GST Returns Overview
GST return is an official record that includes all the details of your purchase, sales, receipts, taxes on purchase (input tax), and taxes on sales (output tax). Once you file for a GST return or become a registered taxpayer you have to file this official record with the authorities that are in charge of tax administration. This official record calculates your tax liability.
Every individual or business owner who is dealing with industry and is a GST registered taxpayer can file for the GST returns. GST returns applicants can file GST as per the nature of their business or transactions. These business owners and dealers can be Regular Businesses, Business that is registered under any Composition Scheme, Auto-drafted Returns, different types of owners and dealers in the business sector.
The GST returns broadly include purchase and sales, and output GST and input GST. The GST returns are categorised under 13 different returns, namely The Goods and Services Tax Return 1 popularly known as GSTR-1, The Goods and Services Tax Return 3B or GSTR-3B, The Goods and Services Tax Return or simply GSTR-4, The Goods and Services Tax Return 5, that is abbreviated as GSTR-5, and many others. Different returns are applicable to different taxpayers on the basis of their obtained registration.
Types of GST returns
GSTR-1: The Goods and Services Tax Return 1 is a sales return document that needs to be registered by every GST registered person every month/quarter. Relevant details of sales & outward supplies need to be entered by the taxpayers in the GSTR 1 sales return. The due date for filing the GSTR 1 is 11th of the next month.
This document must contain all the sales and supply of goods and services that are made by a taxpayer for a specific tax period. This return does not include non resident taxpayers (foreign), vendors and Unique Identification Number. So this return is not applicable for this set of sections.
GSTR-3B: The GSTR-3B is a self-declared inward and outward supplies summary of GST return, that needs to be filed every month. This was an initiative from the government of India to introduce consolidated summary return of inward and outward supplies, in order to relax business requirements. The due date for filing the GSTR-3B is the 20th of next month.
In GSTR-3B the taxpayers summaries sales figures, ITC claimed and net tax payable. For GST registered taxpayers a separate GSTR-3B must be filed. If you file a GSTR-3B once, it can not be revised. GST registered taxpayers can file GSTR-3B however it is not applicable for Composition Scheme taxpayers, distributors of input services, Non-resident taxable persons.
GSTR-4: The Goods and Services Tax Return 4 is a document that is filed by the registered taxpayers once every 3 months. It is applicable for the composition vendors meaning those registered taxpayers who have signed for the composition scheme under Section 10 of the CGST Act. The due date for filing the GSTR-4 is the 30th of the month succeeding a financial year.
GSTR-5: The Goods and Services Tax Return 5 is a document return that is applicable for all the non-resident taxpayers. This statement needs to be filed by every non-resident taxable person who is affiliated with business transactions in India. The registered Non-resident person has to file the details regarding their business period in which they carry out their outward & inward supplies. The due date for filing the GSTR-5 is the 20th of next month.
You can file for this return from any online centre or from any other tax facilitation centre. For GSTR-5 filing one needs to be a foreign taxpayer without any kind of business settlement in India. Such non-resident foreign taxpayers need temporary GST registration for their business period.
Advantages of GST Returns Filing
Filing Goods and Services Tax returns is important for all the GST registered taxpayers, it is a necessary requirement for every business that is registered in India. It is a statement or document containing all transaction details of a business during a particular period. There are various advantages of filing GST returns, some of them are mentioned below:
Avoid Penalties and late fee: Filing Goods and Services Tax returns helps in avoiding different troubles that a taxpayer faces. Registered taxpayers should always file GST returns on time otherwise they can face late fees and penalties. Filing GST returns on time can save you from paying penalties.
Input Tax Credit Claim: only after filing for GST return one can claim for the Input Tax Credit on the GST paid purchase. This credit acts as a helping hand in reducing the tax liability of a GST registered taxpayer, but this can only be done when one file GST return on time.
Transparency: Filing for GST return can help a business to achieve transparency in business transactions. GST returns are transparent medium thus it helps in preventing a business from errors.
Tracking Performance: it’s only with the filing of the GST returns, business can track it’s day to day performance. GST returns are responsible for providing sales and purchase summaries. A business can track its performance that is made during a specific period with the help of GST returns.
Legal Protection: GST returns filing can act as a legal protector for a business. It provides safety to your business and ensures the business is complying with the law and needs to be protected from any kind of legal issues that can arise in the near future.
Reliability: GST returns can help you in achieving reliability in the market. Filing GST on time will help a business to achieve creditworthiness that is very important for a business. It can help in achieving trustworthy performance and increases the chances of obtaining credits from different financial sectors.
Smooth Operations: Filing GST returns ease the business operations, and help in smooth functioning of the business. The benefit of filing GST returns on time can help businesses in avoiding unnecessary stress from rush and different errors.
Audit Risk Reduction: Regular filing benefit in the reduction of audit risk. Filing GST returns on time can save a business from unnecessary audits from tax authorities. It helps in reducing the wastage of money, time and efforts on unnecessary audit risk processes.
Business Expansion: Another great advantage of GST return filing is that it helps in the expansion of the business. Its record transactions can help a business to make a successful business baseline and can help in framing future business decisions. It also helps in making investment decisions and expansion plans that can help a business in the long run.
GST Cancellation: in order to avoid the risk of GST cancellation, one needs to file GST returns on the time. If a GST registered taxpayer does not pay GST returns for a period of 6 months, the GST department has the power to cancel the registration of the taxpayers.
Avoid GST Department Notice: a GST registered taxpayer can get notice of defaults from the GST Department in case of irregularity in filing of GST returns. GST returns help the GST department in keeping a track record of the taxpayers, so one must fill GST returns on time to avoid GST notice.
Filing Goods and Services Tax returns is a legal requirement and provides different types of advantages for GST registered Taxpayers. It helps businesses in avoiding levy of interest, and also helps against GST cancellation. It also minimizes the business risk and notices from the GST department. The GST regime has made the mode of tax payment easy with online tax filing of GST returns. This on-time manner of tax filing also delivers the accountability of the taxpayers.
Which type of GST Return is applicable for non-resident taxpayers?
The Goods and Services Tax Return 5 or GSTR-5 is a document return that is applicable for all the non-resident taxpayers.
What are the different advantages of GST return filing?
The different advantages of GST return filing are Input Tax Credit Claim, Tracking Performance, Legal Protection, Reliability, Smooth Operations, Business Expansion and much more.
How does a GST return filing help in avoiding audit risk?
Filing GST returns on time can save a business from unnecessary audits from tax authorities.
How can a GST filing help a taxpayer claim credit?
Only after filing for GST return one can claim for the Input Tax Credit on the GST paid purchase.
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