What GST-registered business should know about filing returns?

ncome Tax authorities rely on GST returns to calculate the tax liability of a business.

What GST-registered business should know about filing returns

If you are planning to start a business providing goods or services that come under the purview of India’s central Goods and Services Tax (GST) Act, you will need to get your enterprise registered for GST. Once this is done, you will have to submit monthly, quarterly, and/or annual GST returns based on the type of business you run. 

But what exactly is a GST return? Read on to find out.

A GST return is a statement detailing the income(s) of an entrepreneur that must be disclosed to the government for the purpose of calculating the tax liability of that business enterprise. If you are registered under the GST Act, your GST return must include the following details:

  • Purchases
  • Sales
  • Output GST (on sales)
  • Input tax credit (GST paid on purchases)

You will also have to raise GST-compliant sales and purchase invoices to file GST returns.

Related: GST 101: What India's Biggest Tax Reform Means For You

Different types of GST returns

A GST return (GSTR) can be of various types. They are indicated by numbers from 1 to 11 - GSTR-1, GSTR-2, etc. all the way to GSTR-11.

However, in April 2019, a new return filing procedure called Form CMP-08 replaced GSTR-4 for small businesses that opt for the ‘composition scheme’, which involves GST payment at a fixed rate of turnover, thereby bypassing a maze of complex formalities. This scheme is offered to businesses with annual turnovers of less than Rs.1.5 crore, and those opting for it are known as ‘composition dealers.’

Also, GSTR-2 and GSTR-3 have been suspended from September 2017; the first one had details of inward supplies of taxable goods and/or services, while the second was for outward and inward supplies along with details of tax payment.

Periodicity of filing GST returns

GST-registered businesses have to file monthly returns and annual returns. GSTR-1 offers businesses two options: quarterly and monthly. For the rest, it is either of the two. The periodicity of the various return types is outlined below:

GSTR-1: This gives details of outward supplies of taxable goods and/or services.

  • Periodicity (i): Quarterly for businesses with turnover less than Rs 1.5 crore
  • Next date (i): 13th January 2021 (for the October-December quarter)
  • Periodicity (ii): Monthly for businesses with turnover more than Rs 1.5 crore 
  • Last date (ii): 11th December (for November it is always the 11th of the following month)

RelatedEverything You Need To Know About The GST Return Forms

GSTR-3B: It is a summary of outward supplies along with input tax credit and tax paid and is for companies with an annual turnover of Rs 5 crore in the previous financial year.

  • Periodicity: Monthly. 
  • Next date: (i) 22 January 2021 and (ii) 24 January 2021 (Before the pandemic, the due date was 20th of every month, but now the date is split between states)
    • 22nd of the month: Applicable for Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, and Andhra Pradesh; and the Union Territories of Daman and Diu, Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands, and Lakshadweep
    • 24th of the month: Applicable for Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, and the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh, and New Delhi.

CMP-08: Statement-cum-challan to make a tax payment by composition dealers (explained earlier).

  • Periodicity: Quarterly
  • Next date: 18 January 2021 (18th of the month succeeding the quarter).

GSTR-5: This is for a non-resident foreign taxable person.

  • Periodicity: Monthly
  • Next date: 20th January 2021 (due date is 20th of the following month).

GSTR-6: This is a monthly return for input service distributors to provide details of their distributed input tax credit and inward supplies.

  • Periodicity: Monthly
  • Next date: 13th January 2021 (due date is 13th of the following month).

GSTR-7: This is the return for government authorities deducting TDS.

  • Periodicity: Monthly
  • Next date: 10th January 2021 (due date is 10th of the following month).

GSTR-8: Details of supplies from e-commerce operators and TDS collected by them.

  • Periodicity: Monthly
  • Next date: 10th January 2021 (due date is 10th of the following month).

GSTR-9: This is the returns for a regular taxpayer.

Related: How Well Do You Understand GST

GSTR-9A: For composition dealers registered any time during the year.

GSTR-9C: This is a certified reconciliation statement

  • Periodicity: Monthly (for all three).
  • Next date: 31st December (for all three).

GSTR-10: Final return for those whose GST registration is cancelled.

  • Periodicity: Once
  • Next date: Within three months of the date of cancellation or date of cancellation order, whichever is later.

GSTR-11: This covers details of inward supplies to be furnished by a person having UIN and claiming a refund

  • Periodicity: Monthly
  • Next date: 28th of the month following the month for which statement is filed.

Late fees

Late payment comes with a penalty, and in case you miss clearing your GST dues, and GSTRs filed on time during the year, late fee charges and interest will be levied. It is also applicable for delays in filing nil returns - that is, even if there has been no sale or purchase, and no GST liability declared in GSTR-3B.

The late fee will be as prescribed under the GST Act for each day after the due date. It needs to be paid in cash separately for CGST, SGST, and IGST in separate electronic cash ledgers. You cannot use the input tax credit facility available in electronic credit ledger for late fee payment. 

Also please note that you cannot file GST without payment of the late fee. Currently, the GST portal is aligned to charge a late fee only on returns GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-8, GSTR-7, and GSTR-9.

Penalty amounts

Under the law, late fees are to be paid under both the Central Goods and Services Act, 2017 (CGST Act) and the State Goods and Services Act, 2017 (SGST Act)/Union Territory Goods and Services Act. Also, the Integrated Goods and Services Act, 2017 (IGST Act) says that late fee relating to inter-state supplies is equal to the sum of fees prescribed under both CGST Act and SGST Act.

The various late fee rates under the Acts are given below for both monthly and quarterly filings (that is, except annual filings):

  • Under CGST: Rs 25 per day
  • Under SGST: Rs 25 per day
  • Under IGST: Rs 50 per day

The maximum late fee payable is Rs 5000, while for ‘nil’ filers it is Rs 10 for each day’s delay under CGST and SGST, and Rs 20 under IGST.

The late fees cited above are the new reduced rates, aimed at providing relief to taxpayers facing difficulties in GST return filing; earlier, the rates were Rs 100 daily under CGST Act and SGST Act (Rs 25 for ‘nil’ return filers), and Rs 200 daily under the IGST Act (Rs 50 for ‘nil’ return filers).

For annual return violations (GSTR-9), the CGST Act and SGST Act lay down a daily late fee of Rs 100 separately for each Act; so, the total late fee penalty is Rs 200 a day. Moreover, the law has fixed a maximum late fee at 0.25% of the turnover for the financial year under assessment.

Interest penalty

GST filing violations also attract interest penalty as outlined below:

  • Tax paid after the due date at 18% p.a.
  • Claiming excess input tax credit at 24% p.a.
  • Reducing excess output tax liability at 24% p.a.  

Also Read: How Does GST Impact Your Wallet?

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