Filing GST returns is a mandatory requirement for all registered businesses under the GST Act. GST returns are documents that contain the details of all sales and purchases of goods and services, as well as the tax collected and paid by the taxpayers. Depending on the type and turnover of the business, different types of GST returns have to be filed monthly, quarterly or annually.
However, filing GST returns can be a complex and tedious process, especially if the taxpayers are not aware of the rules and regulations, deadlines and documents required. To avoid any errors or penalties, it is advisable to follow a checklist of items before filing GST returns. Here are some of the important points to keep in mind while filing monthly GST returns in India:
1. Reconcile outward supplies disclosed in books and return
The first step before filing GST returns is to reconcile the differences between the outward supplies disclosed in the return filed for the previous financial year and the books of accounts. This is to ensure that there is no mismatch or omission of any invoice or transaction that may affect the tax liability or input tax credit (ITC) claim. Any discrepancy should be rectified by issuing debit notes or credit notes, or by amending the return in the subsequent months.
2. Verify inward supplies and claim ITC correctly
The next step is to verify the inward supplies or purchases made from registered suppliers and claim ITC correctly. ITC is the tax paid on inputs used for making taxable supplies, which can be adjusted against the output tax liability. However, ITC can only be claimed if certain conditions are met, such as:
- The supplier has issued a valid tax invoice and uploaded it on the GST portal.
- The recipient has received the goods or services and paid the supplier within 180 days.
- The recipient has filed GSTR-3B and GSTR-2A/2B returns.
- The recipient has maintained proper records and documents to support the ITC claim.
Therefore, it is important to check the eligibility and availability of ITC before claiming it in the GST return. Any excess or ineligible ITC claimed may result in interest and penalty.
3. Choose the appropriate return form and frequency
Depending on the type and turnover of the business, different types of GST return forms have to be filed. For example, regular taxpayers with an annual aggregate turnover of more than Rs. 5 crores have to file GSTR-1 (outward supplies) monthly and GSTR-3B (summary of outward and inward supplies) monthly. However, regular taxpayers with an annual aggregate turnover of up to Rs. 5 crores can opt for the Quarterly Return Filing and Monthly Payment (QRMP) scheme, under which they have to file GSTR-1 quarterly and GSTR-3B quarterly, but pay tax every month using PMT-06 challan.
Similarly, there are different return forms for other categories of taxpayers, such as composition dealers (GSTR-4), non-resident taxable persons (GSTR-5), input service distributors (GSTR-6), e-commerce operators (GSTR-8) etc. Therefore, it is essential to choose the appropriate return form and frequency based on the nature and size of the business.
4. File returns within the due dates
Another important point to keep in mind while filing GST returns is to file them within the due dates prescribed by the GST law. Failing to do so may attract late fees, interest and penalty. The due dates for filing different types of GST returns vary depending on the type and turnover of the business. For example, for regular taxpayers with an annual aggregate turnover of more than Rs. 5 crores, the due date for filing GSTR-1 is 11th of every month and for filing GSTR-3B is 20th of every month. However, for regular taxpayers with an annual aggregate turnover of up to Rs. 5 crores who opt for QRMP scheme, the due date for filing GSTR-1 is 13th of every month following the quarter and for filing GSTR-3B is 22nd or 24th of every month following the quarter. Therefore, it is advisable to keep track of the latest notifications and circulars issued by the GST authorities regarding the due dates for filing GST returns.
5. Prepare and maintain proper records and documents
The last but not the least point to keep in mind while filing GST returns is to prepare and maintain proper records and documents to support the information furnished in the returns. The GST law requires the taxpayers to keep and preserve various records and documents, such as:
- Tax invoices, bills of supply, debit notes, credit notes, delivery challans etc.
- Books of accounts, ledgers, journals, vouchers etc.
- Returns, statements, reports, notices etc.
- Any other documents as prescribed by the GST law or rules¹
These records and documents should be kept at the principal place of business or any additional place of business for at least six years from the date of filing of annual return. These records and documents may be required for verification or audit by the GST authorities at any time. Therefore, it is important to prepare and maintain proper records and documents to ensure compliance and avoid any litigation or penalty.
Conclusion
Filing GST returns is a crucial aspect of GST compliance for all registered businesses under the GST Act. However, filing GST returns can be a challenging task if the taxpayers are not aware of the rules and regulations, deadlines and documents required. To make the process easier and hassle-free, it is advisable to follow a checklist of items before filing GST returns. Some of the important points to keep in mind while filing monthly GST returns in India are:
- Reconcile outward supplies disclosed in books and return
- Verify inward supplies and claim ITC correctly
- Choose the appropriate return form and frequency
- File returns within the due dates
- Prepare and maintain proper records and documents
By following these points, taxpayers can file their GST returns accurately and timely, and avoid any errors or penalties.
Source: Conversation with Bing
enaca.in 