GST for MSMEs is about to get easier. The GST council will be launching a new GST return filing system which will be beneficial for MSMEs and small businesses.
The new system will be more simple and will have more filing options.
This scheme has come after the following:
- Increase in GST limit for MSMEs to INR 40 lakhs from INR 20 lakhs.
- GST benefits through increased use of UPI-based QR codes in different stores.
All about GST returns:
GST returns are detailed reports of the sales and purchases made along with the tax which is collected or paid. GST return filing is generally done quarterly or annually.
GST returns have to be filed when small businesses purchase or sell products.
The input tax credit has been paid on purchases and output GST on sales has been provided.
Filing for GST eliminates the need for separate tax calculations. It also helps in keeping a record of the liabilities and credit so that the existing credit can be utilized effectively.
How can the new return filing system help the MSMEs?
1. Easy to comply with
The facility of uploading invoices by the seller which can be viewed and locked by the buyer made many businesses to upload sales invoices before the deadline.
Small business or MSME taxpayers can file for GSTR-1 on quarterly basis if the turnover is below Rs. 1.5 crore.
But this limit now has been raised to Rs. 5 crores which will be beneficial for small businesses.
2. Multiple returns can be filed
Multiple return options can help businesses complete their filing in less time.
It also helps the GSTN sort taxpayers and also effectively verify the filed returns.
3. Payments made easy
MSMEs registered under the MSMED Act, 2006 mostly go for quarterly filing of returns, which can lead to a delay in uploading the invoices.
But with the new system, uploading invoices at the convenience of the supplier is possible.
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