GST Return Filing

Overview of GST Return Filing

Goods and Services Tax (GST) is a tax system introduced in 2017 that replaced a total of 7 (seven) central taxation and nine state taxation. The pre-GST era was complex and fragmented, with multiple indirect taxes levied at various levels of government. At the central level, Central Excise Duty, Service Tax, and Customs Duty were imposed and at the state level, Sales Tax, VAT (Value Added Tax), and State Excise Duty were imposed. This multiple-tax system was cumbersome and had laid down a huge burden on the taxpayer. There was also an issue of tax evasion and lack of transparency in the tax administration.

To combat the complications of the traditional tax system, the new tax system was introduced in 2017 by the central government of India. It follows a multi-tiered system that aims to streamline the taxation system. GST registration is not mandatory for all taxpayers in India. It is only mandatory for the business if it surpasses a particular threshold. GST has proven to be efficient to businesspersons as well as payers with respect to the claim of Input Tax Credit on business purchases, attaining credibility and trust in the eyes of customers, suppliers, and government authorities, and much more. GST return filing is one of the mandatory requirements that every registered GST user has to comply with and non-compliance of the requirement can lead to hefty penalties and cancellation of the GST Registration number in the worst case.

GST return filing has become more accessible in today's digital age. With online GST return filing, businesses can save time and resources that would have otherwise been spent on manual filing of old tax compliances. GST return filing online allows for a seamless and hassle-free process. It doesn’t involve a bunch of steps; you have to simply log into the GST portal and enter your details, which include sales and purchase invoices, and the system will generate your return. The benefits of filing an online GST return are numerous. Online GST returns save time and fewer mistakes and errors. Make sure that you comply with the regulations and provide real-time information on taxes payable and credits available.

What is GST Return Filing?

GST Return Filing is an essential part of tax compliance for businesses in India. It consists of reporting your income, purchases, and tax bills to the government. This procedure is mandatory for all organizations and individuals noted underneath GST, and it is important to file your data well and on time to avoid penalties and fines. The GST return submitting process includes information on outward substances, inward supplies, and tax payments made all through a particular time, normally a month or a quarter.

Benefits of GST Return Filing

1. Avoid Penalties and Fines

When a GST return is not filed on time, a late of Rs. 50 per day is imposed for GST and SGST/UTGST. Additionally, an interest of 18% p.a. is also imposed on any unpaid tax. Therefore, filing a GST return on time is essential to avoid any penalty. Consulting an expert can help you to file your GST returns on time without any errors.

Filing your GST returns on time with experts can help you avoid fees and fines that may come from delays or mistakes in the filing process. The expert team ensures that your returns are made properly and within the set times, lowering the risk of financial effects due to non-compliance.

2. Claim Input Tax Credit

Timely filing of GST returns allows you to claim Input Tax Credit (ITC) on the taxes paid for business-related purchases like raw materials or services. This means you can reduce the amount of GST you owe by offsetting it with the tax you have already paid on your purchases. By claiming ITC, you lower your overall tax bill, which helps improve your cash flow and reduces the amount of tax you need to pay.

3. Maintain Compliance

GST return filing is a mandatory compliance that every GST user has to adhere to. GST can improve the trustworthiness and the reputation of the taxpayers in the eyes of tax officials and customers. Timely GST return filing helps you to build better relationships with your business partners.

4. Streamline Tax Filing Process

GST return filing can impact your business in both a positive and negative manner. Accurate and timely filing can help your business to grow, whereas incorrect or late filing can damage the reputation of the business. Therefore, it is advised to get the help of experts who can help you save time and effort in filing a GST return.

The expert shall streamline the process for you by helping you at every step, and their expertise shall reduce the chances of errors.

Eligibility Criteria for GST Return Filing

GST return filing is an essential requirement for businesses registered under the Goods and Services Tax (GST) system. GST registration is not mandatory for all businesses in India. Rather,  it depends on factors like the type of business, its annual turnover, and location. The eligibility criteria for GST filing are as follows:

1. GST Registration Requirement

Make sure that your business is registered with GST first. Registration is mandatory if the annual turnover of the business exceeds a particular limit. These limits are different for goods and services:

• For Goods Suppliers: If the annual turnover exceeds ₹40 lakhs annually (₹20 lakhs for special states).
• For Service Providers: If your business provides services and earns more than ₹20 lakhs annually (₹10 lakhs in special states).
• For E-commerce Sellers: E-commerce businesses have to register for GST irrespective of their annual turnover.

2. Interstate Supply of Goods and Services

If your business is engaged in selling goods or services to customers in other states, the business is called interstate supply, and you have to register for GST and file returns, even if your turnover is below the threshold.

3. E-Commerce Businesses

E-commerce businesses are mandatorily required to register and file GST returns irrespective of the turnover of their businesses. This is due to the nature of online sales. Both e-commerce operators (such as Amazon and Flipkart) and e-commerce sellers (individual businesses selling on these platforms) have to comply with GST laws.

4. Composition Scheme Eligibility

Small businesses can choose the Composition Scheme if their turnover is below a certain limit. The scheme offers simplified GST filing and lower tax rates.

• For Goods: Businesses with turnover up to ₹1.5 crore can opt for this scheme.
• For Services: Service businesses with turnover up to ₹50 lakhs can join the scheme.

However, businesses under this scheme need to file a simplified return (GSTR-4) instead of regular GST returns.

5. Non-Resident and Casual Taxable Persons

If your business is non-resident, that means the business does not have a permanent establishment in India or a casual taxable person (you’re temporarily doing business in India); you are mandatorily required to register for GST and file returns during your period of business activity in India.

6. Reverse Charge Mechanism (RCM)

Under the Reverse Charge Mechanism (RCM), the recipient of goods or services has to pay GST. In this situation, the supplier is not mandated to pay GST. Businesses that receive services or goods from unregistered suppliers or foreign suppliers need to comply with the rule of RCM and file returns.

7. Exemptions for Some Businesses

Certain businesses are exempted from GST filing:

• Small Businesses: If their turnover is below the threshold limit.
• Exempt Goods and Services: Some businesses that deal with exempt goods and services (like healthcare and education) do not need to file GST returns.