Entrepreneurs had to make infrastructural changes to accommodate the Goods and Services Tax when it was introduced in India in 2017. The new law came with new compliance requirements and businesses had to hire GST consulting services to register themselves with the designated authority. The tax reform introduced several new types of GST returns that had to be filed by eligible taxpayers. The new system to conduct the return filing procedure is online and was initially beset by teething troubles. There are no or minimum issues with the system now but the compliance burden of most enterprises has increased. Most of them have to file monthly, quarterly, or annual returns depending on the nature of their operations. Recently the government modified the regulation and composition scheme users do not need to file quarterly returns now. The return filing process has become complex though and in this article, we are presenting useful information about all the return forms.
What Are GST Returns?
A return is a formal statement declaring the income of a taxpayer to the relevant authority. GST returns contain information about sales, purchases, tax collected on sales and those paid on purchases. These documents help in assessing the tax paid by an entity and the input tax credit claimed by a taxpayer. All eligible businesses have to get the goods and service tax registration and must file all the applicable returns electronically.
What Are The Different Types Of GST Returns?
Following are the different GST returns that must be filed by taxpayers:
The GSTR-1 is a monthly statement which must be furnished by all normal and casual registered taxpayers making outward supplies of goods and services. The return contains information about all outward supplies made by a business or an individual. Anyone having an annual turnover of up to Rs. 1.5 Crore has to file the return on a quarterly basis. The form must be filed even if the taxpaying entity was not involved in any business activity during the tax period.
All taxpayers have to declare their summary GST liabilities for a specified tax period through the GSTR-3B form. The GSTR-1 and GSTR-3B have to be filed by all taxpayers for each tax period. Nil returns must be filed if there is no business activity during the specified period. The last due date for submitting the form is the 20th of each month unless the Commissioner issues a notification to extend the date.
The GSTR-4A form is automatically created using the data from Form GSTR-1 or 5 and Form GSTR-7. No modifications can be made to this form as it is a read-only document. Composition dealers had to file quarterly returns through Form GST-4 which auto-populated the GSTR-4A form. The GST Council recently ended the need for quarterly returns by composition scheme users meaning that the GST-4 is inoperational at present.
All non-resident eligible taxpaying entities must use the Form GSTR-5 in case they do not wish to claim the Input Tax Credit (ITC) on local procurements. They will have to use the services of a GST registration consultant or conduct the process themselves to incorporate themselves as normal taxpayers and file Form GSTR-1/3B if they want to avail the ITC.
The next entry on our list of types of GST returns is Form GSTR-6. This return is to be filed only by those taxpayers who have registered themselves as Input Service Distributors. It is a mandatory monthly return which must be filed even if the taxpayer is not involved in any business activity during the specified period.
All companies or individuals deducting TDS under GST have to file the GSTR-7 return. All central as well as state government departments, have to file the return. Form GSTR-7 needs to be submitted by local authorities, all government agencies and any person or body notified by the Government on the GST Council’s recommendation.
E-commerce operators have to furnish details of the tax collected at source by them on outward supplies of goods or services through their digital platform. They have to use the Form GSTR-8 for his purpose. The due date for filing this return is the 10th of each month. No late fee is levied on late return filing but interest will be charged in such cases.
An annual return including the consolidated details of SGST, CGST, and IGST paid during the year by the taxpayer must be furnished in a financial year. The Form GSTR-9 must be used to file the annual return by all taxpayers who file GSTR-1,2, and 3. E-commerce operators who file GSTR 8 need to file GSTR 9B while taxpayers with an annual turnover exceeding Rs. 2 crores are required to file GSTR 9C.
Anyone whose GST registration has either been canceled or surrendered must file a final return through Form GSTR-10. This includes the details of the stocks held by such people on the day immediately preceding the date from which cancellation came into effect.
The Form GSTR-11 must be filed by persons who have been issued a Unique Identity Number (UIN). This number is assigned to foreign diplomatic missions and embassies who are not liable for paying taxes in Indian territory. This return must be submitted on a quarterly basis. Assessees are not required to file the return for a period during which they did not receive any inward supplies.
Entrepreneurs must be aware of all the different types of GST returns in order to be able to fulfill their compliance requirements on time. This will be helpful in efficiently running their business and minimizing the chances of legal troubles.