GST Returns: The Definitive Guide

gst returns guide

GST is being rolled out this year, which is expected to make India a Tax Compliant Nation. However, one compliance that is going to hurt everyone is filing GST Returns. Seeing the number of returns to be filed, it doesn’t seem tax compliances are going to reduce in any manner. In this article, we will discuss the various types of GST Returns and why they could be an exertion.

GST : Background & Implementation

The Goods and Services (GST) Act has been a part of a lot of drama and debate. Heated debates, discussions in the parliament, media hypes and hidden political agenda are a few. But, after all this, it has finally paved its way towards implementation. There was widespread excitement about a new & simpler tax regime. After all, who doesn’t want a law that is less on compliance but hard on tax evaders. However, somehow this tax law works in the exact opposite manner. The way things appear right now, filing returns under GST is going to be an uphill task.

That’s true! The promise of ‘one nation, one tax’ and a hassle free tax regime seems to be a distant dream now. This tragedy isn’t new to our country! Successful legal ideas & laws are often imported from foreign countries. Then these laws undergo frequent modifications. All this is in the name of diversity in Indian markets. As a result, the new laws become complicated, losing the original idea somewhere along the way. This time it is the process of filing returns under GST.

Another recent example of such adversity is the Companies Act, 2013.  The motive behind this Act was to make the Companies Law simple but comprehensive.  The irony is that it’s now double the size of the earlier Act.

GST is no exception to this wrath of modifications. There are many potential difficulties. But, the one that is likely to be most hurtful is filing returns under GST.

Who Has to File GST Returns?

Filing returns under GST is mandatory for registered businesses. It doesn’t matter whether your business is active or not. This means that there is no threshold limit for filing returns. Registration is the only criteria.

What is more? Entities dealing in exempt/nil rated goods or services or export of goods & services also need to file returns. To summarize, everyone needs to file returns unless exempted from registration.

Some Rules for Filing GST Returns

  • No paper returns. This means that you can only file your returns online.
  • A dealer can either file returns himself or by authorized representative.
  • You cannot revise a return. This means that you have to adjust changes, if any, in subsequent returns only.
  • You need to file the same return for SGST, CGST and IGST. It will combine the details for all these taxes.
  • Return Forms, periodicity of filing and the due date of filing varies according to the type of dealers.

GST Returns: Purpose of Return & Due Date

General Cases (38 forms per year)

Every tax payer needs to file 3 returns every month and 1 return annually. The only exception is when the taxpayer comes under a special case.general cases-gst returns filing

Dealers who are liable to audit under Income Tax Act, also need to submit an annual special reconciliation statement. This statement shall be duly certified from a Chartered Accountant.

The ACES Portal provides details about the different return forms. The below analysis makes it simpler to understand the type and purpose of each form.

Multiple Registrations (38 form per year, per registration)

Entities with multiple registrations within a state for different business verticals need to file the above returns separately for each such registration.

Dealers Opting Composition Scheme (5 forms per year)

In case of dealers opting for Composition scheme, life is much simpler. They need to file returns every quarter, instead of every month. Further, instead of three, there is only form for filing the return. Apart from this, they also need to file an annual return.compounding dealers

Casual Tax Payers (3 forms for every month until expiry of registration)

Dealers registered as Casual tax payers need to file returns in GSTR – 1, 2 and 3. The process is similar to the return process of a regular taxpayer. They need to follow this process every month until the expiry of their registration. They also need to follow the specified due dates for filing returns.

Non-Resident Foreign Tax Payers (1 form per month until expiry of registration)

Non-Resident Foreign Tax Payers need to file returns until the expiry of their registration period.non resident tax payers-gst returns

Input Service Distributor (12 forms per year in addition to regular forms)

In case an entity forms or appoints a particular unit as Input Service Distributor, it needs to file another return. This is in addition to the returns that it files regularly.input service distributors-gst returns

Authorities Liable to Deduct TDS (12 forms per year in addition to regular forms)

GST law contains provisions for deduction of tax at source (TDS) by certain notified entities. For example, Government Departments, Local Authorities, Government Agencies, etc.

This can even apply to regular tax payers, subject to Government notifications. Such dealers are required to file a separate return in addition to returns currently being filed. They need to provide information about the Tax deducted at source.tax-deductor-gst-returns

E-Commerce Operators (14 forms per year)

GST law contains special provisions for E-Commerce operators. These entities also need to charge GST, collect it and pay it to the Government. Because of the special nature of their business, there is a separate form for them. They also need to file an Annual Return as well as a Reconciliation statement.e-commerce-operators-gst-returns

Entity Cancelling their Registration (1 special form)

This kind of compliance is unique to the GST law and new to India. In case an entity wants to or is ordered to cancel its registration, it needs to file a special last return.

Entities Having UIN (12 forms per year)

UIN stands for Unique Identity Number. It serves as aa special identity for Foreign Diplomatic Missions and embassies. These entities do not need to pay tax and receive refunds for any tax paid. Therefore, they need to file a special kind of return.UIN holder-gst returns

Takeaways

GST Returns are multiple, there is no single return. Besides, all invoices are also required to be uploaded on the GST portal. This entire procedure has to be done monthly. As off today, this doesn’t look like reduction in compliances.

The income tax department has improved its return forms and has made them simpler, even introduced one page returns for small tax payers. GSTN also needs to consider the same and reduce the length of returns, include automated calculations and combine returns to form simplified tax compliance procedure.

People often tend to take the road which is simpler. Similarly, tax compliance rate will be better, if the tax compliances are simpler. Hopefully, the return filing procedure will be improved over the time, however, till then, be in sync with your tax professional.

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