GST registration and GST Filing CA & Consultant in Pune, Mumbai 

GST stands for Goods and Services Tax. It is a value-added tax levied on most goods and services sold for domestic consumption. GST is collected at every stage of the supply chain, from production to final consumption, but the tax burden ultimately falls on the end consumer.

WHAT IS GOODS AND SERVICES TAX?

The constitution amendment bill for ‘GOODS AND SERVICE TAX’ (GST) was approved in the Parliament Session in August 2016 along with the confirmation by 50 percent of the state legislatures. Hence, all the existing indirect taxes levied by state and center were replaced with the proposed implementation of GST on 1st July 2017.

This move by the Government is the greatest tax reform since independence & is an added benefit to the Indian economy as it strives to eradicate the discrepancies of the existing tax structure & promotes single tax payment on the supply of all goods and services.

One of the much-awaited tax reforms to get launched in the Financial Year 2017-18, improving the ease of doing business for many micro and small businesses in India by reducing compliances. By incorporating multiple taxes into a single tax system, the complexities are bound to get reduced while the tax base would rise substantially.

Under the new GST process, all entities that are involved in buying or selling of goods or providing any services or both are required to obtain GST registration compulsorily. Entities without the registration of GST will not be permitted to collect GST from a customer or claim the input tax credit of GST paid. Also, the GST registration is mandatory once an entity crosses the minimum threshold turnover.

Most importantly, according to the GST Council, business entities situated in the Northeastern and hill states having an annual turnover of Rs.10 lakhs and above would be required to attain GST registration. For all the other business entities in the rest of India would be required to obtain GST registration, only if the annual turnover crosses Rs.20 lakhs.

Entities required to obtain GST registration as per the regulations must file for the registration within 30 days from the date on which the entity becomes liable for obtaining the GST registration. The average time taken to obtain GST registration is about 5 – 10 working days, subject to government processing time and submission of client documents.

• Unified Tax System: It replaces multiple indirect taxes, such as sales tax, VAT, excise duty, and service tax.
• Destination-Based Tax: GST is collected at the point of consumption rather than production.
• Input Tax Credit: Businesses can claim credit for the GST paid on inputs, reducing tax cascading.
• Broad Scope: It applies to nearly all goods and services, with a few exceptions.
• Transparent: It simplifies compliance and makes the tax system more transparent.

It is mandatory for a business entity that is currently registered under any of the existing tax regimes to move to GST law irrespective of the concerned threshold limits. The following central and state level tax regimes will end with the introduction of Goods and Service Tax (GST):

• Central Excise duty.
• Service Tax.
• State VAT.
• Central Sales Tax.
• Entry Tax.
• Entertainment and Amusement Tax (except when levied by the local bodies).
• Purchase Tax.
• State Surcharges and Cess if related to supply of goods and services.
• Taxes on lotteries, betting, and gambling.

What is Advantage of GST?

1. Tax rates are relatively lower as the tax base will increase substantially.
2. GST will eliminate the cascading effect of taxes.
3. The prices of the goods and services will reduce eventually.
4. GST will promote a shift from unorganized to organized sector.
5. A consistent flow of Input tax credit.
6. Effective & efficient supply chain management.

What Documents required to register GST?

1. A scanned photograph of the applicant.
2. The Constitution of the Taxpayer (Example – Partnership deed, Registration certificate etc).
3. The proof of principle address of business (Electricity bills, Rent Agreement).
4. Scanned copy of Bank account details.

What is GST Registration process?

• Log in to the online site i.e. the GST Portal (www.gst.gov.in).
• Fill Part-A of Form GST Registration form 1.
• Subsequently, the concerned person will receive a reference number for the application through SMS and via E-mail.
• Fill the second part of the form and upload the required documents according to the type of business an entity is engaged in.
• Certificate of registration is then issued by the department.
• Produce the documents within 7 working days along with GST REG-04.
• The officer may also happen to reject the application if he finds any errors. The same will be informed in form GST REG-05 of GST registration.

But if an assessee is not registered under any existing tax legislative then he is liable to register only if the aggregate turnover of his business in any financial year exceeds the threshold limit. The existing threshold limit specified by the GST council is 20 lakhs for all the states except for the North Eastern States where the limit is 10 lakhs.

GST returns are periodic filings that taxpayers registered under the Goods and Services Tax (GST) system must submit to report their business activities, such as sales, purchases, tax collected, and tax paid. Here are the key points about GST returns:

1. Types of GST Returns:

• GSTR-1:
  • For reporting outward supplies (sales).
  • Filed monthly or quarterly (under QRMP scheme).
• GSTR-3B:
  • A summary return for reporting tax liability and claiming input tax credit (ITC).
  • Filed monthly or quarterly.
• GSTR-2A/2B:
  • Auto-generated forms showing inward supplies (purchases) based on vendors' GSTR-1.
  • Used for reconciling ITC.

GSTR-4:

• For composition scheme taxpayers, filed annually.
• GSTR-5:
  • For non-resident taxpayers.
• GSTR-9:
  • Annual return summarizing the year’s transactions, filed by regular taxpayers.
• GSTR-10:
  • Final return filed upon cancellation of GST registration.

2. Filing Deadlines:

• Each return has a specific due date, typically within the following month. For example:
  • GSTR-1: 11th of the following month (for monthly filers).
  • GSTR-3B: 20th of the following month (for monthly filers).
  • Annual returns (GSTR-9): December 31st of the next financial year.
• Deadlines can vary based on state, turnover, or QRMP scheme eligibility.

3. Mandatory Compliance:

• GST returns are mandatory for all registered taxpayers, even if no business activity occurred (NIL return must be filed).

4. Importance of GST Returns:

• Tax Reconciliation: Ensures proper reconciliation of sales, purchases, and ITC.
• Avoid Penalties: Late filing attracts penalties (e.g., ₹50/day for GSTR-3B or GSTR-1).
• Input Tax Credit: ITC can only be claimed if suppliers file their returns properly.
• Business Transparency: Provides a clear record of financial transactions.

5. Late Fees and Penalties:

• Late filing incurs late fees and interest:
  • Late fee: ₹50 per day (₹20 for NIL returns).
  • Interest: 18% per annum on unpaid tax liability.

6. Common Challenges in Filing GST Returns:

• Reconciliation Issues: Mismatches between GSTR-2A/2B and purchase records.
• Errors in Data: Mistakes in invoice details or tax calculations.
• Multiple Returns: Regular taxpayers may need to file multiple returns in a month.
• ITC Restrictions: ITC can only be claimed if the supplier has filed their GSTR-1 and paid taxes.

7. Tips for Accurate GST Filing:

• Maintain proper invoice records.
• Reconcile purchase and sales data monthly.
• Ensure timely filing to avoid late fees.
• Use accounting software to automate and simplify filing.