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GST Return Filing Process: Step-by-Step Guide

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Last Updated on May 15, 2023 by Kanakkupillai

The Goods and Services (GST) is a tax that is applied to all domestic sales of goods and services. This tax is collected at the point of consumption, as opposed to earlier indirect taxes collected at the place of origin. In conclusion, the GST is a broad, multi-stage, destination-based tax imposed on each value addition.

The initial conversation about India adopting GST took place in the year 2000, during the rule of the Atal Bihari Vajpayee government, and this marks the beginning of the GST’s history, which spans more than 20 years. Since they had prior experience working with State VAT, a group comprised of state finance ministers with authority was picked for this task. In his Budget statement for 2006–2007, the then Union Finance Minister first suggested moving towards GST. At first, it was planned to implement GST on April 1st, 2010.

Implementing the GST is an important milestone in India’s indirect tax reforms. It has replaced numerous indirect taxes, including entry, value-added, excise duty, luxury, and octroi. On July 1st, 2017, laws relating to service tax this took effect in India. Since it began, this indirect taxation system has undergone numerous modifications that have brought it to this point. It should be noted that the GST does not replace customs duty, which is still required for all imported goods and services. Under GST, several tax rates are applicable to various goods and services. In contrast to needs, which are included in lower and nil rate slab rates, luxury or sin products are classed to incur a higher interest rate.

Key Takeaways

  1. GST is a broad, multi-stage, destination-based tax applied to domestic sales of goods and services.
  2. It replaces multiple indirect taxes and promotes consistency in procedures, regulations, and tax rates.
  3. GST eliminates cascading tax effects and reduces compliance burden by requiring only one return.
  4. Online registration and filing processes streamline the procedure and benefit start-up businesses.
  5. Small firms can benefit from the composition scheme, lowering their taxes.
  6. GST has increased consumer demand, reduced goods costs, and boosted government revenue.
  7. Different types of GST returns need to be filed based on the nature of the business and tax requirements.
  8. The process of filing GST returns involves registration, selecting the appropriate return, providing necessary details, and making payments.
  9. Common mistakes to avoid include late filing, incorrect details, failure to reconcile returns, and not reporting all sales and purchases.
  10. Non-compliance with GST regulations can result in penalties, including late filing fees.

The most notable benefits of GST in this sense include:

  • Cascading tax effect has been abolished due to the introduction of GST, which has also resulted in a reduction in the number of compliances that need to be taken into account. For instance, service tax and VAT historically had their own returns and compliance requirements, but since the introduction of GST, firms are only required to submit one return. This, in turn, makes it easier to enter tax credit claims.
  • With the introduction of GST, India now has a single tax system that promotes consistency in procedures, regulations, and tax rates.
  • Online registration and GSTR filing are two processes that can be started for the goods and services tax. This has greatly streamlined the procedure and made it feasible for start-up businesses to easily register with GST services just in one place.
  • The GST regulations significantly streamline the online compliance, payment, and claim processes. Additionally, it benefits the unorganized sector by directly putting them under the rules of the goods and service tax.
  • Small firms might benefit from the GST composition scheme if their annual revenue is between Rs. 20 lakh and Rs. 75 lakhs. Businesses can lower their taxes due to the aforementioned scheme.

In addition, the GST bill replaced 17 indirect levies with a single, unified tax. As a result, it has reduced the cost of goods and increased consumer demand, increasing revenue for the federal and state governments.

Let’s take a closer look at it, including the several kinds of tax returns that can be filed under this new taxation system and how to file them all in this post. Let’s explore!

Types of GST Returns

GST returns must be filed monthly, quarterly, or annually by all firms that are obliged to register for GST. Every business has a different set of required returns to file. A registered business’s taxes paid, sales, purchases, and input tax credit (ITC) are usually included in a GST return. The return must be submitted to the tax authorities, who use the same data to determine a business’s tax liability.

Taxpayers can use 19 different GST return forms to submit their returns online. According to the GST return filing procedure outlined in the GST Act’s GST return guidelines section, all forms must be submitted online.

Filing GST Returns in India

GSTR – 1

GSTR-1 is a monthly GST return for outbound purchases made by a regularly registered taxpayer. Alternatively, to state it another way, this monthly return highlights a company’s sales activities for a specific month.

GSTR-1 must be submitted on or before the 11th of every month if the company has a total annual income of more than Rs. 5 crores or has not taken part in the QRMP scheme. If the business has taken part in the QRMP scheme, payments are due quarterly by the 13th of the month after each quarter.

GSTR – 2

The GSTR-2 is a recurring report of inward supplies of goods and services as authorized by the recipient of the goods and services. In contrast, the GSTR-2 contains information about the purchases the receiver made during a specific month. The details from GSTR-2A are automatically filled into the information in GSTR-2.

The GSTR-2 must be filed by the 15th of the following month. However, the process of making any necessary alterations and filings typically takes place from the 11th to the 15th of the following month.

GSTR – 3B

GSTR 3B constitutes a simplified monthly summary return of both inbound and outbound supplies. It is a self-declaration that lists the taxpayer’s total GST obligations for the relevant tax period. Additionally, it aids the taxpayer in timely discharging tax responsibilities.

The GSTR-3B form is not subject to revision. Additionally, the submission of invoice comparisons between the supplier and the buyer is not required by this form. This implies that the GSTR-3B form is submitted separately by the suppliers and the beneficiaries. As a result, such a facility prevents return filing delays that might otherwise result in late fines and interest.

The GSTR-3B must be turned in by the 20th of the month following the tax period for which a GST return is filed.

GSTR – 4

A registered taxpayer who has applied for the Composition Scheme must submit GSTR-4, a quarterly return. Small taxpayers with a revenue of up to Rs 1.5 Crores must pay tax at a fixed rate and submit quarterly returns under this scheme. This contrasts the typical registered dealer, who submits GSTR-1, GSTR-2, and GSTR-3B monthly filings.

The return is required by the 18th of the month following the quarter for which it is to be filed.

GSTR – 5

The GSTR-5 return is what non-resident foreign taxpayers who are registered for GST while running a business in India are required to submit. All outgoing supplies made, incoming supplies received, credit/debit notes, tax obligations, and taxes paid are listed in full in return. 

Under the GSTIN that the taxpayer has been registered within India, the GSTR-5 return must be submitted on the 20th of every month.

GSTR – 6

An Input Service Distributor must submit GSTR 6 monthly as part of their regular reporting process. This return lists all the bills for which credit has been granted and which an ISD has issued. In other words, it summarises the entire amount of input tax credit available for distribution within a specific month. As a result, every credit recipient can access the information about the invoices that an ISD provides on form GSTR 6. The recipient can view these specifics in part B of the GSTR 2A form.

The GSTR-6 filing deadline is the 13th of the month after the month in which the tax is payable.

GSTR – 7

The GSTR-7 is a monthly report that must be filed by individuals who are required under GST to deduct TDS (Tax deducted at Source). This return will describe the TDS that was deducted, the TDS responsibility that was owed and paid, and any requested TDS refunds. 

The GSTR-7 filing deadline is the 10th of each month.

GSTR – 8

Every internet commerce operator obligated to deduct Tax Collected at Source under GST must submit a GSTR 8 monthly return. This report includes information about the purchases made through an online store and the total tax payments made to vendors of goods and services. The operator can also modify the specifics of the supplies provided in any earlier period statements.

This return filing deadline is the 10th of the month following the month the tax is to be paid.

GSTR – 9

GSTR-9 is the annual return that GST-registered taxpayers must file. According to GST law, it must be paid by December 31st after the relevant financial year. It includes information on all outgoing supplies made, incoming supplies received (under CGST, SGST, and IGST tax heads), a summary value of supplies reported under each HSN code, and information on taxes owed and paid. 

It compiles all the GSTR-1, GSTR-2A, and GSTR-3B monthly or quarterly returns submitted throughout that fiscal year. All GST-registered taxpayers are obliged to file GSTR-9. 

There are a few exceptions, though, including taxpayers who have chosen the composition scheme, casual taxpayers, input service distributors, non-resident taxpayers, and those who must pay TDS by Section 51 of the CGST Act.

GSTR – 10

An individual whose GST Registration is cancelled is needed to file GSTR-10, which is the final return. A registered individual of this type does not include the following:

  • Distributor of Input Services 
  • Anyone who pays Tax Under Composition Scheme
  • Non-resident taxpaying individual
  • A person who is obtaining TDS or TCS

Form GSTR-10 is submitted digitally via the common GST portal directly or through a facilitation centre by the Commissioner’s guidelines. This final return is filed to ensure the taxpayer has paid all outstanding debts. This obligation could comprise the sum that is greater of the following:

Input taxes associated with inventories of finished and semi-finished commodities, capital goods, machinery, or equipment, or output taxes owed on such goods.

GSTR – 11

Individuals must submit the GSTR-11 return given a Unique Identity Number (UIN) to be eligible for a GST refund for the products and services they purchased in India. UIN is a categorization created for foreign embassies and diplomatic missions not subject to taxation in India to receive a tax refund. The GSTR-11 will include information on the inward supplies received and the refund requested.  

The following organisations will receive the UIN:

  • Embassy or a consulate in another country
  • Multilateral Financial Institutions and Organisations are guided by the United Nations Act of 1947.
  • Organization of the United Nations specialized groups
  • any additional consumer or person that the Commissioner may define;

The deadline for reporting GSTR-11 is the 28th of the month following the month in which the UIN holders provided inward supplies.

Steps to File GST Returns

Step-by-step process of filing GST Returns

The Goods and Service Tax Network software or programme also allows for electronically filing GST returns. The steps you can follow to submit your GST return filing online are as follows:

Step 1: Get the GSTIN number by registering for GSTIN. Your state code of operation and PAN are used to generate the 15-digit number.

Step 2: After entering your username and password to access the GST portal, click the ‘Services’ tab.

Step 3: When selecting the “Returns dashboard” option, you will be prompted to select the fiscal year for which you are filing the GST return. Choose the suitable option from the available drop-down menu.

Step 4: Next, choose the return you want to file. You will have a choice of filing methods. Select “Prepare Online” to begin the online GST return procedure.

Step 5: Completely fill out all of the fields with the necessary information. Keep in mind that while filing your GST returns, you must also include the specifics of any outstanding late fees. The form must then be saved before being submitted.

Step 6: Verify that the GST return’s status has been changed to “Submitted” after the GST return form has been submitted.

Step 7: When the return status indicates that it has been submitted, select “Payment of Tax.” After that, an option labelled “Check Balance” will become available and must be clicked. The credit and cash balances are displayed in the balance.

Step 8: Click on the ‘Offset Liability’ option to quickly make an online GST payment. Now check the appropriate boxes to make a declaration. Finally, complete the payment and click ‘File Form with DSC’/’File Form with EVC’.

Common Mistakes to Avoid While Filing GST Returns

Nowadays, many people choose to file their own GST return rather than hire a CPA or tax expert. However, a number of people make certain fairly common errors while filing GST. In order for individuals to avoid them, we have listed some typical mistakes here.

1) Failing to File Returns on Time 

It is crucial to submit GST returns on time. The revocation of a GST registration and financial fines are possible consequences of failing to submit GST returns on time.

2) Filing Incorrect Details

When completing forms, assessors frequently fail to include exempt incomes like dividends and ppf interest. The tax director’s TAN numbers must be recorded with extreme care.

3) Failing to Reconcile GSTR 3B & GSTR 1

GSTR Registered person is making a big mistake if he does not match his GSTR 3B and GSTR 1 returns on a regular basis. Before filing GST returns, each person should double-check that their GSTR 3B and GSTR 1 reports are matched on a monthly basis.

4) Failing to Reconcile GSTR – 2A

No matter how many invoices taxpayers have, the GST regulation 36(4) states that he is only permitted to claim an ITC credit equal to 110% of the qualifying ITC stated on form GSTR 2A or the ITC as per books, whichever is lesser.

5) Failing to Report All Sales and Purchases

Many taxpayers believe they are exempt from filing a NIL report if they have no sales or purchases. But this is a typical misunderstanding. Even if there were no transactions during a tax period, people registered under GST are nevertheless required to file a NIL return, according to GST Law. A financial penalty for failure to submit a NIL GST return may be assessed. The tax authority may notify that the GST registration will be cancelled for failure to submit a GST return.

Penalties for Non-Compliance

The late charge is a payment paid in accordance with GST regulations for the late filing of GST returns. A prescribed late charge must be paid on each day that a GST-registered business files its GST returns after the deadline in consideration. The Input Tax Credit (ITC) made available by an electronic credit ledger cannot be used by the taxpayer to pay the late fee; instead, the late fee must be paid in cash.

Late Filing Fees

The CBIC has lowered the penalty amount as follows due to technological problems and frequent amendments to GST clauses:

  • CGST of Rs.25 per day plus SGST of Rs.25 per day, for a total of Rs.50 per day, are required for intra-state supplies on monthly filing.
  • Monthly filing for interstate supplies: IGST of Rs. 50 per day

NIL return

Even if no GST payments were made to the Income Tax authorities, a NIL return must still be submitted.

A late fee of Rs. 50 under the CSGT act and Rs. 50 under the SGST act, or a total of Rs. 100 per day was imposed on the taxpayer in cases where NIL returns were filed late.

However, the most recent GST modifications decreased this fine to Rs. 20 per day, or Rs. 10 under CGST and Rs. 10 under SGST.

Interest in Late Payment

After deducting input tax credit claims, interest is charged on GST liabilities that are paid late. Every taxpayer who submits a delayed GST payment, that is, pays CGST, SGST, or IGST later than the due date, gets an excess input tax credit, and lowers an excess output tax debt is required to pay interest.

The following interest rates must be paid if the due dates do not pay GST for submitting returns like:

  • 18% per annum after the due date
  • 24% per year after the due date if an excess ITC claim is made or an excess output tax reduction is made.

Late Fees for Non-Filing

A late fee of Rs. 50/day, or Rs. 25 per day in every instance of CGST and SGST (in case of any tax liability), and Rs. 20/day, or Rs. 10 per day in every event of CGST and SGST (in case of Zero tax liability), subject to a cap of Rs. 5000/-, must be deducted from the provided amount when a taxpayer fails to file returns by the deadlines.

Conclusion

In summary, submitting GST returns is crucial to operating a GST-registered firm. To avoid unnecessary reconciliation and legal issues, taking precautions and keeping clear of frequent blunders is critical. Additionally, taxpayers must be aware of the several GST return types and which ones apply to them depending on their registration status and annual revenue. Firms should also keep accurate records of their transactions to avoid any problems during audits and ensure they are correctly documented. To ensure compliance with GST requirements, seeking expert advice and direction can also be beneficial. 

Kanakkupillai will guide you in this way so that you can successfully complete the GST return filing process without making any mistakes or encountering any difficulties. Our team of professionals is knowledgeable about the most recent GST rules and will ensure that your taxes are filed effectively and on time. You can count on us to handle your GST returns precisely and quickly, freeing you up to concentrate on other crucial facets of your company. Our team is committed to giving you quality service and ensuring you comply with all applicable laws. 

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