GST Return Filing – What is GST Return Filing, Due Dates, Penalties and Types

Persons Any person or business registered under the GST scheme of India must file GST returns on either a monthly or quarterly basis as a part of the legal requirement. GST return filing is done to report one’s income and calculate the taxes you owe to the government.

What is a GST Return?

A GST return is a document that contains the details of any registered taxpayer/business’s business transactions. Typically, GST returns summarise business finances for a specified period, whether monthly, quarterly, or annually.

Based on these GST returns, the total tax amounts the business is leviable to pay to the government are derived.

Key Components of a GST Return

Sales

The GST return filing lists down the details of all sales made by the business during the reporting period. This includes taxable supplies of goods and services.

Purchases

The GST returns also list all the purchases made by the business for a specific period. This helps in claiming input tax credits for taxes paid on purchases.

Output Tax

The registered taxpayers shall report GST collected on sales (output tax) in the GST return filings. This is the tax amount collected from customers on behalf of the government.

Input Tax Credits

The businesses shall report GST paid on purchases (input tax) in the GST returns. This is the tax amount the business pays on its purchases, which can be offset against the output tax liability.

Tax Liability

After reconciling various returns, the return calculates the net tax liability or a refundable amount based on the output tax and input tax credits. If the output tax exceeds the input tax credits, the business must remit the difference to the tax authorities. If the input tax credits exceed the output tax, the business/ company is eligible for a refund.

Other Details

Depending on the tax jurisdiction, the return may also require additional information, such as details of exempt supplies, zero-rated supplies, and any adjustments or corrections to previous returns.

Types of GST Returns

Many GST returns are to be filed by a taxpayer based on the information one is to furnish for the financial year. We have listed the major GST return types below:

GSTR-1

This GST return filing is for outward supplies of goods and services. The registered taxpayer must provide the details in the GSTR-1 form for the sales closed in the year. These include invoices issued, credit and debit notes, and any adjustments made.

If a business has turnover of 5 crore and above, it is mandatory to file its GSTR-1 monthly.

For taxpayers with a turnover of less than 5 crores, GSTR-1 can be filed either monthly or quarterly.

GSTR-2A

GSTR-2A is an auto-generated return that provides information on inward supplies of goods and services. It is generated based on the details uploaded by the supplier in their GSTR-1 return.

GSTR-3B

GSTR-3B is a monthly summary return that summarizes the details of outward and inward supplies, input tax credit claimed, and tax liability for the month. It is a self-declaration return filed by registered taxpayers.

This GST return filing is compulsory for both regular taxpayers and those opting for the QRMP scheme. The taxpayers opting for the QRMP scheme have the option of quarterly filing.

GSTR-4

Also known as the Composition Scheme Return, GSTR-4 is filed by taxpayers registered under the composition scheme. It includes details of yearly turnover and tax payable under the composition scheme.

GSTR-5

GSTR-5 is filed by non-resident taxable persons who conduct business in India. It includes details of outward supplies, tax liability, and taxes paid during the tax period.

GSTR-6

GSTR-6 is a return form for Input Service Distributors (ISDs). In this system, input tax credits are claimed by businesses with operations in multiple locations or for multi-branch operations. The GSTR-6 filing helps a head branch distribute the business input tax credit amongst various branches to claim a maximized ITC amount.

GSTR-7

Taxpayers coming under the TDS (tax deducted at source) scheme of GST must file GSTR-7. GSTR-7 contains all the data related to the supplier and all transactions where tax is deducted at the source. This GST return filing also includes details of TDS deducted, TDS liability, and government payments.

GSTR-8

GSTR-8 is GST return filing for e-commerce. It is filed by e-commerce operators who collect tax at source (TCS) on behalf of the sellers. It includes details of supplies made through the e-commerce platform and TCS collected.

GSTR-9

GSTR-9 is an annual return consolidating the details of outward and inward supplies, input tax credit availed, tax paid, and other particulars for the entire financial year.

It is a consolidated summary of the year’s financial statement where the taxpayer compares the purchase and sales registers and reconciles their annual return GSTR-9 and GSTR-9C with the GSTR-1 and GSTR-3B. This calculates the summary of one’s full-year transactions, highlighting the year’s tax paid and ITCs claimed.

GSTR-9A

Taxpayers opting for composition scheme under GST file GSTR-9A. Small taxpayers are hereby report yearly transactions under GSTR-9A filing. This includes a summary of outward and inward supplies, input tax credit availed, tax paid, and other particulars.

GSTR-9C

GSTR-9C deals with producing details of eligible taxpayers’ self-certified annual audit forms. In addition to this GST Audit form, the taxpayer must file the GST reconciliation statement and audited copies of the annual financial statements as specified under sub-section (5) of section 35 of the CGST Act.

Earlier, it was compulsory to get the GSTR-9C form audited by a Chartered Accountant or Cost Accountant, but now only self-certification is mandatory.

GSTR-10

GSTR-10, also known as the Final Return, is filed by taxpayers whose GST registration has been cancelled or surrendered. The deadline to file GSTR-10 is within three months from the date of cancellation or date of cancellation order, whichever is later.

This GST return filing requires the taxpayer to furnish details of closing stock held on the last day of the business. This includes details of inward and outward supplies made during the period between the effective date of cancellation and the date of cancellation.

GSTR-11

Persons with Unique Identity Number (UIN) file GSTR-11. This return is to claim a refund of taxes paid on inward supplies. This involves issuance of UIN to foreign diplomatic missions and embassies in India. This return contains details of inward supplies sent by UIN holders and subsequently they claim refund on this. GSTR-11 is a monthly filing process. The due date for GSTR-11 is 28th of the month following the month for which the filing of statement is done.

CMP-08

CMP-08 refers to a quarterly statement cum GST return filing challan for taxpayers registered under the Composition Scheme in the Indian Goods and Services Tax (GST) system. The Composition Scheme is an optional scheme available for small taxpayers with a turnover threshold.

A composition scheme is a provision made by the government for GST return filing for small businesses/ taxpayers. This GST return filing is for businesses with an aggregate turnover in the preceding financial year of up to ₹ 1.5 Cr in case they are dealing in goods. In the case of services being provided by the taxpayer, the aggregate turnover limit is ₹ 50 lakhs.

ITC-04

ITC-04 is a return filed by taxpayers who send goods or capital goods to a job worker and receive them back. It contains details of goods dispatched to the job worker and received back, including goods sent for further processing, testing, repair, etc. This GST return filing helps in claiming input tax credit (ITC) on goods sent for job work. It must be filed quarterly by the 25th of the month after the quarter’s end.

GST Return Filing Due Date

The GST authorities define the due dates based on the type of GST returns one is filing.

Here are the major GST return filing due dates:

Penalties and Late Payment Fees on GST Returns Filing

If you miss the return filing deadline, the GST council charges an 18% interest charge on the late payment of taxes under the GST. This interest is payable for the number of days the payment is late from the GST return filing due date.

A GST return filing penalty fee is also applicable. GST return filing late fee for taxpayers is ₹ 50/day. ₹ 25 per day goes to CGST, and ₹ 25 per day goes to SGST (in case of any tax liability).

In the case of Nil tax liability, ₹ 20/day is chargeable. ₹ 10/- the day goes as CGST, and the other Rs 10 as SGST. This penalty is subject to a maximum of ₹ 5000/-.

GST Return Filing Process

The GST return filing process might differ for different GST returns. But the goal is the same: to ensure the correct reporting of financial transactions and compliance with tax regulations.

Here are the major steps in the GST return filing process –

1. Registration

The first step is to register for GST with the appropriate tax authority. Entities liable to register for GST include businesses with a turnover exceeding 40 lakhs (for goods) and ₹20 lakhs (for services).

2. Maintaining Records

Registered taxpayers need to maintain proper records of all financial transactions. These include sales, purchases, input tax credits, output tax liability, and other relevant details.

3. Generating Invoices

The next step is for taxpayers to issue invoices for all outward supplies made, as per the prescribed format and rules laid down by GST law. Invoices need to contain specific information such as GSTIN, details of the supplier and recipient, description of goods or services, HSN or SAC codes, and taxes charged.

4. Filing of Returns

Filing of the GST returns is periodic depending on the type of taxpayer and the nature of transactions. The most common types of GST returns include GSTR-1 (for outward supplies), GSTR-3B (monthly summary return), and GSTR-9 (annual return). Other returns such as GSTR-4 (for composition scheme taxpayers), GSTR-9A (for composition scheme taxpayers), and others may also apply based on the taxpayer’s profile.

5. GST Return Filing Online

One can file GST returns electronically through the GST Common Portal (https://www.gst.gov.in/). For GST return filing online, taxpayers need to log in to the portal using their credentials and navigate to the relevant section to file their returns. The return filing portal provides user-friendly interfaces for entering data, validating information, and submitting returns. One can also check their GST return filing status using the GST portal.

6. Payment of Taxes

After filing returns, taxpayers need to pay any taxes due through the GST portal. Options to pay via online mode using various payment modes, such as net banking, credit/debit cards, NEFT/RTGS, and over-the-counter payments.

7. Acknowledgment and Confirmation

Once taxpayer files the returns and pays the due taxes, they receive an acknowledgement in the form of a unique reference number (ARN) or acknowledgement receipt. This confirms the successful filing of returns. They can further check the GST return filing status using the GST portal.

8. Verification and Reconciliation

Taxpayers should verify the details submitted in the returns and reconcile them with their financial records to comply with GST laws.

10. Compliance and Follow-up

Taxpayers should comply with any notices, communications, or requirements from the tax authorities regarding their GST returns. Addressing any discrepancies or issues promptly is essential to avoid penalties or fines.

Challenges and Solutions in GST Return Filing

Filing GST returns is complex, with a need to understand the Indian tax system, technology, and procedures. Here are the major challenges that registered taxpayers face while GST return filing –

Compliance Complexity

When dealing with GST returns, there are many complex compliance requirements, such as multiple returns, diverse tax rates, and various forms for different types of taxpayers.

Technical Issues with GST Portal

Taxpayers often encounter technical glitches, slow processing times, and system downtimes while filing returns on the GST portal.

Data Accuracy and Reconciliation

The biggest challenge for taxpayers and finance teams is the wrong entry of data, which results in the wrong output, whether it’s return filing, tax calculations, or ITC claims.

Input Tax Credit Reconciliation

Reconciling input tax credit (ITC) claims with supplier invoices uploaded can take time and effort, especially if suppliers’ mismatch or are non-compliant.

Compliance Challenges for Small Taxpayers

Small and medium-sized enterprises (SMEs) generally lack the resources and expertise to deal with the complexities of GST compliance, leading to a compliance burden and increased costs.

Legal and Procedural Challenges

Changes in GST laws, rules, and GST return filing procedures can create confusion and uncertainty for taxpayers, leading to compliance challenges.

Conclusion

GST return filing is vast and dealing with it is complicated. While filing returns whether monthly, quarterly or annually, teams have to be extra careful and diligent. Despite these hurdles, there are solutions like integrating smart GST Compliance software to ease the GST return filing procedures.

Get onto your daily tasks of compliance with advanced features of software like GSTrobo which lets you leverage cutting-edge technology. With one-click return filing and reconciliation solutions, it provides real-time invoice matching mechanisms to avoid errors. With automated processes, the software lets the finance teams save time and effort and being a cloud platform, it provides businesses with correct record-keeping to stay vigilant regarding audit trials and any penalties. GSTrobo automatically updates the new amendments within the software to keep businesses compliant.