GST FILINGS

GST returns filing refers to the process through which businesses and taxpayers report their income, tax liability, and taxes paid to the government. Businesses must file their GST returns periodically (monthly, quarterly, or annually, depending on their turnover), which include information about sales, purchases, and the GST paid or collected on transactions.

Each return consists of specific details required by the government to ensure proper tax compliance. It also helps the authorities to cross-check and verify the accuracy of the GST tax paid and collected by the taxpayer.

Types Of GST Returns

There are multiple GST return forms that businesses must file, depending on their type of business, turnover, and transaction nature. Below are the most commonly filed GST return forms:

1. GSTR-1 (Outward Supply Return): This is the monthly or quarterly return that businesses must file to report all outward supplies (sales). It includes the details of the sales, including the GST charged, and the tax liability.

2. GSTR-2 (Purchase Return): While the GST R-2 return has been replaced with the GST R-9 form for some taxpayers, it was previously used to report purchases made by the business and the tax paid on them.

3. GSTR-3 (Monthly Summary): The GST R-3 return is a summary of GST R-1 (sales) and GST R-2 (purchases). It calculates the net GST liability after offsetting the input tax credit (ITC) against the GST collected on sales.

4. GSTR-9 (Annual Return): This return consolidates the details from all the monthly returns and presents the total tax liability for the year. It is typically filed annually and helps in reconciling any discrepancies between sales and purchases.

5. GSTR-4 (Composition Scheme): The Composition Scheme is a simpler tax scheme for small businesses, and the GST R-4 is the return form used by taxpayers under this scheme. Businesses using this scheme need to file GST R-4 quarterly.

6. GSTR-5 (Non-Resident Taxpayer Return): Non-resident taxable persons who supply goods or services in India need to file this return.

7. GSTR-6 (Return for Input Service Distributor): This return is filed by businesses that are classified as Input Service Distributors. These businesses distribute input tax credit (ITC) to various branches or units.

8. GSTR-7 (Return for TDS/TCS): Businesses required to deduct or collect Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) must file this return, reporting details of the deductions or collections.

Importance Of GST Filing

• Legal Compliance: Filing GST returns is a legal requirement for businesses registered under GST. Non-compliance can result in penalties, fines, or even the suspension of GST registration.

• Avoiding Penalties: The GST law imposes penalties for late filing of returns. The penalty for late submission includes a late fee and, in severe cases, cancellation of the GST registration

• Ensures Input Tax Credit (ITC): Timely filing of GST returns ensures that businesses can avail of Input Tax Credit (ITC) on their purchases, which can be used to offset the tax liability on their sales. Delayed returns may result in the suspension or denial of ITC, which can affect the business’s cash flow.

• Accurate Tax Reporting: Filing GST returns accurately ensures that the correct amount of tax is paid to the government and that the business is not over or underpaying taxes. It also helps the business avoid future audits or inquiries by tax authorities.

• Building a Strong Business Reputation: Consistently filing GST returns on time builds the business’s reputation with tax authorities and the public. It signals that the company is trustworthy, compliant, and organized in its financial dealings.

• Avoids Discrepancies: Regular and accurate GST returns filing ensures that businesses don’t face discrepancies in their books or during government audits. It also ensures smooth reconciliation with the GST system.

Deadlines For GST Returns

GST returns must be filed by specific due dates to avoid late fees or penalties. For most taxpayers, GST returns are due on the 20th of every month (for monthly filers) or quarterly for businesses with lower turnover. The annual return (GSTR-9) must be filed by 31st December following the end of the financial year. 

Late Fees & Penalties For GST Filings