While all the returns under GST would be required to be filed electronically, the details of Central and State taxes would be consolidated together for the purpose of reporting the details of outward and inward supplies, Input Tax Credits (ITC), tax payments, etc. A normal registered taxable person is required to file two basic forms in a month, namely GSTR-1 and GSTR-2. These forms represent details of outward supplies and inward supplies of goods and services effected in a particular tax period. A normal registered taxable person is also required to file a return in form GSTR-3 on a monthly basis, consolidating the details of outward and inward supplies, ITC availed, Tax payable, Tax paid and other particulars. A general overview on the flow of information through various returns is depicted in the form of a flowchart hereunder:
In addition to the above returns, a registered taxable person is also required to file an Annual Return in form GSTR-9 (not GSTR-8, as provided under the report of the Joint Committee on business process on GST Return, in October 2015). Specific provisions have been made for filing the First Return by every assessee. Further, returns have also been prescribed for a Composition taxpayer (in form GSTR-4), Non-resident foreign taxpayer (in form GSTR-5), Input Service Distributor (in form GSTR-6) and TDS deductor (in form GSTR-7). A registered taxable person is also required to file a Final Return in case of cancellation of registration. There is no provision for revising the returns, but rectification of errors/omissions is allowed upto a prescribed time period. It may be noted that levy for late fee for delay or non-filing of returns are prescribed.
Outward and Inward Supply
Outward supplies include details relating to zero-rated supplies, inter-state supplies, return of goods received in relation to/in pursuance of an inward supply, exports, debit notes, credit notes and supplementary invoices. The details of outward supplies for a tax period must be filed on or before 10th day of the month succeeding such tax period, in form GSTR-1. The model law contemplates that the details of each of the outward supply made during a month must be communicated to the recipient within a specified time frame. In our view, the communication to the recipient would be routed through GSTN as such the details would be auto-populated in the concerned tables of GSTR-2 of the recipient. No rectification can be carried out in form GSTR- 1 after filing form GSTR-3 for the month of September of the subsequent financial year (FY) or after filing form GSTR-9, whichever is earlier.
A normal registered taxable person is required to verify, validate, modify or delete details relating to his inward supplies. He may also provide details of his inward supplies received by him, which have not been declared by supplier in his Return. He must furnish details of inward supplies of taxable goods/services, including inward supply of services on which tax is payable on reverse charge and inward supply of goods/services taxable under the IGST Act, received during a tax period on or before 15th day of the month succeeding such tax period in form GSTR-2. Just like form GSTR-1, no rectification can be carried out in form GSTR-2 after filing form GSTR-3 for the month of September of the subsequent FY or after filing form GSTR-9, whichever is earlier.
An assessee is required to enter invoice level details for each of his transactions. Entering invoice level details is necessary for reconciliation of tax deposits and end-to-end reconciliation of ITC. Invoice level detailing would also help the Government in determining the share of tax attributable to destination state in case of an inter-state supply. This is going to be a cumbersome process for both small and large scale dealers. Small assessee may find it difficult to manually enter the details of invoices month on month and large assessee may face infrastructural bottleneck in uploading huge volume of data. The industry has raised some concern on the reconciliation of ITC at invoice level detail, calling it cumbersome and impractical. However, in our view, in order to ensure compliance at all levels of the supply chain, and to eradicate evasion of tax and fraudulent transactions, the requirement of entering invoice level details would be imperative and worth the effort.
Consolidated Return
A consolidated return in form GSTR-3 providing details of inward and outward supplies of goods/services, ITC availed, Tax payable, Tax paid and other relevant particulars are required to be filed by registered taxable person on or before 20th day of the succeeding month. A registered taxable person shall not be allowed to furnish form GSTR-3 for a tax period if valid return for any previous tax period has not been furnished by him. It may be noted that the tax for the relevant tax period should be paid on or before the due date of filing of form GSTR-3. Furnishing of GSTR-3 without payment of full tax due as per such return shall not be treated as a valid return for allowing ITC in respect of supplies made by such person. The consequences of such conditional provision for allowing ITC are discussed in greater detail in later part of this article, under ITC matching.
Filing of GSTR-3 on monthly basis is mandatory whether or not any supplies of goods/services have been effected during such month. No rectification can be carried out in form GSTR-3 after due date of filing form GSTR-3 for the month of September or 2nd quarter of the subsequent FY or after filing form GSTR 8, whichever is earlier. A Composition taxpayer must furnish form GSTR-4 for each quarter or part thereof within 18 days after the end of each quarter. An ISD must furnish form GSTR-6 within 13 days after the end of the month. A registered taxable person deducting tax at source must furnish form GSTR-7 and pay tax so deducted within 10 days after the end of the month.
Annual Return
Form GSTR-9 is required to be furnished by every registered taxable person, other than ISD, TDS deductor, Casual taxable person and Non-resident taxable person on or before 3 1st December following the end of the FY. Persons required to get their accounts audited must also furnish annual return along with audited copy of annual accounts and reconciliation statement, reconciling the value of supplies declared in annual return with annual financial statement.
The Model GST law contemplates that a taxable person cannot take the credit of tax paid on goods and/or services after filing GSTR-3 for the month of September following the end of financial year to which such invoice pertains or filing of the relevant Annual Return (3 1st December), whichever is earlier.
Created & Posted By Aashima
Accounts Executive at TAXAJ
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