Overview
Introduction
Globally, the Goods and Services Tax (GST) is now a major tax system that connects the market and reduces the indirect taxation system. The correct and on-time filing of GST returns is one of the most important parts of GST compliance for businesses. We will discuss the details of filing a GST return, its importance, and an easy way to ensure easy compliance in this article.
CONCEPT
The supply of goods and services is liable for the goods and services tax, which is a consumption- based tax. It offers a consistent transparent tax system by introducing a number of indirect taxes, including VAT, Central Excise Duty, and Service Tax, among others.
Types
The Value of Quick Filing Your GST Return
- Legal Compliance: The government has a duty to submit GST returns. Charges, fees, and legal penalties may arise from compliance. Businesses have to keep on top of filing deadlines if they want to avoid legal penalties.
- Accounting of Input Tax Credit (ITC): Complete accounting of Input Tax Credit is guaranteed by timely submission. Only when the supplier has filed the activity and paid the GST can businesses submit an ITC claim. A delayed submission might lead to mismatches and result in the loss of ITC, which could impact the business's cash flow and revenue.
- Transparent Business Operations: Regular filing increases objectivity in business transactions. It promotes interaction for creditors, investors, and stakeholders by giving an in-depth summary of the financial health of the business.
Eligibility
Who Must Get GST Registration?
Businesses whose annual revenue above the specified threshold limit are required to register for GST. It is important for firms to confirm the relevant limitation in their jurisdiction as the threshold may differ between countries. In order to receive benefits and respect to the law, certain enterprises may also choose to freely register, even if their turnover is below the criteria. Businesses engaged in the supply of goods or services across state borders may be required to register for GST, regardless of their turnover. Individuals or businesses that occasionally make taxable supplies but do not have a fixed place of business may be required to register as casual taxable persons.
Process
GST Registration Process
- Necessary: Businesses need to have an active bank account and a valid Permanent Account Number (PAN) before they can begin the registration procedure.
- Online Request Form: A large number of nations provide an internet site for GST registration. Companies must complete the registration form with the required information, including their business name, address, PAN, and bank account details.
- Verification: The tax authorities review the application, and if all the information is correct, the GST registration will be granted.
- GST Identification Number (GSTIN): A separate GSTIN is issued to the business upon successful registration, serving as its tax identification number.
Step-by-Step Procedure for GST Return Filing:
GSTR-1 Filing:
- Proceed to the GST portal and enter your login details.
- After choosing the 'Returns' option, click 'Returns Dashboard.
- Select the appropriate fiscal year and period for filing the return. Select "Prepare Offline" (using the GST offline tool) or "Prepare Online.
- Complete the outgoing supply data, including the debit/credit notes and invoices.
- After verifying the information, select "Save" or "Preview."
- Use an Electronic Verification Code (EVC) or Digital Signature Certificate (DSC) to submit the return.
GSTR-2 Filing:
- Go to the GST portal's 'Returns' tab and choose 'Returns Dashboard.
- Select the appropriate fiscal year and period of time for filing returns.
- Either select "Prepare Offline" or "Prepare Online.
- Give information about incoming supplies, such as credit/debit notes and invoices.
- After verifying the information, select "Save" or "Preview.
- Send in the return with an EVC or DSC.
GSTR-3B Filing:
- Proceed to the 'Returns' area of the GST portal after logging in.
- The correct fiscal year and return period can be selected by selecting 'Returns Dashboard.
- Either select "Prepare Offline" or "Prepare Online.
- Fill in the input tax credit data and the specifics of supplies that are coming in and going out.
- After checking that the data is correct, click "Save" or "Preview."
- Send in the return with an EVC or DSC.
Benifit
Advantages of Registering for GST
- Legally recognized: A business gains authority by legal recognition, which is given upon it by registration.
- Easy Registration: The process of GST registration is easy for taxpayer.
- Input Tax Credit: To reduce their total tax duty, registered enterprises can claim the Input Tax Credit on taxes they have paid on purchases.
- Compliance: Applying the GST demands ensures that the tax laws are followed, reducing fines and legal issues.
Compliances
Due Dates and Late Fees
It is a must to file GST returns on time in order to avoid penalties and interest. Due dates for different returns are different and it is important for firms to carefully follow them.
Penalties for delayed Filing:
- GSTR-1: For every day of delay, pay Rs. 50 (CGST + SGST) or Rs. 100 (IGST).
- GSTR-2: For every day of delay, pay Rs. 50 (CGST + SGST) or Rs. 100 (IGST).
- GSTR-3B: For every day of delay, pay Rs. 50 (CGST + SGST) or Rs. 100 (IGST).