GST filing is the process of preparing an official document that includes information related to purchases and sales of goods and services of a business unit (a Company, firm, OPC, etc) for a particular financial year. This is required by tax authorities to calculate the net tax liability of the businessmen, while in turn, the businessman applies for a refund over tax paid on goods and services.
GST was chiefly introduced to acquire transparency in the operations of every business, so that disparities in income would not happen and inflation could be controlled. It is a single tax and has replaced the imposition of several other taxes like excise duty, customs duty, sales tax, etc.
In GST return, information relating to the operations such as purchase, sale, and tax thereon are prepared from different sources of documents and filed on the Government of India Goods and Services Tax Portal.
Benefits of Filing a GST Return:
- Regular payment of Tax: Taxpaying process becomes easy to understand and regular. With the filing of tax, entities find it easy to show how much is their regular income and how much they owe to the tax authorities. Business entities find it easy to pay timely tax with GST returns.
- Weakens fear in paying tax: Services like online payment of tax and applying for return have assured the taxpayers to move forward in their business with less fear of money thefts.
- No bias for unorganized entities: Business entities that are not registered or are not following the rules prescribed by the government can also get the service of GST filing.
Types of GST returns
- GSTR-1: - It includes outward supplies of goods and services of the business and should be filed monthly, on the 11th day of the succeeding month.
- GSTR-2: - It contains inward supplies of the business for claiming Input Tax Credit. It also should be filed monthly, but on the 15th day of the succeeding month.
- GSTR 2A- It is a read only document. It enables the recipient to verify the details uploaded by the supplier in GSTR 1.
- GSTR-3B: - It includes net sales and purchases given in GSTR1 and R2 and the amount to be paid as tax. It should be filed monthly on the 20th day of the next month.
- GSTR-4: - Annual return of the Composition taxable person. It includes the form CMP-08 which is a statement –cum-challan that provides the summary of the tax assessed for a quarter.
- GSTR-5: - Non-resident person files his return monthly, on the 20th day of the succeeding month.
- GSTR-6: - Input Service Distributor files his return monthly, on the 13th day of the next month.
- GSTR-7: - Higher authorities dealing with tax deduction at the source file their return monthly, on the next month’s 10th day.
- GSTR-8: - Supplies of the e-commerce operators and the tax collected therein. It is filed monthly, on next month’s 10th day.
- GSTR-9&9C: - Taxpayers file their return annually, on 31st December under form 9, whereas the taxpayers to whom Audit applies, need to file form 9C to submit the reconciliation statement.
- 9 ITC (DRC-03): This is a Voluntary Tax Form. In this form, tax is paid voluntarily by the taxpayer due to tax short-fall notice issued by the GST department.
- GSTR-10: - Final return for taxable persons whose GST registration has been cancelled. It is done once either within 3 months of the date of cancellation or the cancellation order appearing earlier.
11. GSTR-11: - Details of inwards of Persons with Unique Identification Number file their return monthly, on the 28th of the month after the month for which statement was filed.
There are three ways by which a business owner opts to file his GST return.
- Monthly basis
- Quarterly basis
- Yearly basis
It depends upon the nature of business, i.e., small, medium, and large, that what type of filing/return would an individual file.
Persons who should file GST return
Normally, a business entity whose annual turnover happens to be more than Rs 20 lakhs and is a registered Taxpayer under the Goods and Services Tax system can file his return.
In addition to this, persons dealing in the following activities should file the return:
- Have generated sales in a particular period.
- Involved in purchases to the business.
- Have paid tax on sales.
- Paid Input Tax Credit (tax on purchases).