GST is likely to be implemented on the 1st of July. Post this date, businesses will no longer have to file separate returns for excise, VAT, sales tax and service tax.
If you are running a business, it's important to understand returns filing under GST. Let look at the basic four returns that will have to be filed once GST is implemented.
What is a GST return?
Like a tax return which contains details of a taxpayer's income, GST returns (GSTR) will have details of:
- Output GST (on sales made by you)
- Input Tax Credit (GST Paid on inputs or purchases)
Where will you file GST returns?
All GST returns have to be filed online. A common portal will be provided by the GSTN (GST Network).
Information in a GST return
Any GST return will contain the following basic information;
- GST ID of the tax payer. This is also called GSTIN GST taxpayer identification number. This is a unique registration number based on PAN (PAN is mandatory for GST).
- Name of the taxpayer.
- Turnover (sales) for the last year.
- Tax period: month and year for which return is being filed
All these details will be automatically populated once you log in to the GST portal with your credentials. You will be required to enter only the last year's annual sales figures when you file for the first time.
TYPES OF GST RETURNS
Here are the four basic types of GST returns.
Type of return
Details of sales
10th of the next month
Details of purchases
(for claiming input tax credit)
15th of the next month
Monthly summary of sales, purchases along with tax liability
20th of the next month
31st December of next financial year
It will contain details of sales of goods and services made by you, in addition to:
- GSTIN: Your Goods and Services Taxpayer Identification Number
- HSN: Harmonized System of Nomenclature for goods
- SAC: Services Accounting Code
- POS: Place of Supply of Goods/Services—State Code has to be mentioned.
These will be mostly auto-populated. You will be required to enter all the details of your sale bills into the GSTR-1.
It will contain all the details of your purchases (goods and/or services) on GST has been paid by you. This GST can be claimed as input tax credit. Which means you can adjust taxes paid on inputs against taxes paid on outputs. This information will be auto-populated. It will pull the data automatically from your supplier's GSTR-1 once he files his return. Any information missed by your supplier can be manually added by you
It will have all the details of:
- Your purchases
- Your sales
- Tax amount
This is a monthly summary where all the data will be pulled automatically from your GSTR-1 & GSTR-2 returns.
The portal will auto-calculate the tax liability after considering the input tax credit from GSTR-2.
GSTR-9 will have details of:
- Whether your books must be audited (For turnover more than Rs. 1 crore)
- Auditors (if audit is applicable)
- Profit as per Profit and Loss A/c (gross profit, profit after tax and net profit for the year).
Details of your purchases and sales will be automatically pulled from your GSTR-1, GSTR-2 and GSTR-3.
The portal will automatically reconcile the transactions during the year using all available information. It will calculate the tax liability and compare it with the tax paid during the year. Any tax difference and the interest and/or penalty will also be automatically calculated.
By making the entire process online, with auto-population, GST is likely to ease the burden of tax compliances and return filing.