GST or The Goods and Service Tax is an Indirect Tax which came into effect on 1st July 2017. GST has replaced many taxes that were there like Central Excise Duty, Duties of Excise, Additional Duties of Excise, Additional Duties of Customs, Special Additional Duty of Customs, State VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entertainment Tax, Entry Tax, Taxes on advertisements, and Taxes on lotteries, betting, and gambling.
Some features of GST:
- GST will be levied on the purchase of raw materials, production, warehousing of finished goods, selling to the wholesaler, selling to the retailer, and to the end consumer.
- GST will be levied every monetary addition which comes at each stage until the selling of the final product to the customer.
There are 3 main components of GST:
1. CGST- CGST is collected by the Central Government on any intra-state sale
2. SGST- SGST is collected by the State Government on any intra-state sale
3. IGST- IGST is collected by the Central Government for any inter-state sale
GST can be filed online easily.
Follow these steps to file GST online:
1. Firstly register yourself after visiting the GST portal (https://www.gst.gov.in/)
2. The second step is logging in the portal and entering details like the GST state code and PAN number. After this, a 15-digit identification number is generated and is issued to you.
3. Next step is to upload the invoices after which an invoice reference number is issued for each of the invoices. Now fill you inward, outward, and cumulative return online.
4. Fill the GST return forms accordingly.
5. You can then verify and modify the details filled by the supplier.
6. The last step is to provide information regarding the inward supplies of taxable goods in form GSTR-2 by the recipient.
When you are filing your GST returns, you might have some queries.
Here are some common doubts and queries with answers:
1. Can GST returns be filed within a specific period of time?
Yes, GST returns have to be filed within the time period which is mentioned, and if one fails to do so, the return can only be filed when the window re-opens.
2. Is filing GST Returns mandatory, even when no sales were there?
Yes, filing for GST is necessary even when there is a nil value.
3. Difference between xlsx and CSV files?
There is no difference between both; these are two offline tools to file GST.
4. Are there any late fees charges for return?
Yes, a late fee is applicable on returns. Currently, the late filing fee 50 INR per return and 20 INR in case of any nil return.
5. Can you tell about some precautions that need to be taken while using a Digital Signature Certificate?
Make sure that the DSC is of Class II, Class III or PAN-based, is not expired, should be registered on the portal, and EM signer version 2.6 must be installed on the computer with the DSC dongle connected to the computer.
6. Is the late filing fee calculated on the number of days since after the filing window is disabled by GSTN?
Yes, a late filing fee is applicable and will be calculated up to the date of actual filing of the GST returns.
When you are filing your GST returns, there are also some documents that are required.
Here is a list of the required documents for GST registration:
- PAN Card of the Individual
- Photo of the owner and partner
- Address Proof of the place of Business along with utility bill
- Letter of Authorization in case of a Company & Partnership Firms
- If the place is on rent, a rent agreement and NOC is required
- Digital Signature (In case of Private Limited Companies & LLPs)
- Bank Account Statement of the business
Once you have registered for GST and you feel that you have made a mistake in filling the details like your name, you can easily change or update your details.
The details that can be changed are:
- Name and Address of the business
- Address of the additional place of business
- Information about the partners, directors, Managing Committee, and CEO (people who are responsible for the day to day affairs of the business)
- Mobile number or email address of the business owner or person who has the authority
Here is how you can change your GST registration details:
1. The first step is to submit form GST REG-14 along with the required documents.
2. This will be verified by the GST officer and will be approved within 15 days in form GST REG-15.
3. If the Officer is not satisfied with the documents, then he/she can give a show cause notice in form GST REG-03.
4. The applicant then has to reply in form GST REG-04 within 7 days of the show cause notice.
5. If the Officer is not satisfied with the reply of the applicant, he/she can reject the application and pass an order of rejection in form GST REG -05.
6. But, if the GST Officer does not take any other action, then it can be concluded that the information has been changed/updated.
Have you paid an excess amount while making the GST payment?
Here is how you can claim your GST refund:
1. Log in the GST portal.
2. Go to Services-Refunds-Application for refund.
3. Now, select ‘Refund of Excess Balance in Electronic Cash Ledger’ and then click on ‘Create’.
4. After you click on ‘Create’ all balances will reflect in the Electronic Cash Ledger which you can claim a refund. The amount of refund which is to be claimed can be entered in the editable ‘Refund Claimed’ table.
5. Select the Bank Account from the drop-down menu in which you want the refund amount to be credited and then click on ‘Save’.
6. The last step is to click on the checkbox in the declaration, select the name of the ‘Authorised Signatory’ from the drop-down menu and based on the type of your organization click on ‘Submit With DSC’ or ‘Submit With EVC’
If you are a taxpayer, you should know about the GST composition scheme.
By using the GST composition scheme, small taxpayers can get rid of the long and tedious GST formalities and can pay GST at a fixed rate of turnover. But this scheme can only be used by any taxpayer who has a turnover of less than Rs. 1 crore.
If you want to avail the GST composition scheme, you will have to fulfill the following conditions:
- An individual opting for composition scheme cannot claim the Input Tax Credit.
- GST exempted goods cannot be supplied by the dealer.
- The taxpayer has to pay taxes at normal rates for transactions under the Reverse Charge Mechanism.
- If a taxable person has businesses like textile, electronic accessories, groceries, etc. under the same PAN, the person must register all such businesses collectively under the scheme, and if this is not done, the taxpayer will have to opt out of the scheme.
- Composition taxable person has to be mentioned by the taxpayer on every notice or signboard displayed at the place of business, and on every bill of supply which is issued.
If you use the GST composition scheme, there are certain benefits that you can get:
- Composite taxpayers need to provide only the total sales instead of giving a bill wise summary and are required to only pay a fixed percentage of their sales.
- If a taxpayer pays opts for the composition scheme, the tax rate is minimal. Because of the taxes being at a lower rate, there is high liquidity.
- The composition scheme would give a small business owner the opportunity to expand the business by offering competitive pricing.
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