GST is a comprehensive indirect tax system that has brought uniformity and efficiency to the tax system in India. The GST process fundamentally comprises uploading invoice level details in the common portal, calculation and payment of tax, and electronic filing of returns. Input tax credit, which forms the backbone of this mechanism, is monitored through the auto-population of the information related to the credit, matching the invoices, and the auto-reversal of input tax credit in case of a mismatch. As all aspects related to GST, including registration, payment of taxes, and filing of returns, are available online for the taxpayer, compliance is easier and more transparent. The uniformity in the tax structures has eased financial activities and improved businesses. The returns process helps taxpayers file returns, calculate and pay taxes, and avail input tax credits.
All regular taxpayers are required to furnish monthly, quarterly, and annual returns as per GST. There are separate returns for taxpayers registered under the composition scheme, non-resident taxpayers, input service distributors, taxpayers who deduct or collect taxes (TDS, TCS) under Sections 51 and 52, and persons with UIN, depending on the nature of their business and type of registration in GST. To ease compliance, the GST council has notified that small businesses with an annual aggregate turnover of up to 1.5 crores can file returns of outward supplies in GSTR-1 on a quarterly basis instead of monthly.
Methods of filing returns
It is mandatory for all registered taxpayers to file returns before the due date specified under the law. The taxpayer is liable to pay late fees, interest, and other legal consequences for non-filing or delayed filing of GST returns. The taxpayers must file all their returns online on the common portal provided by the government. They can file the returns using the following methods:
- GSTN portal in www.gst.gov.in
- Offline option provided by GSTN
- GST Suvidha Providers (GSPs)
Also Read: GST Return Filing-Types of Returns and Process of Filing
Types of returns
GST returns are of different types, depending on the nature of the business. The returns can be monthly, quarterly, or annual. The returns consist of invoice-level details of all the financial transactions of the business entity during the tax period, like sales, purchases, and input tax credits. Based on these details, the system calculates the tax liability of the taxpayer by adjusting the input tax credit. The taxpayer must pay the tax thus calculated before filing the return. The tax that the supplier pays for the purchase of raw materials that are used in the business is called input tax credit. These are the main types of returns in GST:
Return name | Details | Type of taxpayer filing | Due date for filing the return |
GSTR-1 | Statement of outward supplies of goods and services or both | Normal registered taxpayer | 10th of succeeding month |
GSTR-2A
| Statement of inward supplies of goods and services or both. It is read-only and auto-populated with the details filed by the suppliers in their GSTR-1 | Normal registered taxpayer | 15th of succeeding month |
GSTR-2B
| Auto-drafted ITC statement of taxpayer based on the details furnished by the supplier in his or her GSTR-1 | Normal registered taxpayer | 15th of succeeding month |
GSTR-3B | Self-declaration summary statement containing details of all outward supplies made, input tax credit claimed, and taxes paid.
| Normal registered taxpayer | 20th of succeeding month |
GSTR-4 | Statement containing invoice-wise, state-wise details of inward supplies and consolidated details of outward supplies made. Taxes must be paid through Form CMP-08 every quarter. It is an annual return. | Taxpayers registered under the composition scheme | 18th of the month succeeding the quarter for filing CMP-08. GSTR-4: April of the following financial year |
GSTR-5 | Statement of all outward supplies made, inward supplies received, credit and debit notes, tax liability, and tax paid, filed monthly by non-resident taxpayers. | Non-resident taxpayers | 20th of the month succeeding tax period and within 7days after expiry of registration |
GSTR-5A | Statement of transactions made by OIDAR services from outside India to non-taxable online recipient in India | Supplier of OIDAR services | 20th of the next month |
GSTR-6 | Statement of input tax credit received and distributed by ISDs that input service distributors must file every month | Input service distributors | 13th of subsequent month |
GSTR-7 | A return containing details of tax deducted, TDS liability payable and paid, and TDS refund claimed, if any, must be filed by tax deductors. | Tax deductors | 10th of the subsequent month. |
GSTR-8 | Returns filed by e-commerce operators containing details of supplies made through the e-commerce platform every month | e-commerce operators | 10th of the subsequent month |
GSTR-9 | Annal return containing details of | All registered persons other than ISD, TDS, TCS taxpayers, casual taxable persons, non-resident taxpayers, and persons paying TDS under Section 51 of CGST Act. | 31st December of the subsequent Financial Year |
GSTR-9A | Statement containing details of composition taxpayers must submit. It contains details of outward supplies, inward supplies, taxes paid, refund claimed, and ITC availed or reversed | Taxpayers who have opted for composition scheme | 31st December of the next Financial Year |
GSTR-9C | Reconciliation statement of all registered businesses whose aggregate annual turnover exceeded Rs 2 crore in the preceding financial year. It must be filed annually | Businesses whose aggregate annual turnover exceeded Rs. 2 crores in the preceding financial year | 31st December of the next Financial Year |
GSTR-10 | Final return that must be submitted by taxpayers who have cancelled their GST registration. It is a statement of stocks held by the taxpayer immediately before cancellation | Taxable persons whose GST registration is surrendered or cancelled | Within three months of the date of cancellation or the date of order of cancellation, whichever is later |
GSTR-11 | Return containing details of inward supplies to be furnished by persons having UIN | Taxable persons with UIN or persons opting for compulsory levy | 31st December of next Financial Year |
Modifications or revisions of returns
The GST returns cannot be modified or revised after filing. The taxpayer has to incorporate the rectification of errors and omissions in the subsequent returns. But they cannot rectify it after filing the return for the month of September following the end of the financial year to which the details are applicable or after furnishing the annual return, whichever is earlier.
Late fees, interest, and other penalties
If the taxpayers do not file the applicable GST return within the due date, they are liable to pay a late fee of Rs. 100/-, i.e., Rs. 50/- for CGST and Rs. 50/- for SGST per day (up to a maximum of Rs. 5,000/-), from the due date to the date when they file the returns.
GSTR filing process
GSTR-1———->GSTR-2A—————>GSTR-2B———–>GSTR-1A———->GSTR-3B
(Seller files GSTR-1 for the sale.) —>(Buyer views the sale made in GSTR-2A)–> (Buyer approves the sale made when the details furnished are correct in GSTR-2B)–> (when there is mismatch in the details filed by seller, buyer gets the details modified and files the GSTR-1A )–> (After buyer and seller approve, GSTR-3B is generated with the payment of taxes.)
seller sees in GSTR-1A,
GSTR-2) and approves or disapproves.
Input tax credit
Input tax credit (ITC) is the tax that the registered taxpayer can claim on the purchases procured and utilized for his business as a supplier of goods and services. The important conditions for availing of ITC are:
- Valid documentary evidence
- Receipt of goods and services
- Supplier’s compliance with GST regulations
- Auto-populated details in GSTR-2A and 2B and filing of returns.
- The taxpayers should pay their vendors within 180 days from the invoice date
- ITC should not be blocked or ineligible
- The taxpayer can avail the ITC within the time limit (30 November of the subsequent year or the date of annual return, whichever is earlier)
- In case the ITC claimed exceeds the GST output tax liability, taxpayers can avail the balance ITC during the subsequent financial years without any time limit.
- In the case of export-rated supplies, taxpayers can claim a refund of the accumulated ITC.
The importance of GSTR-2A and GSTR-2B reconciliation
GSTR-2A and GSTR-2B are system-generated forms that provide details of purchases and input tax credit. While GSTR-2A is a dynamic system-generated return that is updated on a real-time basis as per the information that the suppliers and other counterparties furnish in their respective GST returns, GSTR-2B is a static system-generated form in which the details are auto-generated based on the information that the suppliers provide in their GST returns. It gets generated on the 14th of the next month.
The taxpayer can claim only the ITC of a particular invoice reflected in his GSTR-2B. Therefore, GSTR-2B is considered the basis for computing the eligible ITC in GSTR-3B. The invoices that the suppliers furnish in their GSTR-1 will reflect in the GSTR-2A and GSTR-2B of the taxpayer based on the date the supplier files his GSTR-1. If the supplier files his GSTR-1 on or before its due date, his invoices will reflect both in GSTR-2A and GSTR-2B. But if he files the invoices after the due date, they will reflect in the taxpayer’s GSTR-2A the same month, but they will reflect in his GSR-2B in the next month.
The details of every inward supply of the taxpayer (recipient) in GSTR-2B must match with the corresponding outward supply details furnished by the supplier in his valid return. A return is considered a valid return only when the taxpayer pays the GST in full. If the ITC claimed by the recipient is more than the tax declared by the supplier, or if there is duplication of the ITC claim, the taxpayer will get a notification from the tax authorities regarding the difference. If the discrepancy is not rectified, then the excess ITC claimed will be added to the output tax liability of the recipient in the subsequent month. The taxpayer is also liable to pay interest on the excess ITC claimed.
Therefore, reconciliation of GSTR-2A and GSTR-2B is very important. During reconciliation, if the taxpayer notices the discrepancies, he can contact the supplier and instruct him to rectify them and file the GSTR-1 on time. This way, the taxpayer can ensure that his working capital is not blocked.
Conclusion
We can summarize that filing returns is an important component of GST compliance, and the taxpayer must be well informed about the types of returns and the procedure to file the returns accurately and on time. Before filing the returns, the taxpayers must do regular reconciliations and ensure that the invoice details match. By doing so, they can get the discrepancies rectified by following up with the counterparties. Filing accurate returns on time helps to avoid notices and other penalties, as well as the blocking of their working capital.
Frequently asked questions
What is the difference between GSTR-1 and GSTR-3B?
Answer: GSTR-1 is a sales return with details of outward supplies, whereas GSTR-3B contains both inward and outward supplies and is a summary return for tax payments.
What is the difference between GSTR-1 and GSTR-2B?
Answer: GSTR-1 is a return that consists of details of the outward supplies that the taxpayer must file monthly or quarterly. GSTR-2B is an auto-populated ITC return consisting of purchase details of recipient based on the details furnished by the supplier.
