Goods and Services Tax (GST) is an important aspect of doing business in India. It is a comprehensive tax that has replaced multiple indirect taxes and brought uniformity in the Indian Economy. It is therefore vital for small businesses to properly understand GST return filing. This article will serve as a guide on GST return filing for small businesses.
Every business registered under the GST Act has to periodically furnish the details of sales and purchases along with tax collected and paid by filing GST returns. Failure to file these returns can result in penalties and heavy fines. Furthermore, filing GST returns correctly ensures eligible input tax credits can be claimed, reducing the overall tax liability for your business.
Entrepreneurs who have recently started a new small business should read this article. They can understand the filing process, including how often it needs to be done and what information is required.
Existing small business owners looking to stay updated with the latest rules and regulations regarding GST filing will also benefit.
Accountants and financial professionals working with small businesses can use this guide to ensure they are following the correct procedures and meeting all legal requirements.
A GST return is a document that a taxpayer is required to file according to the law with the tax administrative authorities. This document will be used by tax authorities to calculate tax liability.
Under GST, a registered dealer has to file GST returns that includes: sales, purchase, output GST (on sales), and input tax credit (GST paid on purchases).
Before filing GST returns, ensure you have the following documents or information at hand:
1. GSTIN, which is your unique GST identification number.
2. Sales invoices, including details of all goods and services sold.
3. Purchase invoices, including details of all goods and services purchased.
4. Amount of GST paid on purchases (input tax credit).
Here are the steps that a small business needs to follow for GST return filing:
1. Log on to the GST portal (www.gst.gov.in).
2. Go to 'Services' then 'Returns dashboard'.
3. Select the financial year and the return filing period.
4. Fill in the relevant details in the different sections of the form.
5. Pay the GST liability, if any.
6. Verify details and submit your returns.
The GST Act mandates every registered dealer to file GST returns. For small businesses with annual turnover up to Rs 1.5 crore, GST returns has to be filed quarterly. For businesses with turnover above Rs 1.5 crore, it has to be filed monthly.
Every registered person paying tax under the composition scheme needs to file their GST returns quarterly in Form GSTR-4.
A common mistake is to wait until the last minute to begin the filing process. It's advisable to prepare your invoices and other required information on a regular basis to avoid stress and possible errors during filing.
Another mistake is not fully understanding the rules related to input tax credit. Businesses should ensure they are eligible for input tax credits and are applying for them correctly.
Q. How frequently should a small business file GST returns?
A. Small businesses need to file GST returns on a quarterly basis if their annual turnover is up to Rs 1.5 crore. If it's above Rs 1.5 crore, the returns need to be filed monthly.
Q. Are there any penalties for late filing of GST returns?
A. Yes, there are penalties for late filing. The late fee is Rs. 100 per day per Act and will be Rs 200 in total. The maximum is Rs 5,000. There is no late fee on IGST.
Q. Can I revise a GST return?
A. No, you cannot revise a GST return once it's been filed. However, you can rectify any mistake or omission in the next month's return.
Filing GST returns accurately and on time is crucial for the smooth operation of small businesses in India. It not only ensures compliance with Indian tax laws but can also benefit businesses by reducing their tax liability through the claiming of input tax credits. Getting familiar with GST return filing can result in saving, both, time and money, for a small business.
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