GST return filing for Startups in India – forms, process, due dates, documents, fees

It’s a known fact that GST was launched in the year 2017 with the prime objective to abolish the problems existing with the older laws under VAT, CST, and Service Tax that included problems such as double taxation, cascading effect, multiple taxes on the same Assessee and above all a long list of compliances. It came out as a one-stop solution for all these problems by offering a uniform tax structure to the assesses on a countrywide level for businesses dealing either in the manufacture of goods or provision of services for “Ease of Doing Business” to businesses, to budding entrepreneurs and appealing foreign investors to set up their business units in India. Therefore, every eligible applicant shall get himself mandatorily registered under the Act and obtain a unique GST identification number provided with the GST registration certificate and shall be quoted wherever required.

Under the applicable GST provisions, the following are the person required to get themselves registered under the Act-

i. Normal Registration– Business Dealers/Entities holding a turnover of above Rs.40 Lakhs (in states other than specified states) and Rs. 20 lakhs (supply of goods/services in normal state), Rs.20 lakhs (supply of goods in specified states) or Rs. 10 Lakhs (Supply of goods/services specific states) and above would be required to register under GST.

ii. Composite Taxable Person-Business dealers/entities who do not wish to opt for registration under the normal scheme and have chosen “Composite Taxation Scheme” under GST.

iii. Mandatory Registration- However, a certain person does not have the choice between normal and composition scheme, and needs to mandatorily get themselves registered under GST regardless of the level of their business turnover. It includes persons like Casual taxable persons, Non-resident Taxable persons, E-commerce operators, etc.

iv. Voluntary Registration– Further, businesses may opt voluntarily to get themselves registered under GST to avail of the benefits offered under the GST regardless of not meeting the turnover requirements.

GST Return Filling Online

After a business dealer gets itself registered under GST, he becomes eligible for compliance procedures which are to be fulfilled from time to time and returns filled from time to time.

But what is GST return? A GST return is an official document that prescribes all the particulars related to a business with details such as sales & purchases including the tax payments made on purchases and tax collections made on sales, etc. that includes details of business entities or individual dealers or supplies made periodically. The importance of GST returns lies in the fact that allows businesses to intimate GST authorities about their tax liability and make payments through the online dedicated portal of GST.

Therefore, all the businesses registered on the GST portal (businesses holding dormant status on the GST portal) are required to file & submit their returns periodically (quarterly, monthly, or annually) regardless of the level of their profits for the business.

The online dedicated GST portal provides for separate returns for each category of the taxpayer for which there are twenty-two GST forms out of which eleven forms of active, eight view only forms and three of them stand suspended that depend on the taxpayer. Now, that we have a basic idea of what GST returns in India, let’s know a little further about GST returns in India.

Types of GST returns with due dates

Before reading further about the various kinds of GST returns, it is necessary to understand the different types of taxpayers under the GST returns that includes-

i. GST normal taxpayers

ii. Composition dealers

iii. TDS deductors

iv. Non-resident taxpayers

v. Input Service Distributor (ISDs)

vi. Casual taxable persons

vii. E-commerce operators

Under the GST regime, the following returns are required to be filed-

Advantages of Filing GST Returns

i. Avoid Penalty & Prosecution

Any failure on the part of the taxpayer to file and submit a GST return on time shall lead to a hefty sum of penalty and prosecution from GST authorities.

ii. Benefit of Input Tax Credit (ITC)

The GST portal was launched to encourage businesses in India by reducing their costs of production for them by introducing the concept of Input Tax Credit through which the tax paid on the output could be reduced from the amount of taxes paid and to further refund the outstanding amount to the manufacturer. However, ITC could only be obtained by businesses/individuals registered under GST by filing GST returns.

iii. Simple, Faster & Timely process

Unlike in the pre-GST era, where the process of tax returns filling was complex and tedious, it has been replaced by the online GST portal that has been especially offered for taxpayers to afford them convenience through its simple, customer-friendly, and efficient portal ultimately benefitting smaller businesses and start-ups.

iv. Legal Recognition for Businesses-

The main objectives behind the implementation of GST were to rule out the unorganized sector by encouraging organization and to increase the tax base in the taxation system. Accordingly, in the last two years, there has been more than a 50% increase in the number of taxpayers including registrations and compliance fulfilments, and further to claim Input Tax Credits.

v. Better Credit Availability

Timely tax payments and regularly filling GST returns help an assessee to have clean records while seeking loans from a bank or financial institution based on which the taxpayer’s credibility is verified.

Documents Required for GST Filing

Provided below is the list of documents that must be submitted with the GST returns-

i. List of all invoices issued to business dealers/individuals registered under GST and possesses a valid GSTIN along with the particulars as provided below-

• Details like invoice ref number, date of supply, the value of GST, applicable GST rates, etc.
• Relevant Place of Supply
• Applicable tax (IGST, CGST, and SGST/UTGST applicable) along with the GST cess;
• Applicability of the Reverse Charge etc.

ii. List of all invoices issued to unregistered persons where the value of invoice exceeds Rs. 2.5 lakhs along with uploading of invoices whose value exceeds Rs. 2.5 Lakh rupees including details such as invoice number, date, tax value, applicable tax rate, place of supply, etc.

iii. Details related to the collective intra and inter-state sales along with the applicable tax rates.

iv. Details of bills related to the export of bills specifying details such GSTIN, Invoice details along with the date, shipping bills, total taxable value, applicable GST rates, amount of taxes (IGST, CGST, SGST, or where GST cess) as applicable.

v. A Summary of all the documents issued along (if any) issued with any other documents such as a debit note, credit note, advance receipt, and amendments during the applicable tax period.

Online Process for GST Filing

Now, if you are wondering how you should file and submit your GST returns, it is a simple and hassle-free process for filling GST Returns that is facilitated with the network provided by the Goods and Services Tax Network (GSTN), which will auto-populate these forms. Provided below is the step-by-step process for filling GST Returns online-

Step 1. Log on to the GST portal by accessing the website (www.gst.gov.in) and in case you are not registered under GST, then complete the registration process after which you will be allotted a 15-digit GST identification number (GSTIN) based on the details submitted such as state code, PAN number, etc.

Step 2. Once you get registered, log in to the GST portal and start scanning and uploading your invoices and for each of them, a separate reference number will be generated.

Step 3. In the next step, fill details related to the outward and inward returns and cumulative returns and in case there are any mistakes in the invoice changes could be made till this point.

Step 4.  File outward supply of returns in form GSTR-1 using the information section on the GST Common Portal either on or before the 10^th of each month. Such outward supplies furnished by the supplier will be received from the GSTR-2A form.

Step 6. Next, the recipient shall be required to verify and match details of the outward supplies with inward supplies and also file details related to debit/credit notes.

Step 7. Further, supply details related to inward supplies of the goods and services in the prescribed return GSTR-2.

Step 8. Supplier may choose to accept or reject details provided for the inward supplies that could be viewed under GSTR-1A.

But, what if the taxpayer failed to include any entry or forgot to rectify an error? Can it be revised again after submission? Once submitted a GST return cannot be revised but the missed entry or information could be contained in the return for the existing period.

GST Penalties & Prosecution

If the assessee fails to submit GSTR returns on time or in case of continuous defaults, his name may be entered in the list of tax payment defaulters and he will be prosecuted accordingly. Not only this, any failure to file and submit GST return within the due dates along with such extended dates as notified by the Ministry from time to time, shall be regarded as a non-compliance and shall attract penalty for which there are four categories-

i. Late fees for failure to file non-annual GST returns

ii. Late fees for failure to file annual GST returns

iii. Late fees for filing No returns in the Financial year

iv. Additional Interest on late fees

i. Late fees for failure to file non-annual GST returns

Where the taxpayer fails to file GST returns within the due date, he shall be liable for a late fee beyond the due date that will be levied as Rs.100 per day under the CGST Act along with Rs. 100 per day under UTGST/SGST Act till the return is filed i.e. Rs.200 per day for each default up to a maximum limit of Rs.5000/-

ii. Late fees for failure to file annual GST returns

Further, where a taxpayer assessee fails to file the annual GST returns till the due date, he shall be fined a late fee per day beyond the due date of Rs.100 per day under the CGST Act & Rs.100 per day under the SGST/UTGST Act i.e. a total of INR 200 per day till the date of filing annual returns. However, the maximum amount of late fee cannot exceed 0.25% of the aggregate annual turnover of the assessee for the financial year.

iii. Late fees for filing NO return in the financial year

As provided before, the assessee must file a GST return regardless of the tax liability of the assessee for the concerned period. If there is zero tax liability applicable, the assessee must file GST return with zero tax liability within the stipulated period. Any failure on the part of the assessee to file a tax return may result in the levy of a late fee of Rs.50 per Act on a per-day basis till the return is filed.

iv. Additional Interest on late fees

Where an assessee has failed to submit GST returns on time, in addition to the late fee he will also be subject to a penal interest rate of 18% per annum for the period of such default. He will be required to pay such interest at the time of making payment for late fees which is calculated for the default period from the due date of filing return and the date of actually filling the return.

How to Check Status of GST Returns?

Following steps are to be followed to check the status of the GST returns online on the GST portal-

i. Log on to the online portal by accessing the website (https://www.gst.gov.in/.)

ii. Enter log-in details on the main page.

iii. Move to the main page and click Services and select ‘Returns’.

iv. Next, select ‘Track Returns ‘and further select “Status of Return.”

v. Click the Search button and you will be able to see the status as –

• TO BE FILED ;
• SUBMITTED BUT NOT FILLED ;
• FILED- VALID ;
• FILED-INVALID.

Finally, Filling GST returns during the time of its launch in 2017 was proving to be a tedious and laborious job. But, the government of India has simplified the process of filing returns under its “Ease of Doing Business” scheme. Once you understand the various kinds of GST returns to be filed, the process of filling a GST rerun becomes a smooth ride. So, go for filling your simplified return today!

Conclusion

Therefore, for businesses and individuals registered under GST, it is compulsory to file GST returns periodically within their due dates, and missing any deadline may result in heavy fines along with the levy of interest. Whereas, filing GST returns on time will have benefits for the business. But, it is to be noted that important fillings such as GST returns must be prepared with caution with expert guidance having years of experience and knowledge regarding the same. Go file your GST returns today!