A GST return contains all the details of sales, purchases, tax collected on sales and tax paid on purchases that need to be filed compulsorily by all registered taxpayers. Once you file GST returns, you will need to pay the resulting tax liability i.e money that you owe the government.
The details of sales and purchases of the goods and services plus the tax paid and collected have to be furnished by all registered individuals, traders, organizations, and companies. Such details are submitted by online GST return filing and on the basis of this, the tax authorities calculate tax liability.
Who should file a GST return?
Under the GST Regime, all registered dealers are required to file the return irrespective of the type of business or turnover or profitability during the return filing period. Even a dormant business that has obtained registration under GST must do an online GST return filing.
Two monthly returns and one annual return are to be filed by a regular business having more than Rs.5 crore GST filing as annual aggregate turnover which amounts to 26 returns in a year. The number of GST filings varies for quarterly GSTR-1 filers which are 9 in a year, including the GSTR-3B and annual return. There are separate GST returns required to be filed in special cases, like for composition dealers who have to carry out online GST return filing 5 times a year.
Importance of GST return filing
1. Late Fees
Late fees will be levied on the taxpayer if he/she fails to file the returns on time. As per the GST Law, the late fee is Rs.100 for each day for each Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST). Thus, the total fine amount will be Rs.200 per day with a maximum of Rs.5,000. However, this is subject to changes as notified by the government.
2. Restrictions in filing subsequent returns
In case the taxpayer is not filing the GST returns then the subsequent returns cannot be filed. For instance, a new rule 59(6) has been inserted which gives restrictions in filing GSTR – 1 if GSTR – 3B has not been filed. The GSTR-1 return filing facility will be blocked for taxpayers who have not filed GSTR-3B for the previous two return periods.
3. Simple Return Filing process
The entire process of GST return filing is online via the portal created by the authorities. It requires a list of receipts, invoices, and bills to be kept handy. The process is easy to understand and follow, given that the business or the entrepreneur is first registered for GST.
4. Unified Platform
GST is a multi-stage and destination-based tax framework that has supplanted several indirect taxes in the country, such as VAT, service tax, and excise duty, thus providing a unified platform of Indirect tax framework all over India.
5. Intention of fraud or tax evasion
An offender who is not paying taxes or is making short payments must pay a penalty of 10% of the amount of tax due subject to a minimum of Rs.10,000. Hence, to avoid heavy penalties it is better to get online GST return filing done on time as it will also lead to a cascading effect.
6. Lesser compliance
The government has reduced the complexity of tax filing for businesses to a great extent by combining various taxes into a single tax GST. Under the previous tax regime, businesses had to file multiple returns accorded with different indirect taxes – VAT, excise, and service tax. As GST is a unified and singular tax regime, the number of filings has come down, making it less hassle for entities to file a return.