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GST – Introduction, Returns and Filing due dates

GST was rolled out in India to simplify the complicated tax framework. GST was introduced with the slogan ‘One Nation One Tax’ to ease the compliance procedure. In this article, we explain what GST means to you and your company and the various forms to be filed by your company.

With the introduction of GST in India, the Indian financial establishment is leveraged to a more efficient and unambiguous tax structure. The system follows a complex tax structure specifying different tax rates for different commodities across the supply chain. It brings in an element of ease in business operations plus offers neutral choices irrespective of the organization and its business model.


Registration


Sale/Supply of Goods :

If you have a company whose turnover exceeds Rs 40 Lakhs in a year, you should register yourself under GST. You can choose to register yourself voluntarily even if your turnover does not exceed the required threshold. Once you are registered, you will have to file GST returns as prescribed under the law. The threshold limit under this category is Rs 20 Lakhs only if the business is registered in the states of Telangana, Kerala, Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarakhand.


Providing Services :

If you have a company whose turnover exceeds Rs 20 Lakhs in a year, you should register yourself under GST. You can choose to register yourself voluntarily even if your turnover does not exceed the required threshold. Once you are registered, you will have to file GST returns as prescribed under the law.

Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover under the composition scheme. This scheme can be opted for by any taxpayer whose turnover is less than Rs. 1.5 crore. In the case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh. (Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover)

Below is the category of companies that cannot opt for the Composition Scheme:

  1. Manufacturer of ice cream, pan masala, or tobacco

  2. A person making inter-state supplies

  3. A casual taxable person or a non-resident taxable person

  4. Businesses that supply goods through an e-commerce operator

Let us understand the types of GST return applicable to you as a start-up and how to file them online.


Internal Process:

Companies should consider the below points once it is registered under GST.

  • Sales Information – Companies need to ensure they collect information from their billing system and ensure accuracy before they start filing Return – GSTR1.

  • Information of Customers/Vendors – Companies need to strengthen their internal process and make a process to collect GST registration information about Customers/Vendors before initiating any transactions with them.

GST Input Credit – Major benefit of implementing GST is claiming input credit in the immediate month, thereby reducing in company’s cash outflows. However, this requires timeliness and discipline by the company and the company’s Suppliers/Vendors.


GST returns

GST return is a document that must be filed by all registered taxpayers under GST. The returns will include sales, purchases, output GST (tax collected on sales), and input tax credit i.e. tax paid on purchases. There are multiple returns that need to be filed once you are a registered entity.


Monthly Returns

There are only two returns you need to file on a monthly basis.


GSTR-1

Purpose – Details of sales of taxable goods and/or services made during a period Applicability – To the start-ups registered as a regular taxpayer Due date – 11th of the next month; For example, the due date to file GSTR-1 for January 2020 will be 11th Feb


GSTR-3B

Purpose

  • Monthly summary of all the sales and purchases made during a month. It also shows the GST liabilities of a taxpayer for the month in question

  • In case there are no sale or purchase transactions in a month, a taxpayer will have to file a NIL return for that period

  • Do note that GSTR-3B cannot be revised

Applicability – To the start-ups registered as a regular taxpayer

Due date – 22nd of the next Month *(Group 1 States/UTs) / 24th March (Group 2 States/UTs)


Quarterly returns

GSTR-4(up to FY 2018-19)/Form ITC-04(from FY 2019-20)

Purpose – Return to be filed by a taxpayer who has opted for a composition scheme, but has received any goods from an unregistered person or sent goods to a job worker.

Applicability – To the start-ups whose turnover is less than Rs 1.5 crore in a year and has opted for a composition scheme

Due date – 18th of the next month following the quarter; For example, a composite taxpayer will have to file GSTR-4 for Jan-Mar 2022 by the 18th of April 2022.


Annual Returns

GSTR-4 (From FY 2019-20)

Purpose – Return to be filed by a taxpayer who has opted for a composition scheme

Applicability – To the start-ups whose turnover is less than Rs 1.5 crore in a year and has opted for a composition scheme

Due date – 30th April for the following financial year. (For example, for the FY 2019-20 the due date is 30th April 2020)


GSTR-9

Purpose – Annual return to be filed by all the regular taxpayers registered under GST

  • However, the government has made GSTR-9 filing optional for taxpayers having turnover of less than Rs 2 crores for FY 2019-20 and FY 2020-21

Applicability – To all start-ups having a turnover of more than Rs 2 crores (only for FY 2019-20 and FY 2020-21); Otherwise, it is mandatory for the start-ups

Due date – 30th September of next financial year January 31, 2021.


GSTR-9A

Purpose – Annual return to be filed by the taxpayers who have opted for the composition scheme under GST; However, the government has waived off GSTR-9A filing for FY 2019-20 and FY 2020-21.

Applicability – To all start-ups registered under the composition scheme

Due date – 31st December of next financial year


GSTR-9C

Purpose – GSTR-9C is a statement of reconciliation between:

(i) the Annual Returns in GSTR-9 filed for an FY, and

(ii) the figures as per the audited annual Financial Statements of the taxpayer.

– GSTR-9C must be prepared and certified by a Chartered Accountant or Cost Accountant. It must be filed on the GST portal or through a facilitation center by the taxpayer, along with other documents such as a copy of the Audited Accounts and Annual Return in form GSTR-9.

Applicability -This is applicable to all those taxpayers whose Annual aggregate turnover exceeds rupees two crores* in that FY.

*The limit is enhanced to Rs 5 crore for the GSTR-9C of FY 2018-19 as per the CBIC notification dated 23rd March 2020.

Due date – 30th September of next financial year

-Latest update: The due date to file GSTR-9C for FY 2020-21 is extended to January 31, 2022.

Industry-Specific Returns – The government has requested for certain additional returns to be filed for companies in certain industries such as

  • E-commerce operator

  • Input Service Distributor

GSTR-8

Purpose – Return to be filed by every e-commerce operator who is required to deduct TCS at the source

  • The return consists of details of the supplies made e-commerce portal and the amount of tax collected from suppliers of goods and services

  • If you are an e-commerce operator, you can make changes to the supply details provided in any of the earlier period statements

Applicability – To the start-ups operating in the e-commerce sector and liable to deduct TCS

Frequency – Monthly

Due date – 10th of the next month in which the TCS was collected

-Also, the amount of tax at source collected by the operator shall be deposited by the same date to the government

As for Input Service Distributor (ISD), it is required to file GSTR-6 instead of GSTR-8

GSTR-6

Purpose – Return to be filed by an Input service distributor (ISD) with the details of all the invoices on which credit has been received and issued by an ISD.

Applicability – To the start-ups registered as an ISD. An Input service distributor (ISD) is a business that receives invoices for services used by its branches. It distributes the tax paid, to such branches on a proportional basis by issuing an ISD invoice.

Frequency – Monthly

Due date – 13th of the next month


Note:

(i) Due dates mentioned in all the above tables are the Standard due dates declared by CBIC, which may be extended by the board on further notifications.

(ii) List of Group 1 and 2 States/UTs respectively:

Group 1 States/UTs- Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu, and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

Group 2 States/UTs- Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh, Chandigarh, Delhi.


How to file it Online?

The entire process right from GST registration to return filing is an automated process and is executed online. Here are the steps to be followed to file GST returns:

Registration formalities –

Any Indian start-up should compulsorily register itself under GST law to obtain a registration number. This is a 15-digit number that is derived by means of registering your start-up through an online procedure. The 15 digit includes the state code of the state where your start-up is located along with your PAN

Visit the official GST website(https://www.gst.gov.in/)

Look out for the ‘services’ section. Under this, locate the ‘returns dashboard’ and start filling the form with relevant details. Make sure that you enter the financial year for which returns are filed and specify the financial period correctly

  • Choose the type of ‘return’ that you want to file

  • ‘Prepare’ the return form and click on ‘submit’.

  • After Submission, you need to file the return confirmation through an Electronic verification code (commonly called OTP) or Digital Signature.

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