First GST Return
Registering for the Goods and Services Tax (GST) is a significant step for any business operating in a country where GST is implemented. It marks the beginning of a new era in how businesses manage their taxes and comply with regulations. One of the essential aspects of GST compliance is filing GST returns. Taxpayers often take the GST number but don’t know what to do after GST registration. GST registration comes with new responsibilities. This article will guide you through everything you need to know about filing your first GST return after registration.
Importance of filing the first GST return
Submitting the first GST returns is essential since they demonstrate a company’s compliance with the new tax laws. It ensures a smooth transition to the GST system by assisting businesses in avoiding penalties and legal issues. In addition, it demonstrates your credibility as a law-abiding taxpayer, which is crucial for winning over clients and authorities. Furthermore, timely submission of the first GST reports enables companies to use input tax credits and keep precise financial records, enhancing decision-making and operational transparency.
Understanding GST Return
A GST return is an accounting document that includes information about the revenue, sales, purchases, and taxes paid and collected for your company. It acts as a line of communication between you and the tax authorities, allowing them to confirm your tax obligations and payments. After filing your GST returns, you must pay the tax that results in liability (the amount you owe the government). A GST return consists of the following main components:
Components of GST return
- GSTR-1: This return includes information on the sales you performed during the tax period or your outward supply.
- GSTR-2A: This is an automatically generated return that lists the specifics of your imported supplies based on the information provided by your suppliers in their GSTR-1.
- GSTR-3B: The tax liability you owe for a specific tax period is summarized in this return. You describe your output tax liability, input tax credit, and net tax payment on a self-assessment return.
- GSTR-4: When using the composition plan, an organisation must pay subsidized GST rates ranging from 1% to 5% and submit this quarterly statement (GSTR 4).
- GSTR-8: A GST-compliant e-commerce company that has to collect TCS (tax received at source) must submit this return by the 10th of every month.
- GSTR 9: The Annual GST return is this, and it must be submitted by all registered users by March 31st of every financial year.
Timeline for Filing First GST Return
All organizations with an active GST registration in India are responsible for submitting GST returns, irrespective of business activity, sales, or profitability, throughout the reporting period. As a result, it is necessary to file GST returns even for inactive businesses with ongoing GST registrations.
The Due Date for Filing the First GST Return
It’s important to know the due date when filing your first GST return because it’s time-sensitive. The due date varies depending on the sort of taxpayer you are and how frequently you file your GST (monthly or quarterly). The first GST return is typically due on or around the 20th of the month, which follows the end of the registration month for regular taxpayers.
It’s crucial to note this date on your calendar and plan appropriately for your schedule. The following section goes over the major repercussions that can result in missing the due date.
Consequences of Late Filing of GST Return
Missing the due date to submit your GST return can have several adverse consequences, including:
- Late Fees: Late fees are allowed if GST returns are filed later than expected. The late fee is often assessed per day of being late and can quickly mount up, affecting your financial situation.
- Interest on Late Payment: You will be required to pay interest on the unpaid balance if you don’t pay the tax debt on time. This could lead to needless financial stress.
- Suspension of Input Tax Credit: Your input tax credit may be suspended if you file late, which will impact your working capital and your profitability.
- Cancellation of Registration: Repeated non-compliance and late filing may potentially result in the revocation of your GST registration, severely impairing your company’s ability to conduct business.
Being proactive while filing your GST return is necessary to avoid these repercussions. Let’s explore the steps that you may take to ensure a quick and efficient filing process.
Steps to File First GST Return
- Preparing documents required for GST return
- Before filing your GST return, you must gather all the necessary documents. These include:
- Invoices: Ensure you have copies of each invoice sent or received throughout the tax period. Ensure their accuracy and classification.
- Purchase and Sales Registers: Keep thorough records of all your purchases and sales transactions. You can use this to cross-verify the data as you file your return.
- Tax Payment Records: Keep a record of the taxes you have paid on your purchases because you will need them to submit an input tax credit claim.
After your registration, ensure you have your 15-digit GST identification number, determined based on your state code and PAN, with you. The next steps in filing your GST return are as follows:
- Visit the GST portal and sign in with your credentials.
- Select “services” from the menu. Navigate to the “Returns Dashboard” and select the financial year and the return filing period from the drop-down menu.
- Click “prepare online” after selecting the appropriate return form (GSTR-1, GSTR-2A, GSTR-3B, or any related form).
- Fill in the information as specified by the form. Include details regarding your outward supplies, input tax credit, and tax liability.
- Make sure all the data entered is accurate by checking it twice. When you are certain, select “save”, and a success message will appear on your screen.
- Now click on “submit” to file the return.
When your return appears as “submitted,” go on to pay your taxes by selecting “check balance” under “payment of tax.” Verify your cash and credit balance, and use your available credits to offset your liabilities. After that, confirm your payment by selecting “OK” from the prompt. Don’t forget to click “Proceed” after selecting “file form with DSC” or “file form with EVC,” selecting an authorized signature, and checking the declaration box. Make the necessary GST payment to finish the process.
Common errors to avoid while filing GST return
To prevent issues and penalties, filing GST returns appropriately is essential. The following are some common mistakes to avoid:
- Mismatched Invoices: Make sure the information on your invoices corresponds to the data you submit in your GST return. To prevent any problems with your GST return, it is advised to double-check all the pertinent information, including invoice numbers, dates, and amounts.
- Incorrect Tax Calculation: Misreporting of sales and purchases is a frequent mistake that can result in inconsistencies in GST returns. All invoices should be double-checked to verify proper recording of transactions.
- Input Tax Credit Reconciliation: Another common mistake is incorrectly reconciling the input tax credit with the purchases made. To minimize conflicts, this can lead to either under-claiming or overclaiming credits on your suppliers’ invoices, which could result in penalties or the loss of refund opportunities.
- Filing Under Wrong Head: For appropriate categorization and compliance, it is essential to carefully analyse the various GST heads and choose the one that most closely corresponds to your business’s operations.
One crucial step in becoming a GST-compliant business is filing your first GST return that follows registration. The key to a successful transition into the GST regime involves comprehending the components of a GST return, keeping to the timetable, and avoiding frequent mistakes. Understanding the many parts of a GST return, such as the input tax credit, inward supplies, and outgoing supplies, is essential. Keep in mind that timely and proper filing not only improves your company’s reputation but also boosts the economy and development of the nation as a whole.
This comprehensive guide has addressed the important components of the process, providing you with the knowledge you need to manage the complexities of GST return filing. Additionally, tax authorities and online platforms offer a variety of resources that can be very helpful to taxpayers. These resources include the GST portal’s user-friendly interfaces, detailed instructions, and customer support services to address any issues or inquiries.
As a result, it’s advisable to obtain professional advice if you ever have any doubts about smoothly traversing the GST’s complexity. At that point, Kanakkupillai may help you file the GST returns online for your business. Kanakkupillai is a reputable and skilled service provider that focuses on assisting companies with submitting their GST returns. We have an individual of professionals who are knowledgeable about the most recent GST legislation and can guarantee accurate and prompt return submission. Kanakkupillai can assist businesses in streamlining their tax compliance process and lowering the risk of fines or audits because of our committed team and individualized strategy.