What is a GST Return?

A GST return is a document that contains details of income that a taxpayer must file with the tax administrative authorities. This document is used by tax authorities to calculate the tax liability of a taxpayer. Under GST, a registered dealer has to file GST returns that include:

• Purchases
• Sales
• Output GST (on sales)
• Input tax credit (GST paid on purchases)

Filing GST returns is mandatory for all entities having GST registration, irrespective of their business activity or turnover.

Types of GST Returns

There are several types of GST returns that businesses need to be aware of. These returns differ based on the nature of the taxpayer and the frequency of filing. Here are the primary types:

1. GSTR-1: This return is for outward supplies of goods or services. It contains details of all sales transactions made by the taxpayer and is filed monthly.

2. GSTR-2A: This is a read-only return that auto-populates the details of inward supplies (purchases) made by the taxpayer. It is generated based on the suppliers' GSTR-1.

3. GSTR-2B: Another auto-drafted return, GSTR-2B, provides a static ITC statement for a particular period.

4. GSTR-3B: This is a summary return of outward and inward supplies. It helps in the monthly payment of GST and is a self-declaration return filed monthly.

5. GSTR-4: This return is for composition scheme taxpayers, who have opted for the composition scheme under GST. It is filed annually, with a quarterly payment of taxes.

6. GSTR-5: Filed by non-resident foreign taxpayers who conduct business transactions in India, this return is submitted monthly.

7. GSTR-6: This return is for input service distributors (ISD) and contains details of the ITC received and distributed by ISD. It is filed monthly.

8. GSTR-7: This return is for authorities deducting tax at source (TDS) under GST. It contains details of TDS deductions and is filed monthly.

9. GSTR-8: Filed by e-commerce operators who collect tax at source (TCS), this return contains details of TCS and is filed monthly.

10. GSTR-9: This is an annual return filed by regular taxpayers. It consolidates information from the monthly and quarterly returns filed during the year.

11. GSTR-9A: Filed by composition scheme taxpayers, this is an annual return consolidating details from their quarterly returns.

12. GSTR-9C: This is a reconciliation statement filed by taxpayers with an annual turnover exceeding ₹2 crores, along with their annual return (GSTR-9).

13. GSTR-10: Filed by taxpayers whose GST registration has been canceled or surrendered, this final return is submitted once.

14. GSTR-11: This return is for Unique Identification Number (UIN) holders, like embassies and UN bodies, to claim refunds on GST paid on their purchases.

How to File GST Returns

Filing GST returns can be done online through the GST portal. Here’s a step-by-step guide to filing the common returns:

Step 1: Log in to the GST Portal

• Visit the GST portal (www.gst.gov.in).
• Use your GSTIN (GST Identification Number) and password to log in.

Step 2: Navigate to Return Dashboard

• Once logged in, click on the ‘Services’ tab.
• Select ‘Returns Dashboard’ from the dropdown menu.

Step 3: Select the Financial Year and Return Filing Period

• Choose the appropriate financial year and the return filing period (monthly/quarterly/annually).

Step 4: Prepare the Return

• Based on the type of return, you will need to prepare it by entering the required details. For example, for GSTR-1, you will need to enter details of outward supplies.

Step 5: Upload the Invoices

• Upload the relevant invoices. The system will auto-populate certain details based on these uploads.

Step 6: Verify Details

• Verify the details entered and correct any discrepancies.

Step 7: Submit the Return

• Once verified, submit the return. For certain returns, you will need to sign the return using a digital signature certificate (DSC) or an electronic verification code (EVC).

Step 8: Pay GST Liability

• After submitting the return, you need to pay any GST liability using the online payment options available on the portal.

Step 9: File the Return

• After payment, you can file the return. Once filed, an acknowledgment reference number (ARN) will be generated as proof of submission.

Importance of Timely GST Return Filing

Timely filing of GST returns is crucial for several reasons:

1. Avoid Penalties: Non-filing or late filing of GST returns attracts penalties and late fees. This can increase the tax liability significantly.

2. Input Tax Credit: Regular filing ensures that you can claim input tax credit on your purchases, reducing your overall tax liability.

3. Compliance Rating: The GST compliance rating of a business is affected by timely return filing. A good rating can enhance the reputation of a business.

4. Legal Compliance: Regular filing ensures that the business complies with the GST law, avoiding any legal hassles.

Challenges in GST Return Filing

Despite the streamlined process, businesses face several challenges in GST return filing:

1. Complexity: Understanding the various types of returns and the specific details required can be complex, especially for small businesses.

2. Technical Issues: The GST portal sometimes faces technical glitches, making it difficult to file returns on time.

3. Invoice Matching: Ensuring that all invoices match correctly with suppliers' returns can be challenging, leading to discrepancies.

4. Frequent Changes: The GST law and rules are frequently updated, requiring businesses to stay continually informed to ensure compliance.

Tips for Efficient GST Return Filing

To make the process smoother, businesses can follow these tips:

1. Maintain Proper Records: Keep all purchase and sales invoices well-organized and up-to-date.

2. Regular Reconciliation: Regularly reconcile your records with the GSTR-2A to avoid discrepancies.

3. Stay Updated: Keep abreast of the latest changes in GST laws and rules to ensure compliance.

4. Use Software: Utilize GST return filing software to automate and streamline the process.

5. Seek Professional Help: If the process seems too complex, seek help from a GST consultant or a chartered accountant.

Conclusion

GST return filing is an essential aspect of GST compliance that every registered taxpayer must adhere to. Understanding the different types of returns and the correct procedure for filing them is crucial for smooth and timely compliance. Despite the challenges, maintaining accurate records, regular reconciliation, and staying updated with the latest rules can help businesses file their GST returns efficiently. Leveraging technology and professional assistance can further simplify the process, ensuring that businesses meet their tax obligations without any hassle.