The GST Procedure and Various Filing Forms in India!

 The GST Procedure and Various Filing Forms in India!

GST has been brought in the country to expand tax-base, remove multiplicity of taxes, bring uniformity in indirect taxation and help improve the economy by transforming the country into one single market. However, to achieve the desired results, it is extremely important that there is a tracking mechanism and a systematic way of implementing the new rules and regulations.

Having said that, it is a policy decision that cannot be applicable to every financial transaction. Hence there was a need to identify the transactions that should be covered under the new tax regime for maximum impact instead of wasting precious resources on unnecessary paperwork and supervision.

Therefore, the GST council decided to bring each and every business with an annual turnover of Rs. 20 lakhs and more under the domain of GST. This is also due to the reason that only individuals or enterprises with such a turnover contribute significantly in the entire indirect taxation process and the remaining ones aren't big enough to be considered in the current economic scenario

Once an organization finds itself to be eligible to fall under GST regime, it needs to register itself so as to be able to follow the required legal guidelines and submit necessary financial transactions in the prescribed forms and format.

Let's understand who all need to register themselves under GST within 30 days after finding themselves eligible for the same.

Rs. 20 lakhs or more turnover in a financial year (Rs. 10 lakhs for Special Category States)

If a business is registered and is then transferred to someone else, the transferee shall need to register with effect from the date of transfer

Everyone who in involved in inter-state supply of goods/services

Casual Taxable Person: If you supply goods/services as an agent or principal or any other capacity in a territory where GST is applicable and you don't have a fixed place of business in such a place, as per GST you'll be considered as a casual taxable person and need to be registered under GST

Non-resident Taxable Person: Similar to above, except that if you don't have a place of business in India, you will be considered non-resident taxable person and need to register under GST

Agents of a supplier

Those paying tax under reverse charge mechanism

Input service aggregator

E-commerce operator or aggregator

Anyone supplying via e-commerce aggregator

The entities who must apply for a GST registration are:

Service Providers

Traders

Manufacturers

Dealers

Private, Partnership, Proprietorship Firms

Managing Trusts

Shop-owners

Following is the registration procedure for new traders to apply for GST

RETURN FILING PROCEDURES UNDER GST

There are total 11 forms provided for filing GST returns, for different businesses. Filings of returns is online and all taxes can also be paid online through a common GST filing portal. Draft for return purpose is as follows:

GSTR-1-Sales Register

It is the most prominent GST. All the goods and services suppliers will report their outward supplies during the reporting month. All registered taxable persons are required to file GSTR-1 by the 10th of the following month. It is the first or the starting point for passing input tax credits to the dealers.

This is how the form looks like

GSTR-2-Purchase Register

It contains details of all the purchases transactions of a registered dealer for a month. It will also include purchases on which reverse charge applies. The GSTR-2 filed by a registered dealer is used by the government to check with the sellers GSTR-1 for buyer-seller reconciliation.

GSTR-3-Monthly Return Form

It is a monthly return with the summarized details of sales, purchases, sales during the month along with the amount of GST liability. This return is auto-generated pulling information from GSTR-1 and GSTR-2.

This is how the form looks like:

GSTR-4-Quarterly Return for Compounding Dealer

This needs to be filed once every 3 months by registered tax payers who have signed up for the composition scheme (those who opt for this scheme are known as compounding vendors or dealers). They would be required to pay taxes at fixed rate without any input tax credit facilities.

This is how the form looks like:

GSTR-5-Return file by the Non-Resident

Non-Resident foreign taxpayers (special cases under GST Registration) are those suppliers who have come for a short period to make supplies in India without having any business establishments here. Products are normally imported to make local supplies. Therefore, they will be allowed to avail Input Tax Credit only on IGST paid on imports. However, other taxpayers can take credit for supplies made by them and filed in Form GSTR 5.

This is how the form looks like:

GSTR-6-Return for Input Service Distributor)

GSTR 6 is a monthly return that has to be filed by an Input Service Distributor (ISD). It contains details o Input Tax Credit (ITC) received by an Input Service Distributor and distribution of ITC Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs. GSTR 6 ha to be filed by every ISD even if it is a nil return.

This is how the form looks like:

GSTR-7-TDS Return

GSTR 7 is the return that has to be filed by every tax deductor about tax deducted at source. Deduct

is required to file the return and has to provide the detail of amount of TDS in his return. When deductor pays the amount of TDS, it shall get reflected into the credit ledger of the deductee. The deductee shall claim credit, in his electronic cash ledger, of the tax deducted by the deductor.

This is how the form looks like:

GSTR-8-Annual Return

Every e-commerce operator, who is required to collect tax at source (TCS) under GST, shall furnish a statement in GSTR 8 electronically through the common portal. This return shall contain the details of supplies effected through e-commerce operator and the amount of tax collected on supplies.

This is how the from looks like:

GSTR-9

This return has to be filed by every registered taxable person and it is considered as the annual return to be filed under GST. A taxable person registered as a composition dealer shall submit such annual returns in Form GSTR-9A. Also, every registered individual with an annual turnover of Rs. 1 crore and above need to get their accounts audited. Such business entities shall furnish audited annual accounts and reconciliation statement, duly certified under Form GSTR-9B.

GSTR-10

Any business entity that voluntarily ceases to do business or closes it down under orders from competent authorities are expected to file this return.

This is how from look like:

GSTR-11

Any individual, who has been issued a Unique Identity Number (UIN) and claims a refund of the taxes paid on his inward supplies need to furnish details of taxable goods/services under this form. It has to be furnished by the 28th of the month following the month when the supply was received.

This is how the form looks like:

Image Source: Cleartax.com

PAYMENT PROCEDURE UNDER GST

This is a major breakthrough that GST tax payment can be done electronically, which reduces paperwork to a great deal. At single point, GSTN challan is generated. Payment mode can be as per the choice of the tax payer.

The choices are:

Online banking, Credit cards, Debit cards, NEFT/RTGS or through cash or check deposited in Bank.

One need to keep in mind that adhering to filling and submitting the required forms as per the requirements is a must under the GST law and it needs to be followed not due to fear, but for the fact that it is not only good for the business, but also for the nation's economy!

How to File GST Return!

While India is heading towards its biggest tax reforms ever, there are many systems being put in place for maintenance of records and filing the returns. This is giving birth to a destination based tax-reporting structure. In the current system, every transaction has to be reported through the last mile with a common invoice, identifiable to the seller and recipient of goods and services.

The GST Council and the Ministry of Finance have come up with a great solution to record all such invoices in one place and collate data for the taxpayer. The processes have been simplified, and many taxes have been removed. The whole nation shall report using the same structure irrespective of where and how you carry your business.

Nearly 1 crore business entities have registered under GST since the date it became effective, l.e. on 1" July, 2017. This makes it mandatory for each and every one of them to file GST returns as per the GST return due date schedule notified by the concerned authorities. GST return filing is compulsory for all businesses registered under GST irrespective of any business activity, sales or profits. Therefore, even if a business entity has been dormant, but has GST registration, it is mandated to file GST return!

A widespread IT system has been deployed by the ministry to cope up with such a huge influx of data. It is called the GSTN (Goods and Service Tax Network) that will house all the information of sellers and buyers together, collaborate the details submitted and even maintain 3 registers for you for future reference and anytime reconciliation. GSTN has been designed in such a manner that each and every transaction is in sync with each other and records the complete chain of transactions between the buyer and the seller.

To file GST under the latest GST regime is crucial and non-compliances or delays, if caused, can lead to penalties, fines and flaw-full book maintenance. Whereas timely compliance will help to maintain flawless records and get timely refunds.

To file a GST return there are various procedures for various businesses and individuals. Typically aGST return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability.

Under GST, a registered dealer has to file GST returns that includes:

★ Purchases

★ Sales

Output GST (On sales)

Input tax credit (GST paid on purchases)

To file GST returns, GST compliant sales and purchase invoices are required. None of the invoices cannot be missed. Therefore proper documentation and preserving every single piece of record is of utmost importance.

Now, GST returns can be filled under different forms as stipulated by the guidelines and depending on which category the taxpayer falls into.

We will understand how to file GST returns basis different forms as follows:

1. GSTR-1: This is the most important return to be filed that comprises of all outward supplies of goods and services in detail. It has to be filed by all taxable registered persons under the GST except those,

who are mandated to file different GST return forms based on the category they fall into. It has to be filled by the 10 of the next month and will form the basis of all future flow and match for credit reconciliations. After going through the required information and getting ready with the checklist about the information required, one need to log in to the GSTN portal with their user id and password. After

that, following steps need to be followed to file the returns: Search for "Services" and then click on Returns, followed by Dashboard

★Here, the taxpayer has to enter the financial year and the month for which return needs to be filed.

Click on Search after that

The screen will display all the returns related to the concerned time period

★Select GSTR 1 from the options given

★ Next step is to choose the option between either prepare online or upload the return

After filling the entire form, click on submit and validate the data filled up

★ After validating data, click on File GSTR-1 and go for either E-Sign or sign the form digitally

★ Once you acknowledge to submit the form, an Acknowledgment Reference Number (ARN) will be generated

Have a closer look:

Returns

Monthly Returns

Annual Returns

Misc Returns

Normal

Outward Detail:

GSTR-1 & 1A (10th of next month)

Inward Details

GSTR-2 & 2A (15th of next month)

Monthly Return

GSTR-3 120 of next month)

Other Astestee

Penalties: Outward/Inward/Monthly Returns:

INR 100 per day

upto maximum INR 5,000/-

2. GSTR-2: While GSTR-1 is for the suppliers, GSTR-2 is for the recipients. It consists of all the inward supplies of goods and services towards the recipient. It has to be filed by the 15th of the next month As this form is filled after suppliers fill GSTR-1, those details are auto-filled in the form. Everyone registered under GST need to fill up this form including those who have filed GSTR-1. However, there are exceptions, which include input service distributors, non-resident taxable individuals under GST.

those registered under compounding scheme, tax deductors and e-commerce operators. They need to fill different forms.

Once you have all the information, you can log in to the GSTN portal using the user id and password. The form will be auto-populated with information from Form GSTR-1, GSTR-5, GSTR-6, GSTR-7 and the details of tax collected at source furnished by an e-commerce regulator.

After that, enter the details as required under 13 subheads and finally sign off with a declaration that all information has been supplied and is correct.

3. GSTR-3: This form is auto-prepared by the 20 of the next month. It comprises of complete information of all inward and outward supplies of goods and services as updated in GSTR-1 and GSTR-2. This form helps to determine your input tax credit availability or the amount of tax payable after going through the entire details of GSTR-1 & GSTR-2. You can submit this form after logging in the GSTN portal with the username and password. Apart from the auto-prepared information, you need to fill up Part B that requires any details regarding any taxes, interests, penalties or fees pald during the period and any refunds claimed during the period w.r.t. cash ledger.

4. GSTR-4A & 4:GSTR-4A is auto-generated quarterly for the composition scheme taxpayers. Based on this information, the tax payer needs to update all outward supplies. It has to be filed quarterly and the due date is 18 of the next month. The process shall be the same of logging in to the GSTN portal and following the guidelines mentioned there.

Here is how it works:

Returns

Monthly Returns

Annual Returns

Mise Returns

Notice for Non-Eiling

GSTR-JA

Final Return

GSTR-10 of cancellation order) (within

Inward Supplies by UIN tipider

Months123

TRP

GSTR-11 of nex monthi

TRP-1 to TRP-7

5. GSTR-5: Thisform needs to befilled before 20 of the next month or within 7days from the date of surrender or expiration of the registration. GSTN portal has clear guidelines to help submit the form with ease.

6. GSTR-6A & 6: GSTR-6A shall be generated by 11 of the next month, a day after GSTR-1 is filed by the suppliers. It will consist of all the details of the inwards supplier made to the input service distributor (ISD). Once ISD has verified or corrected such details, GSTR-6 will be generated that needs to be filed by 13th of the next month. For all such filing needs GSTN portal is the way to go.

7. GSTR-7 & 7A: This form has to be filed to update all tax deductions during the month. Due date for filing this form is 10th of the next month. After this is updated, a TDS certificate, GSTR-7A will be auto-generated and shall be available for the assessees to download and to keep a track of.

8. GSTR-8: This form has to be filled by the e-commerce seller. It includes all the supplies made as well as the amount of tax collected. This needs to be filed by the 10% of the next month. GSTN portal has a clear cut path to help you follow the guidelines and submit the form conveniently.

9. GSTR-9: This is an annual return to be filed by all the taxpayers by 31 December of the coming financial year. This comprises of the entire 12 GSTR-3 of the tax payers. Once you login to the GSTN portal with the given username and password, apart from submitting the required details, you also need to submit amount of tax paid during the year and include details of any exports or imports.

Returns

Monthly Returns

Annual Returns

Misc. Returns

Normal

GSTR-9 (31 Dec. of next FYJ

Composite Dealer

GSTR-9A (31 Dec. of next FY)

Audit Report

GSTR-98 (with Annual Return If Total T/O 1 cr. in the FY)

Penalties: Annual Returns:

INR 100 per day

upto maximum 0.25% of aggregate turnover

No Specific Due date mentioned

The best part about the entire GST regime is that the portal automatically puts together all the information across different forms on a real time basis. However, the most important step in the entire process is filing GSTR-1, which forms the basis of the entire activity.

WHO ARE THE PEOPLE WHO ARE REQUIRED TO FILE GST?

In the GST regime, any regular business or individual generating a turnover of 20 lakhs and above is liable to file GST returns. Such businesses have to file three monthly returns and one annual return. This amounts to 37 returns in a year. The benefit of the system is that one has to manually enter details of one monthly return -GSTR-1. The other two returns-GSTR 2 & 3 will get auto-populated by deriving information from GSTR-1 filed by you and your vendors.

It has to be kept in mind that extreme discipline has to be maintained when it comes to meeting the deadlines to fill the forms and submit them, not only to avoid penalties, but also to avail tax credits on time. For the benefit of the taxpayers, the entire GSTN portal has been kept simple and easy to understand as well as provides a seamless comprising of data so that the entire information can be accessed without any complications.

What are GST Non-Compliance Penalties and Appeals!

The GST law has clearly defined descriptions of offenses and the penalties levied in each scenario. This is Important information for all business owners, CAs and Tax Professionals as an inadvertent mistake can cause severe consequences

In this article, we cover the following topics

Overview

Offences and Penalties

Inspection Under GST

Search and Seizure Under GST

Goods in Transit

Compounding of Offences Under GST

Prosecution Under GST

Arrest Under GST

 Appeals

Overview

To prevent tax evasion and corruption, GST has brought in strict provisions for offenders regarding penalties, prosecution, and amest

OFFENCES AND PENALTIES

Offences

There are 21 offenses under GST, We have mentioned a few here. For the entire list of 21 offenses please go to our main article on offenses.

The major offenses under GST are:

Not registering under GST, even though required by law. (Read our article for the list of those who have to register mandatorily under GST)

Supply of any goods/services without any invoice or issuing a false invoice.

The issue of invoices by a taxable person using the GSTIN of another bona fide taxpayer.

Submission of false information while registering under GST.

Submission of fake financial records/documents or files, or fake returns to evade tax.

Obtaining refunds by fraud.

Deliberate suppression of sales to evade tax.

Opting for composition scheme even though a taxpayer is ineligible.

Penalty

If any of the offenses are committed then a penalty will have to be paid under GST. The principles on which these penalties are based are also mentioned by law.

1. For Late Filing

Late filing attracts penalty called late fee. The late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. The maximum is Rs. 5,000. There is no late fee on IGST in case of delayed filing

Along with late fee, interest has to be paid at 18% per annum. It has to be calculated by the taxpayer on the tax to be paid. The time period will be from the next day of filing to the date of payment.

2. For Not Filing

If you don't file any GST return then subsequent returns cannot be filed. For example, if GSTR-2 return of August is not filed then the next return GSTR-3 and subsequent returns of September cannot be filed. Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty (see below).

3. For The 21 Offenses With No Intention of Fraud or Tax Evasion

An offender not paying tax or making short payments must pay a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000.

Consideration: In case tax has not been paid or a short payment is made, a minimum penalty of Rs 10,000 has to be paid. The maximum penalty is 10% of the tax unpaid.

4. For The 21 Offenses With The Intention of Fraud or Tax Evasion

An offender has to pay a penalty amount of tax evaded/short deducted etc., i.e., 100% penalty, subject to a minimum of Rs. 10,000.

Additional penalties are as follows:

Tax Amount Involved

Jail Term

Fine

100-200 lakhs

Upto 1 year

200-500 lakhs

Upto 3 years

Above 500 lakhs

Upto 5 year

In all three cases

Cases of fraud also face penalties, prosecution, and arrest.

Inspection Under GST

The Joint Commissioner of SGST/CGST (or a higher officer) may have reasons to believe that in order to evade tax, a person has suppressed any transaction or claimed excess input tax credit etc. Then the Joint Commissioner can authorize any other officer of CGST/SGST (in writing) to inspect places of business of the suspected evader.

Search & Seizure Under GST

The Joint Commissioner of SGST/CGST can order for a search. He will order a search on the basis of results of inspection (or other reason) if he has reasons to believe:

There are goods which might be confiscated:

Any documents or books or other things which are hidden somewhere. Such items can be useful during proceedings.

Such incriminating goods and documents can be seized.

Goods in Transit

The person in charge of a vehicle carrying goods exceeding Rs. 50,000 is required to carry the following documents:

Invoice or bill of supply or delivery challan

Copy of e-way bill (hard copy or via RFID)

The proper officer has the power to intercept goods in transit and inspect the goods and the documents.

If the goods are in contravention to the GST Act then the goods, related documents, and the vehicle carrying them will be seized. The goods will be released only on payment of tax and penalty.

Before confiscating the goods, the tax officer shall give an option of paying a fine instead of confiscation.

Compounding of Offences Under GST

Compounding of offenses is a shortcut method to avoid litigation. In case of prosecution for an offense in a criminal court, the accused has to appear before the Magistrate at every hearing through an advocate. This becomes expensive and time-consuming

In compounding, the accused is not required to appear personally and can be discharged on payment of compounding fee which cannot be more than the maximum fine as applicable under GST.

Compounding will save time and money. However, compounding under GST is not available for cases where the value involved exceeds 1 crore.

Prosecution Under GST

The prosecution is conducting of legal proceedings against someone in respect of a criminal charge.

A person committing an offense with the deliberate intention of fraud, becomes liable to prosecution under GST, i.e., face criminal charges. A few examples of these offenses are:

 Issue of an invoice without supplying any goods/services thus taking input credit or refund by fraud

 Obtaining refund of any CGST/SGST by fraud.

Submitting fake financial records/documents or files, and fake returns to evade tax.

Helping another person to commit fraud under GST.

Arrest Under GST

If the Commissioner of CGST/SGST believes a person has committed a certain offense he can be arrested under GST by any authorized CGST/SGST officer (click here for the list of offenses for which one can be arrested).

The arrested person will be informed of the grounds for his arrest. He will appear before the magistrate within 24 hours in case of a cognizable offense (Cognizable offenses are those where the police can arrest a person without an arrest warrant. They are serious crimes like murder, robbery, counterfeiting).

Appeals

A person unhappy with any decision or order passed against him under GST can appeal against such decision.

The first appeal against an order by an adjudicating authority goes to the First Appellate Authority.

If the taxpayer is not happy with the decision of the First Appellate Authority they can appeal to the National Appellate Tribunal, then to the High Court, and finally to the Supreme Court.

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