businesses with annual revenue up to Rs. 1.5 crores can submit GSTR-1 every quarter, while those with annual revenue beyond Rs. 1.5 crores must submit it every month. The GSTR-1 is due on the 11th of the next month, and for quarterly filers, it is due on the 30th or 31st of the following month.
• GSTR-2A: This auto-populated report includes information on all inward supplies that the firm has received. The firm is not needed to file it; it is viewable on the GST site.
• GSTR-3B: This monthly report lists all outgoing and incoming supplies produced throughout the month and the total tax owed. The 20th of the following month is the deadline for submitting GSTR-3B.
• GSTR-4: Companies who chose the Composition Scheme must submit this yearly return. The following financial year, April 30th, is the deadline for submitting GSTR-4.
• GSTR-5: Non-Resident Taxpayers who conducted business in India during the tax period were obliged to file this return. Within 20 days of the end of the tax period, GSTR-5 filing is needed.
• When input service distributors (ISDs) transfer input tax credits (ITC) to their units, they are obliged to file Form GSTR-6. 13 days following the conclusion of the tax period, GSTR-6 filing is required.
• GSTR-7:Businesses deducted TDS (Tax Deducted at Source) throughout the month must file GSTR-7 returns. Within 10 days of the end of the tax period, GSTR-7 filing is needed.
• GSTR-8: Businesses that have collected TCS (Tax Collected at Source) throughout the month must file GSTR-8 returns. Within 10 days of the end of the tax period, GSTR-8 filing is needed.

Businesses must submit their GST returns on time to avoid late fines, penalties, and legal repercussions. Interest, fines, and company image harm may arise from late or non-filing GST returns.

Rules for GST Returns

The government has developed several rules and regulations to ensure that companies abide by the Goods and Services Tax (GST) law and file their GST reports correctly and on time. These regulations specify the structure, content, filing procedure, and deadlines for GST returns. Penalties and legal repercussions may occur for breaking these regulations.

In this part, we’ll review some significant guidelines for GST returns, including their structure and content, how they should be filed, and the consequences of breaking them.

GST Return Filing Process

The step-by-step process involved in filing a Goods and Services Tax (GST) return:

• Register for GST: Registering for GST is the initial step in the GST return filing procedure. A firm must register for GST if its yearly revenue exceeds Rs. 20 lakhs (Rs. 10 lakhs for the Northeastern and hill regions).
• Gather GST Information: Following registration, businesses are required to gather and preserve all pertinent information regarding their transactions, including invoices, receipts, and other documentation.
• Determine tax liability: Businesses must determine how much they owe for the applicable tax period and how much GST must be paid.
• Prepare the GST return: Businesses must prepare the GST return based on the information gathered and the determination of the tax due. The kind of return and the type of company will determine the structure and content of the GST return.
• When the GST return is ready, firms must submit it using the website. Online GST return filing is possible through the GST portal, a GST Suvidha Provider (GSP), or an Application Service Provider (ASP).
• Tax payment: Businesses must use online methods to pay any tax due after submitting their GST returns.
• Error correction: Businesses can use the GST site to fix any mistakes or anomalies in their GST returns. Before the deadline for submitting the subsequent GST return, the correction procedure must be finished.

Businesses must submit their GST returns correctly and on time to avoid fines or other repercussions. Different GST returns have different due dates depending on the kind of return and the business’s annual revenue. Businesses must also keep accurate records of their transactions to ensure the GST regulation is followed.

Due Dates for GST Returns

Different GST returns have different due dates depending on the kind of return and the business’s annual revenue. The deadlines for some of the typical GST return types are shown below:

• GSTR-1: Depending on the company’s turnover, either monthly or quarterly. The eleventh day of the current month is the deadline for submitting GSTR-1 for the previous month. For instance, the GSTR-1 reporting deadline for the month of March is April 11th.
• GSTR-3B: On or before the 20th of each month.
• GSTR-4: Every year, by April 30th of the next fiscal year.
• GSTR-9: Every year, by December 31 of the following fiscal year.
• GSTR-5: Every month, 20 days following the conclusion of the tax period.
• GSTR-6: Every month, within 13 days of when the tax period ends.
• GSTR-7: Every month, ten days following the conclusion of the tax period.
• GSTR-8: Every month, ten days following the conclusion of the tax period.

Businesses must submit their GST returns on time to avoid fines and legal repercussions. Interest, fines, and company image harm may arise from late or non-filing GST returns.

Consequences of Not Filing GST Returns

Businesses may suffer severe repercussions if they fail to file GST returns or file them after the deadline. The following are potential consequences of failing to file a GST return:

• Late fees: If a firm doesn’t submit a GST return by the deadline, it will be required to pay a late charge of Rs. 50 per day (Rs. 20 for nil reports) up to 0.25% of the business’s annual revenue in the applicable state or union territory.
• Interest: Businesses are responsible for paying interest at 18% per year on any unpaid tax liabilities if they fail to submit their returns on time or pay their tax obligations on time.
• Penalties: A firm may be required to pay a penalty of up to Rs. 10,000 or 10% of the tax amount, whichever is larger if it willfully provides false information or omits any information when submitting GST reports.
• Cancellation of GST registration: A business’s GST registration may be revoked if it fails to submit GST returns despite repeated requests from the tax authorities.
• Impact on credit score: Failure to file GST returns on time or at all might lower a company’s credit rating and make it more difficult for them to get future loans and credit.

To prevent these repercussions and guarantee compliance with the GST law, it is critical for businesses to submit their GST returns on time and with accuracy.

Amendments and Revisions in GST Returns

Businesses can alter or revise their GST filings by the legislation to fix any mistakes or omissions. What you should know regarding GST return adjustments and revisions is as follows:

• Types of modifications: Two modifications may be made to GST returns: fixing mistakes and omissions and submitting a new return to replace the old one.
• The time limit for amendments: GST returns may be amended up to two years after submitting the initial return. It is crucial to remember that the changes must be made before the GST return filing deadline for the month of September after the fiscal year’s end to which the invoice relates.
• Adjusting a GST return requires filing a revised return in Form GSTR-1, GSTR-3B, or GSTR-4, depending on the situation, together with information about the original return and the changes made.
• Reconciliation of modified returns: Following the filing of amended returns, it’s critical to compare them to the original forms to confirm that the tax due has been calculated and paid accurately.
• Impact on interest and penalties: If the business’s tax liability increases due to the revised returns, interest will be due to the increased tax liability. The interest already paid will be used against the decreased liability if the revisions lead to a reduced tax due. Additionally, prior fines paid will not be reimbursed.

Changes and adjustments to GST returns should be performed carefully and precisely to prevent further issues and guarantee compliance with the GST rules.

Procedure for GST Returns

One of the most essential parts of GST compliance for Indian businesses is completing GST returns. Multiple procedures are involved in completing a GST return, and firms must keep thorough records of all their activities. In this part, we will go in-depth about the GST return filing process.

Step-by-step Process of Filing GST Returns

Here’s a step-by-step process for filing GST returns:

Step 1:Gathering the essential data is the first step.

Businesses should ensure they have all the data they need, including invoices, debit/credit notes, and other pertinent documents, before beginning the GST return filing process so they can adequately determine their tax due and the amount of possible input tax credit (ITC).

Step 2: Accessing the GST website

The next step is to use your GSTIN and password to log into the GST portal.

Step 3: Choosing the appropriate return form.

Businesses should choose the appropriate GST return form to be filed after logging in based on their registration type and turnover. GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-6, GSTR-7, GSTR-8, GSTR-9, and GSTR-10 are the different GST return forms.

Step 4: Completing the information on the return form

After choosing the appropriate return form, businesses should fill out the form’s data, such as outgoing supplies, incoming supplies, and tax liabilities. Each of these facts has its own area on the GST portal.

Step 5: Verifying the information

Businesses should confirm the details after filling them out to ensure they are correct and error-free.

Step 6:Putting the return form 

Businesses should click the ‘Submit’ option to send the return form after verifying the information.

Step 7: Paying the tax debt

Businesses must use the available payment methods, such as net banking, debit/credit cards, or NEFT/RTGS, to settle any tax liabilities they may have after filing their return forms.

Step 8: Submitting the tax form

Businesses must submit the return form by clicking the ‘File Return’ option after paying the tax debt.

Step 9: Record-keeping and acknowledgement

After submitting the return form, businesses should download the acknowledgement receipt and maintain a copy for their records.

By following this step-by-step procedure, businesses may appropriately file their GST returns and guarantee compliance with the GST rules.

GST returns may be submitted online via the GST website (https://www.gst.gov.in/). Businesses may file returns and adhere to the GST rules using the user-friendly interface of the GST portal. Businesses should use their GSTIN and password to enter the GST site, choose the appropriate return form, complete it with the essential information, validate it, and submit it. Firms must pay any tax liabilities after submission and file the return form to complete the GST return filing procedure. Remembering that companies must submit their GST returns on time to avoid fines and interest costs is crucial. 

GST Return E-filing

Electronic GST Returns filing through the GST portal is called GST Return e-filing. The Indian government offers taxpayers an online tool called the GST portal to help them comply with the GST law. Under the GST regime, all registered firms must file their GST returns electronically.

Businesses should use their GSTIN and password to enter the GST site, choose the appropriate return form, complete it with the essential information, validate it, and submit it. Firms must pay any tax liabilities after submission and file the return form to complete the GST return filing procedure.

The advantages of completing GST returns electronically include the following:

• Simple and practical procedure: Companies may submit their GST Returns online from the convenience of their own offices or homes, eliminating the need to travel to a tax office.
• Time-saving: Compared to manual filing, e-filing GST returns saves time because it is much faster and more effective.
• Accuracy: E-filing lessens the possibility of mistakes and errors during manual filing.
• Real-time status updates: The GST portal offers real-time information on the acceptance, rejection, and pending status of submitted returns.
• Secure: The GST site incorporates cutting-edge security measures to safeguard taxpayers’ private information and guarantee safe data transfer.

To Summarise, all registered firms must electronically file their GST returns to comply with the GST regime. It provides several advantages: simplicity, time savings, accuracy, real-time status updates, and security.

GST Return Forms

Registered taxpayers submit their business activity and tax obligations to the GST authority using GST return forms. Some of the frequently used GST return forms are listed below:

• GSTR-1: Registered taxpayers use this form to record their outbound supply of goods and services for a specific time period.
• The GSTR-3B return form records a period’s worth of outgoing supplies, input tax credits, and tax liabilities.
• GSTR-4:Taxpayers who have chosen the composition system must submit their quarterly summary of outward supplies and tax liability using the GSTR-4 form.
• GSTR-5:Non-resident overseas taxpayers must utilize the GSTR-5 return form to disclose their outbound supplies and tax obligations.
• GSTR-6: Input Service Distributors (ISD) utilize this return form to document the specifics of the credit they received and dispersed to their branches over the course of a specific time period.
• GSTR-7:To report the specifics of TDS deducted and deposited for a given period, taxpayers obligated to deduct TDS (Tax Deducted at Source) must utilize the GSTR-7 return form.
• GSTR-8: E-commerce companies utilize this return form to record the specifics of purchases made through their platform and the total amount of TCS (Tax Collected at Source) collected and deposited for a specific time period.
• GSTR-9:Using the GSTR-9 return form, registered taxpayers can submit a summary of their outgoing and incoming supply, input tax credits, and tax liabilities for a given fiscal year.
• GSTR-10:Registered taxpayers must utilize the GSTR-10 return form to cancel their GST registration.

Depending on their yearly revenue and type of registration, registered taxpayers submit these GST return forms online through the GST portal on a monthly, quarterly, or annual basis.

Common Mistakes to Avoid While Filing GST Returns

Following are some frequent errors that taxpayers should avoid making while submitting their GST returns:

• Invalid GSTIN: Verify that the GSTIN listed on the return form is legitimate and accurate. Returns may be rejected if they contain an inaccurate or invalid GSTIN.
• Inaccurate transaction reporting: It’s crucial to record all transactions on the right return form correctly. For instance, supply purchases made for SEZ units or developers should be declared in GSTR-1 rather than GSTR-3B.
• Non-reconciliation of data: To ensure no inconsistencies, taxpayers should compare the data they supplied on their GSTR-1 and GSTR-3B reports. Before submitting the taxes, all disagreements should be settled.
• Non-filing of nil returns: To comply with the GST rules, taxpayers who have not made any supplies within a certain period must file a nil return. Penalties may apply if no returns are filed.
• The incorrect claim of input tax credit: Taxpayers must ensure that they only make an input tax credit claim for products and services that qualify and within the appropriate tax period. Penalties may result from overclaiming input tax credits or claiming them for illegitimate products and services.
• Taxpayers should file their returns on time to avoid interest fees and penalties if they file them late or not at all. GST registration can be revoked if returns are not filed for three consecutive months.
• Not checking the return form before submitting it: Taxpayers should check it to ensure that the information is accurate and complete. Before submitting, any mistakes or omissions should be fixed.

Taxpayers may ensure that their GST returns are correct and compliant with the GST regulations by avoiding these frequent blunders.

Conclusion

In India, a comprehensive indirect tax, the Goods and Services Tax (GST), is imposed on providing goods and services. For companies to comply with the GST law and preserve their tax compliance status, GST returns are crucial. In this post, we covered the definition of GST returns and the types, deadlines, guidelines, and methods for filing them.

We described GST returns as a document that includes information about a taxpayer’s income, tax due, and other pertinent elements needed to file a tax return. The various GST returns, including GSTR-1, GSTR-3B, and GSTR-9, were then covered. We also emphasized the significance of submitting GST returns, the repercussions of failing to do so and the advantages of doing so promptly.

The rules for GST returns, including the deadlines for filing returns, the penalties for filing late, and the procedure for adjustments and revisions, were then covered. Additionally, we provide a thorough breakdown of the GST return filing process, including the procedures needed to submit a return electronically via the GST portal.

Finally, we went over some common errors that taxpayers should avoid making when filing GST returns, including using the wrong GSTIN, misreporting transactions, failing to reconcile data, failing to file nil returns, claiming the wrong input tax credit, filing returns late or not at all, and failing to double-check the form before submitting it.

In conclusion, submitting GST returns is essential to adhering to Indian GST rules. Taxpayers may ensure timely and correct compliance with the GST legislation by being aware of the many types of returns, their due dates, requirements, and filing methods and avoiding frequent errors.

Final Thoughts

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FAQs on GST Returns