Every individual or business entity registered under the GST Act is required to periodically submit the details of their sales and purchases along with the corresponding tax collected and paid. This process is done through filing online GST returns. Filing returns is mandatory to ensure tax compliance and accurate reporting. However, it is crucial to ensure that the payment of the due tax is made before filing the return, as failure to do so renders the return invalid. GST returns act as a means for businesses to regularly report their GST transactions to the tax authorities, ensuring transparency in the tax collection process.
How to File GST Return?
GST returns can be filed in different forms, depending on the nature of the transaction and the type of GST registration the taxpayer holds. Various GST return forms are applicable to different types of taxpayers, including normal taxpayers, composition scheme taxpayers, and others. Below are the primary GST return forms for normal taxpayers and their due dates:
- Monthly Details of Outward Supplies (Sales):
- Filed in Form GSTR-1 by the 10th of the next month.
- This form contains details of all the outward supplies made during the month.
- Monthly Details of Inward Supplies (Purchases):
- Filed in Form GSTR-2 by the 15th of the next month.
- This form includes details of inward supplies received, enabling the taxpayer to claim input tax credit.
- Monthly Return and Payment of Tax Due:
- Filed in Form GSTR-3 by the 20th of the next month.
- This form consolidates the details of both outward and inward supplies, along with the tax payment made for the period.
- Annual Return:
- Filed in Form GSTR-9 by the 31st of December of the next financial year.
- This is an annual summary of the GST activities for the entire financial year, including details of sales, purchases, tax paid, and input tax credit claimed.
Who Should File GST Returns?
Every entity that is registered under GST is required to file GST returns. This includes businesses, individuals, and organizations engaged in taxable activities. Even if there are no transactions during a particular return period, a NIL return must still be filed. Failure to submit a return, whether NIL or otherwise, can lead to penalties or the suspension of GST registration. Hence, regular and timely filing of GST returns is essential for compliance under the GST regime.
Tenure of Filing GST Returns
The frequency of filing GST returns depends on the type of registration and the nature of the transactions. Different filing periods are applicable based on the type of taxpayer:
- Monthly Filing: This applies to regular taxpayers, foreign non-residents, input service distributors (ISD), tax deductors, and e-commerce operators. These entities must file their GST returns on a monthly basis to report their sales, purchases, and tax liabilities.
- Quarterly Filing: This is applicable to composition taxpayers, who are required to file returns every quarter. Composition taxpayers typically deal with smaller businesses, and the quarterly return allows them to streamline the filing process.
What is GSTR-1 Return?
The GSTR-1 return is a key form that captures the details of outward supplies, or sales of goods and services, made by a taxpayer. It provides a comprehensive record of sales transactions for the month and is essential for calculating the tax liability. The GSTR-1 return form includes the following information:
- Basic Details: This section captures information such as the business name, GSTIN (Goods and Services Tax Identification Number), and the period for which the return is being filed.
- Invoice Details: It includes details of all invoices issued in the previous month, specifying the tax payable for each transaction. This ensures accurate reporting of outward supplies and helps reconcile sales data with the buyer’s records.
- Advances Received: Any advances received for supplies that are to be made in the future must also be reported in GSTR-1. This allows for the tracking of future taxable transactions and the corresponding tax liability.
What is GSTR-2 Return?
The GSTR-2 return contains details of the inward supplies or purchases of goods and services made by the taxpayer. GSTR-2 is auto-populated based on the GSTR-1 filed by the suppliers. As a buyer, you simply need to validate this pre-filled information and make necessary modifications if required. For example, if you purchase goods from a supplier, the supplier will file GSTR-1, which includes your details as the buyer. This information will then be reflected in your GSTR-2 return, allowing you to review and confirm the details of your purchases.
What is GSTR-3B Return?
GSTR-3B is a simplified summary return that combines information from both GSTR-1 and GSTR-2. It provides an overview of the taxpayer’s sales and purchases for the month. Like GSTR-2, GSTR-3B is pre-filled based on the data from GSTR-1 and GSTR-2, requiring you to validate and make any necessary corrections. The GSTR-3B form includes the following details:
- Information about input tax credit (ITC) ledger, cash ledger, and liability ledger.
- Details of the tax payments made under various tax heads such as CGST, SGST, and IGST.
GSTR-3B must be filed monthly, and the payment of tax should be completed before filing this return.
What is GST Quarterly Return (GSTR-4)?
Taxpayers with a turnover of up to Rs. 75 lakhs have the option to opt for the Composition Scheme under GST. Taxpayers who choose this scheme are required to pay taxes at a fixed rate depending on the nature of their business—2% for manufacturers, 5% for the restaurant sector, and 1% for other suppliers. However, they are not eligible to claim input tax credit.
Taxpayers under the Composition Scheme are required to file a simplified quarterly return called GSTR-4. This return captures basic information, such as:
- The total value of consolidated supplies made during the return period.
- Details of the tax payments made during the return period.
- Supplier-wise invoice details for purchases made.
What is GST Annual Return? (GSTR-9)
The GST Annual Return (GSTR-9) is a mandatory filing for all normal taxpayers under the Goods and Services Tax (GST) regime. This return is designed to provide comprehensive visibility into the taxpayer’s activities over the financial year. GSTR-9 consolidates the details reported in the monthly and quarterly returns, offering a complete picture of income, expenditure, and tax liabilities.
The annual return captures detailed information about all transactions, including sales and purchases, and categorizes them according to the monthly returns previously filed. One significant advantage of submitting GSTR-9 is that it allows taxpayers to identify and correct any discrepancies or short reporting of activities that may have occurred throughout the year. This opportunity for self-correction helps ensure compliance and accurate tax reporting.
The due date for filing GSTR-9 is 31st December of the year following the end of the financial year being reported. Taxpayers are required to file the annual return along with the audited copies of their annual accounts, ensuring that the reported figures are verified and accurate. This process not only enhances transparency but also aids in maintaining the integrity of the GST system.