Returns under Goods and Services Tax (GST)

GST returns are formal documents that detail the income, sales, purchases, and taxes of a taxpayer registered under the Goods and Services Tax (GST) system. These returns are necessary for the authorities to compute the tax liabilities of a business and ensure compliance with the regulations of GST. This article explores the various types of GST returns, their filing requirements, due dates, and the penalties associated with non-compliance.

What are GST Returns?

A GST return is a document that outlines details of sales, purchases, expenses, and the applicable taxes. GST-registered entities must file these returns to report their tax liabilities. Returns typically include information such as:

• Purchases (goods and services acquired)
• Sales (output GST on sales)
• Input Tax Credit (ITC) (GST paid on purchases)

These returns are critical for the tax authorities to determine the net tax liability of the taxpayer.

Why is Filing GST Returns Important?

Filing GST returns serves several essential functions for both taxpayers and the government:

• For the Filer:
• Ensures compliance with legal requirements
• Helps accurately calculate the tax liabilities
• Provides a mechanism to claim Input Tax Credit (ITC)
• For the Government:
• Serves as a source of financial data for businesses
• Enables efficient scrutiny of taxpayers
• Assists in the formulation of future policies
• Helps in tracking tax evasion
• Aids in improving tax collection and compliance processes

Consequences of Not Filing GST Returns

Failure to file GST returns on time can result in various penalties:

• Late Fee: If a registered taxpayer fails to file GST returns within the prescribed due date, a late fee is imposed. Under Section 47(1) of the CGST Act, the late fee is Rs. 100 per day (for both central and state taxes), with a maximum cap of Rs. 5000. For the annual return under Section 44, a late fee of Rs. 100 per day is charged, but the maximum cap is 0.25% of the quarterly turnover.
• Interest: In case of outstanding tax payment, interest is charged at 18% per annum on the net tax liability, from the due date until the actual payment is made.

Types of GST Returns

There are various types of GST returns, each serving different categories of taxpayers and transactions. Below are the key GST returns and their filing requirements.

1. GSTR-1 (Details of Outward Supplies):

• Purpose: This form captures details of all sales or outward supplies made by the registered taxpayer.
• Filing Frequency: Monthly or quarterly, depending on turnover.
• Key Features:
• Includes invoices, debit notes, credit notes, and export details.
• Helps buyers claim Input Tax Credit (ITC).
• Deadline:
• 11th of the next month for monthly filers.
• 13th of the month following the quarter for quarterly filers (under the QRMP scheme).

2. GSTR-2A (Auto-Drafted Input Supplies):

• Purpose: An auto-generated form showing details of inward supplies based on the counterparty's GSTR-1.
• Key Features:
• Cannot be edited by taxpayers.
• Helps in verifying purchases and claiming ITC.
• Generated: Monthly, after GSTR-1 is filed by suppliers.

3. GSTR-2B (Static ITC Statement):

• Purpose: A static document that consolidates ITC data for a specific period.
• Key Features:
• Generated on the 14th of every month.
• Provides clarity on ITC that is eligible and ineligible.
• Remains unchanged even if suppliers file late.

4. GSTR-3B (Summary Return for Tax Payment):

• Purpose: A self-declared summary return capturing tax liabilities and input tax credits.
• Filing Frequency: Monthly for regular taxpayers; quarterly for QRMP scheme participants.
• Key Features:
• No invoice-level details required.
• Must be filed even if there is no business activity (Nil return).
• Deadline:
• 20th of the next month (Monthly).
• For quarterly filers, 22nd or 24th of the following month, depending on the state.

5. GSTR-4 (For Composition Scheme Taxpayers):

• Purpose: A return for taxpayers under the Composition Scheme, who pay taxes at a fixed rate.
• Filing Frequency: Annually.
• Key Features:
• Simplified form requiring fewer details.
• No input tax credit allowed for composition taxpayers.
• Deadline: 30th of April following the financial year.

6. GSTR-5 (For Non-Resident Taxable Persons):

• Purpose: Filed by non-resident taxable persons operating in India.
• Filing Frequency: Monthly.
• Key Features:
• Includes details of imports, outward supplies, and tax payment.
• Mandatory for businesses temporarily registered under GST.
• Deadline: 20th of the next month or within 7 days after GST registration expiry.

7. GSTR-6 (For Input Service Distributors):

• Purpose: Filed by Input Service Distributors (ISD) to distribute ITC to branches.
• Filing Frequency: Monthly.
• Key Features:
• Captures inward supplies and ITC distributed.
• Deadline: 13th of the next month.

8. GSTR-7 (For Tax Deductors):

• Purpose: Filed by entities required to deduct TDS under GST.
• Filing Frequency: Monthly.
• Key Features:
• Includes TDS details and liability payment.
• Helps suppliers claim TDS in GSTR-2A.
• Deadline: 10th of the next month.

9. GSTR-8 (For E-Commerce Operators):

• Purpose: Filed by e-commerce operators collecting Tax Collected at Source (TCS).
• Filing Frequency: Monthly.
• Key Features:
• Includes TCS details and supplies made via the platform.
• Deadline: 10th of the next month.

10. GSTR-9 (Annual Return for Regular Taxpayers):

• Purpose: An annual summary of all GST transactions filed during the financial year.
• Filing Frequency: Annually.
• Key Features:
• Reconciles GSTR-1, GSTR-3B, and books of accounts.
• Mandatory for taxpayers with turnover exceeding ₹2 crore.
• Deadline: 31st December of the following financial year.

11. GSTR-9C (Reconciliation Statement):

• Purpose: Reconciles GST returns with audited financial statements.
• Key Features:
• Certification by a CA or CMA required.
• Applicable to businesses with turnover above ₹5 crore.

12. GSTR-10 (Final Return):

• Purpose: Filed when a GST registration is cancelled or surrendered.
• Deadline: Within 3 months of cancellation or surrender.
• Key Features:
• Captures details of closing stock and liabilities.

13. GSTR-11 (For UIN Holders):

• Purpose: Filed by persons with a Unique Identification Number (UIN) to claim GST refunds.
• Deadline: 28th of the next month.
• Key Features:
• Applicable to foreign diplomats and embassies.

Conclusion

The filing of GST returns is crucial for maintaining compliance with the tax system and avoiding penalties. Different returns are required based on the type of business and transactions, and taxpayers must ensure timely and accurate filing to avoid late fees, interest, and other penalties. Understanding the various types of returns and the requirements for each can help businesses navigate the complexities of the GST regime effectively.

If you have any further questions or need assistance, feel free to reach out to us at admin@ushmaassociates.com or info@nricaservices.com, or contact us via call/WhatsApp at +91 9910075924. 

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Disclaimer: Aim of this article is to give basic knowledge about the topic to people who are not in touch with Indian tax norms. When anybody is dealing with these kinds of cases practically, he shall consider all relevant provisions of all applicable Laws like FEMA/Income Tax/RBI /Companies Act etc.