GST (Goods and Service Tax) in India that was all set to kick in from 1st July 2017 has finally been implemented. The new tax regime is a first of its kind and hence, queries pertaining to filing tax returns under GST has been one of the most frequently asked questions.
So, if you like most business owners are seeking answers on “What tax returns to file for my business post GST” then, this article addresses you.
But, before you understand the details of the tax filing procedure, you need to be aware of certain changes post the new tax regime.
- All tax payers registered previously under VAT/ Service tax need to be registered under GST. If you fail to do so then, you will not be able to claim input tax credit and VAT paid on stock.
- After registering yourself under GST, you will receive a Certificate of Registration that will contain your GSTIN (Goods and Services Tax Identification Number). This certificate will be valid for 6 months.
- Any input tax credit that has been claimed before the implementation of GST will be carried forward to the electronic credit ledger.
- Input tax credit will be available to the recipient only after the invoice filed by the supplier and buyer respectively has been matched.
- Filing returns won’t be a one day activity as the GST return cycle is spread across a month. The entire process of deduction, payment and refund will be done electronically. Therefore, you’ll need to shift from offline data recording to online data recording in order to file your tax returns.
The next thing you need to do is identify the category under which you belong. Because, the returns that need to be filed by you vary on the basis of your business’s turnover.
| Category | Business Turnover | Returns to be filed |
| I | Below 20 lakhs | No returns |
| II | Above 20 lakhs and below 75 lakhs | GSTR 1 |
| III | Above 75 lakhs | GSTR 1, GSTR 2 and GSTR 3 |
If your business falls under the first category, you are not required to file any GST return. Whereas, if you belong in category 2 and 3 you only need to file GSTR 1. However, if you are in category 3, you might feel that you have to file 2 additional tax returns (GSTR 2 & GSTR 3). But, these two returns are computer generated and only require your approval. Therefore, technically, you only need to file one tax return and approve 2 other returns with additional information.
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Here’s all that you need to know about each tax return:
GSTR 1
GSTR 1 consists of 13 headings and lists the details of all the “Outward supplies” made by you within a specified period. This tax return needs to be filed by the 10 of each subsequent month. In other words, you need to file returns for your outward supplies in the month of July latest by the 10th of August.
The process of filing GSTR1 is simple. Most of the details are already auto filled. And, you no longer need to enter HSN codes for goods and SAC codes for services in each table.
After you file your GSTR 1, your buyer will go through the details filled by you and will then file his transcation details in the GSTR 2 form. Most of the information filled in the GSTR 1 form will be pre filled in the GSTR 2 form. However, the buyer can make manual changes and additions while filing the GSTR 2.
GSTR 2
GSTR 2 has a total of 13 headings and enlists the details of all the “Inward supplies” mentioned by your buyer within the specified period. It needs to be filed between the 12th-15th of the subsequent month.
Once the buyer uploads his/ her details in the GSTR 2 form, the supplier i.e you will be given the chance to make to accept this addition or modification in your GSTR 1 return. However, any change that needs to made must be done between the 16th and 17th of the subsequent month (after the buyer has uploaded his/ her GSTR).
GSTR 3
GSTR 3 provides a summary of the total output tax liability, input tax credit and the final tax liability for the specified month. It is computer generated and allows you to verify the details filed by you and the buyer in the GSTR 1 and GSTR 2 respectively.
Once, all the details furnished are validated by you, you are required to sign digitally. This can be done either through a digital signature certificate or Aadhaar based signature.
The process of filing tax returns post GST is very easy. With the new tax return structure, the relationship between suppliers and recipients will change from a “Customer Emotional” relationship to a “Customer Compliance” relationship. Timely tax compliance will help you increase your ratings and will help you build stronger business relations.
