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Estimated Tax Returns Under The New GST Law

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Goods And Service Tax (GST) In India

The Goods and Service Tax or GST is a single uniform tax designed to incorporate several existing taxes levied by the Center and the State into a single umbrella tax. GST will serve as a comprehensive indirect tax levied on the sale, manufacture and consumption of goods and services within India. The Government of India has proposed implementing GST by 1st July, though it may take a few months to roll out a complete and error free GST system. All previous taxes payable in the form of VAT, CST, Central Excise Duty, Service Tax, CVD, etc. to the Central and State Government will be paid in the form of GST through CGST, SGST and/or IGST.

A return is a document that is required to be filed with the tax authorities by Law. A normal taxpayer must furnish three returns monthly and one return annually. All returns must be filed electronically through a common portal provided by GSTN.

Who Has To File GST Returns?

Every entity (business or person) registered under GST will have to file GST returns (GSTR). GST should also be filed by entities that make no sales or purchases during a given period (year) in the form of nil-returns (meaning no returns). The periodicity for filing tax returns specified varies depending on the type of transaction and registration by the taxpayer. Compounding taxpayers have to file returns quarterly (every three months) and regular taxpayers, foreign non-residents, casual taxpayers and Input Service Providers (ISD) have to file returns monthly.

Taxes have to be paid before the returns are filed and the returns can be revised at a later stage. If a taxpayer does not file returns within the stipulated due date, then the taxpayer will be liable to pay a fine of INR 100 per day up to a maximum of INR 5000.

Payment Of GST

Any tax liability in excess of INR 10,000 will be required to pay GST online. The payment process for GST can be maintained and done through:

  1. Electronic tax liability ledger – each registered taxpayer is required to maintain a tax liability ledger online. This ledger indicates the taxes and interests due under various heads.
  2. Electronic cash ledger – is used for making payments under the heads of CGST, SGST and IGST (and other minor heads under these three heads, such as fees, penalties, interest, tax, etc.).
  3. Electronic credit ledger – all taxes on inputs are recorded in this ledger. All payments made in lieu of tax have to be made through either this ledger or the electronic cash ledger.

Types Of Returns Under GST

There are 11 types of returns that can be filed under GST that ranges from GSTR-1 to GSTR-11.

Sr. No. Return Form Details Frequency Due Date
1 GSTR-1 Outward Sales Monthly 10th of every month
2 GSTR-2 Inward Purchases Monthly 15th of every month
3 GSTR-3 GST Monthly Return Monthly 20th of every month
4 GSTR-4 GST Quarterly Returns Quarterly 18th of every quarter
5 GSTR-5 Periodic Return For Non-resident taxpayer Monthly 20th of every month
6 GSTR-6 Return For Input Service Provider Monthly 15th of every month
7 GSTR-7 GST Return For TDS Monthly 10th of every month
8 GSTR-8 GST Return For eCommerce Suppliers Monthly 10th of every month
9 GSTR-9 GST Annual Return Annually 31st of Dec
10 GSTR-10 Final Return Monthly Within 3 months
11 GSTR-11 Government Depts And UN Bodies Monthly 28th of every month

How To File Tax Returns Under GST?

Let’s look at the most important forms to be filed, i.e. GSTR-1, GSTR-2, GSTR-3, GSTR-4 and GSTR-9. GSTR-1, GSTR-2 and GSTR-3 must be submitted on a monthly basis by all businesses. GSTR-4 must be submitted on a quarterly basis and GSTR-9 on an annual basis.

1. Details Of Outward Supply (GSTR-1)

Every registered taxable person is required to furnish details of outward supplies or sales according to Model GST law. This form contains details such as the name of the business, GSTIN no., return period, details of invoices, taxes paid, the name of the buyer, advances received against supply, outward sales invoices, etc.

2. Details Of Inward Supply (GSTR-2)

Every registered taxable person is required to furnish details of inward supplies or purchases according to Model GST law. This form is partially filled based on the GSTR-1 filed by the supplier. As the purchaser, you have to validate and make modifications (if necessary) to this pre-filled form (details of purchases and invoices on partial credit).

3. Monthly Return (GSTR-3)  

This is another pre-filled form based on the information provided in GSTR-1 and GSTR-2 that needs to be filed monthly. The taxpayer will have to validate and make modifications to the form. GSTR-3 contains details relating to ITC ledger, liability ledger and cash ledger, payment of tax (under the heads CGST, SGST and IGST) and any claims of refund (in case of excess payment).

4. Quarterly Return (GSTR-4)

Small taxpayers can opt for a composition scheme. A composition scheme enables a taxpayer to pay tax at a fixed rate, though the input tax credit facility would become unavailable to such a taxpayer. Any taxpayer that opts for this scheme has to file only GSTR-4 every quarterly or three months. The following details need to be furnished in this form: the total value of supply (in that 3-month period), payment of tax and a declaration of invoiced purchase details.

5. Annual Return (GSTR-9)

All normal taxpayers are required to file annual returns through GSTR-9. This form ensures transparency and visibility of the operations (transactions) of the taxpayer throughout the year. GSTR-9 records all incomes and expenditures of the taxpayer in the form of a detailed return listed in accordance with the monthly returns. Any mistakes in the reported earnings (supply-wise) can be rectified and this form has to be filed with the annual accounts (audited copies).

The GST Return Filing Process

If you are a seller:

  1. You must first file for GSTR-1 (for sales made) by the 10th of each month.
  2. The buyer views (and rectifies, if any) the sales made by you in GSTR-2A.
  3. The buyer then approves the sale made by you and files for GSTR-2 by the 15th of each month.
  4. If any modifications are made, you (the seller) can approve or reject the same in GSTR-1A.
  5. When both the seller and buyer approve of the forms, GSTR-3 is generated with the payment of taxes due by the 20th of each month.

Why File Returns?

It is important for all persons registered under GST to file returns under the new GST law. The return documents (outward and inward supplies, monthly returns, quarterly returns and annual returns) are required to be submitted electronically before the stipulated due date. The entire process of filing returns is pretty straight forward, transparent and negates the payment of double taxes. Not registered for GST yet? Register Now!

Role Of eSign In GST Returns

On the move towards making India a digital economy, GST payers are permitted to use eSign instead of wet (physical) signature. Businesses can entitle designated employees as authorized signatories whose eSign can be used to file GST returns on behalf of that business.

Since everything from signing documents to making payments would be done electronically, it would make filing GSTR more convenient and time-saving. To sign any document electronically using Aadhaar number, you can avail our eSign service. Explore more about eSign by visiting our portal now.

25 Apr, 17

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