In today’s blog, we will talk about GST Return, its types and how to file them. All registered businesses are required to file monthly, quarterly and/or annual GST Returns based on the type of business to take the benefit of Input Tax Credit. Let’s dive deeper in the coming sections.

What is a GST Return?

A GST return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. The detailed document is then used by tax authorities to calculate tax liability. In simple words, it showcases the income of the registered taxpayers.

As per the GST Act, a registered dealer has to file GST returns that include:

• Sales

• Output GST (On sales)

• Purchases

• Input tax credit (GST paid on purchases)

To file GST returns, a taxpayer needs to have GST compliant sales and purchase invoices.

Who all are required to file GST Returns?

Any regular business is required to file two monthly returns and one annual return in the GST regime. Hence, making it 26 returns in a financial year.

Now, with the advanced technology, a taxpayer only has to manually enter details of one monthly return – GSTR-1 and the other return – GSTR 3B will get auto-populated by deriving information from GSTR-1 filed by the taxpayers and his/her vendors.

However, there are special cases under GST who need to furnish separate returns and these include –

• Input Service Distributors

• Non-resident taxable persons

• Persons allotted with Unique Identification Number (UIN)

• Taxpayers registered under Composition Scheme

• Persons required to deduct TDS or collect TCS under GST

What are the various types of GST Returns?

Following is the list of all the returns to be filed as prescribed under the GST Law along with their purpose and frequency.

1. Form GSTR – 1 :  It contains the details of outward supplies of taxable goods or/and services affected. One needs to file it monthly.

2. Form GSTR – 2 :  It contains the details of inward supplies of taxable goods or/and services affected claiming the ITC. One needs to file it monthly.

3. Form GSTR – 3 :  It is a monthly return on the basis of finalization of details of outward and inward supplies along with tax payment. One needs to file it monthly.

4. Form GSTR – 3B :  It is a simple return in which summary of outward supplies along with ITC is declared and tax payment is affected by a taxpayer. One needs to file it monthly.

5. Form GSTR – 4 :  It is a return filed by a taxpayer registered under the composition levy. One needs to file it quarterly.

6. Form GSTR – 5 :  It is a return that is required to be filed by a Non-Resident foreign taxable person. On needs to file it on a monthly basis.

7. Form GSTR – 6 :  This is the return for an Input Service Distributor which requires a monthly filing.

8. Form GSTR –  7 :  It is a return to be filed for the authorities deducting tax at source and requires a monthly filing.

9. Form GSTR – 8 :  It is a simple return which contains the details of supplies effected through e-commerce operators and the amount of tax collected. One needs to file it monthly.

10. Form GSTR – 9 :  A very important and only return that requires annual filing for the financial year by a normal taxpayer.

11. Form GSTR – 9A :  It is also an annual return which needs to be filed by a taxpayer registered under the composition levy anytime during the year.

12. Form GSTR – 10 :  This return has to be filed only once, when GST registration is cancelled or surrendered and is a Final Return.

13. Form GSTR – 11 :  A return which has the details of inward supplies needed to be furnished by a person with UIN  and claiming a refund. One needs to file it monthly.

GST Tip: It is important to know that all the returns are not in function and some of these were introduced but were suspended.

What is the late fee for not filing returns on time?

As we know, there are always provisions for not following the prescribed time frame, so is the case with GST returns. If one misses the time limit and does not file them within the time then he/she would stand liable to pay interest and a late fee.

The interest is 18% per annum and is calculated by the taxpayer on the amount of outstanding tax that has to be paid. The time period for the interest starts from the very next day of the last day of filing to the date of payment.

The provisions for a late fee is Rs. 100 per day per Act, meaning it is Rs. 100 under CGST and Rs. 100 under SGST, making it a total of Rs. 200 per day. The maximum amount is Rs.500.

GST Tip: There is no late fee on IGST.

For more in-depth information on topics related to GST and GST Returns, stay tuned!

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1. Those having an aggregate annual turnover of less than Rs. 5 crores can file GSTR-3B due in March, April and May 2020 by the last week of June 2020. There will be no interest, late fee, and penalty charged.

2. Those having an aggregate annual turnover of Rs. 5 crores or more can file GSTR-3B due in March, April and May 2020 by the last week of June 2020 but the same would attract a reduced rate of interest @9 % per annum from 15 days after the due date (current interest rate is 18 % per annum). There will be no late fee and penalty charged, if complied before till 30 June 2020.

3. The date for opting for composition scheme has been extended till the last week of June 2020.

4. The last date for making payments for the quarter ending 31st March 2020 and filing of return for the FY 2019-20 by the composition dealers has been extended till the last week of June 2020.

5. The date for filing GST annual returns of FY 2018-19, which is due on 31st March 2020 has been extended till the last week of June 2020.

6. The due date for issue of notice, notification, approval order, sanction order, filing of an appeal, furnishing of return, statements, applications, reports, any other documents, the time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020 to 29th June 2020 have been extended to 30th June 2020.

7. Necessary legal circulars and legislative amendments to give effect to the aforesaid GST relief would be followed with the approval of GST Council.

8. Payment date under ‘Sabka Vishwas Scheme’ has been extended up to 30th June 2020. No interest for this period would be charged if paid by 30th June 2020.

9. 24X7 Custom clearance will be allowed until the end of 30th June 2020.

10. The due date for issue of notice, notification, approval order, sanction order, filing of an appeal, furnishing applications, reports, any other documents etc., the time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20th March 2020 to 29th June 2020 have been extended to 30th June 2020.

We hope the information provided turn out to be helpful for you. Use E-filing software to file GST to stay inside and safe. Use GRECS for smooth and easy GST filing. For more such articles on GST, stay tuned with Digitax Automation.

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Role of CFOs and Tax Heads is critical

Essentially, in this new GST regime, the role of CFO has undergone a sea-change and been imposed with significantly more responsibility of being true and correct in relation to tax reporting and compliances. As legislation imposes heavy corrective penalties in case of errors resulting in short payment of taxes or incorrect availing of ITC, the job of CFO has become more challenging.

Challenge of GST reconciliation

Ever-increasing regulatory requirements and with the vast volume of data CFO is getting it increasingly difficult, if not impossible, to manage whole work manually or with traditional spreadsheets. This reconciliation of the ITC data process requires:

• To find the mismatch in the data
• To find the missing entries in the returns filed by various
• To track the returns filed by the vendors.
• To get the timely alterations in the returns filed by the
• Manually editing or adding the data.
• To keep the records of ITC already claimed and pending

One of the recent studies has found that due to this tedious and time-consuming nature of the claim process, 40% of business houses are still grappling with GST compliance.

The only real solution here is the complete automation of the reconciliation process. This will not only eliminate all the above issues but will also enhance overall end-user experience and free up employees for more core responsibilities. With the adoption of advances technology such as direct import of data from the accounting software as well as GSTN portal and seamless integration with the returns filed by various vendors, the overall ITC matching process can shrink to a matter of 2 to 3 hours only. It will not only save the precious productive time but completely wipe off the fear of any future tax or interest liability.

To know more about GST automation solutions, you can contact at support@digitaxindia.com

The post Critical Role of CFOs and Tax Heads in claiming GST Input Tax Credit (ITC) first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

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• Who all can opt-in for Composition:

• Steps to opt-in for Composition:

1. Log in to the Taxpayers’ Interface.
2. Go to Services > Registration > Application to opt for Composition Levy
3. Fill the form as per the form specification rules.
4. Click on Submit.

• Submission of Stock Intimation Details:

• Who comes under eligible taxpayers:

1. Rs. 1.5 Crore for normal taxpayers.
2. Rs. 75 lakh in the case of an eligible registered person, registered States, namely: –(i) Arunachal Pradesh, (ii) Manipur, (iii) Meghalaya,(iv) Mizoram,(v) Nagaland,(vi) Sikkim,(vii) Tripura,(viii) Uttarakhand.
3. For taxpayers dealing in only services or mixed supplies, this quantum is Rs. 50 Lakh.

• Who comes under non-eligible taxpayers:

1. any supply of goods which are not liable to be taxed under this Act.
2. inter-state outward supplies of goods.
3. supplies through electronic commerce operators who are required to collect tax under section 52.
4. a manufacturer of notified goods.
5. a casual dealer.
6. a Non-Resident Foreign Taxpayer.
7. a person registered as Input Service Distributor (ISD).
8. a person registered as TDS Deductor/Tax Collector.

• Return or Payment:

The post Advisory for Opting in for Composition – Filing of Form GST-CMP-02 for the Financial Year 2020-21 w.e.f. 1st April 2020 first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Nowadays, the GST portal has started showing monthly summary reports of Liability declared and credit claimed by the registered persons in a financial year. Following reports can be viewed in the GST site – 

1.   Liability statement other than export and reverse charge

2.   Liability due to reverse charge

3.   Liability due to export and SEZ supplies

4.   ITC credit claimed and due.

Out of these 4 reports, the ITC credit claimed and due report is one of the most important reports which is useful in the preparation of ITC related information in GSTR-9.

This report shows a monthly summary of ITC claimed in 3B and appearing in GSTR-2A auto-populated for that month.

Case Study

The following is a sample view of ITC credit claimed and due report of a particular case.

        ITC Credit Claimed and Due Report

However, when we see the auto-populated figure in point no. 8 of GSTR-9 of the same GSTIN, that figures are slightly different from the above report. The following is what appears on the screen. 

                Auto populated figures in point no. 8 of GSTR-9

As you can see that the auto-populated figures of 2A as showing in point number 8 of GSTR-9 and figures as showing in the ITC Credit claimed and due report, there is a difference in IGST figure. Total of IGST in ITC claimed and due report is 63,43,276.76 whereas in point no. 8 of GSTR-9 it is shown as 61,91,525.11. There is a difference of Rs. 1,51,751.65 in these 2 figures.

One may think, how this can be possible, where one report on the GST site shows one figure and the same GST site is showing another figure in another report.

How Digitax helps in finding this difference?

In Digitax G-Recs ITC reconciliation software you can see the consolidated 2A report for the whole financial year in various formats.

1.   Invoice Wise 2A report classified into Regular Invoices, Amended Invoices, Credit Note Debit Notes and Reverse Charge Invoices

2.   GSTIN Wise 2A report

3.   GSTIN wise 2A summary

4.   Month wise 2A Summary

Now, let’s see in the above case, how the difference can be easily seen.

When we see the invoice wise 2A report for the financial year in Digitax, the software classifies the Regular Invoices, Credit Notes, Debit Notes, Amended Invoices and Reverse Charge Invoices appearing in 2A for the whole financial year.

In the above case, when we see the 2A report for the FY 2017-18, the following classification comes.

From above it becomes clear that in the point no. 8 of GSTR-9, the auto-populated figures of ITC does not include Reverse Charge Invoices on which tax is liable to be paid on reverse charge basis. However, the credit claimed and due report, the credit of reverse charge invoices is included.

Sorting out the above difference without the help of any tool is quite challenging, whereas, with the right tool, you can save your valuable time and energy while preparing for GSTR-9.

For more information on Digitax G-Recs ITC reconciliation software, you can write to support@digitaxindia.com.

Stay tuned for more such information about GST and G-RECS.

The post Difference between auto-populated data of GSTR-2A shown in GST Login: A Case Study first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Conditions To Claim Input Tax Credit under GST – 

• The due date of filing the GST Return for September of the next Financial year

• the date of filing the Annual Returns for that Financial year.

• Effecting exempted and taxable supplies
• Business and non-business related activities

Items on which Credit can not be availed – 

• It is made obligatory by the government for employers to provide such to the employees.
• Goods or services are taken to deliver the same category of services or as a part of composite supply. For example, Mr Abid uses the service of rent-a-cab to supply to Mr Zakir, a client, then the credit of ITC paid on purchases will be allowed.

The post ITC: Conditions To Claim Input Tax Credit under GST first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

What is Input Tax Credit (ITC)?

Input Tax Credit basically refers to the reduction of the taxes paid on inputs from taxes to be paid on output. When the supply of goods and services is supplied to a taxable person, the GST charged is known as Input Tax. The concept of ITC is not entirely new as it already existed under the pre-GST indirect taxes regime (service tax, VAT and excise duty). Now just the scope of it has been widened under GST. Earlier, it was not allowed to claim ITC for Central Sales Tax, Entry Tax, Luxury Tax and other taxes. In addition to all these, the manufacturers and service providers were barred from claiming the Central Excise duty. Though, it should be noted that Input Tax Credit can not be applied to all types of inputs. Each and every state or country can have a different set of rules and regulations to be followed. Input Tax Credit can also be applicable to a dealer who has purchased goods to resale. These rules are quite stringent and particular in their approach. Let’s take an instance, where a manufacturer needs to figure out his final taxes after claiming the ITC. Let’s say, the tax to be paid on the final product is Rs. 500 and the purchase tax paid is Rs. 350. The Input credit he claimed is Rs. 350, then the final taxes he will pay is Rs.150. Under GST, It is a very critical activity to claim for ITC for every business to settle the tax liability. So, let’s learn how to claim ITC.

How to claim Input Tax Credit (ITC)?

If you want to claim and be entitled to your Input Credit Tax then the following must be followed as per the GST laws –

1. One should be a registered taxable person.

2. One can claim Input Tax Credit only, in the case, where the goods or services received is used for business purposes.

3. Input Tax Credit is taxable and can be claimed on exports or zero-rated supplies.

4. If you are a registered taxable person, and the constitution changes due to merger, sale or transfer of business, then the unused Input Tax Credit shall be transferred to the merged, sold or transferred business.

5. One can credit the Input Tax Credit in his/her Electronic Credit Ledger in a provisional manner on the common portal as per the model GST law.

6. Supporting documents such as a debit note, tax invoice, supplementary invoice, all are needed to claim the Input Tax Credit.

7. Input Tax Credit can be claimed if there is an actual receipt of goods and services.

8. The Input Tax needs to be paid through Electronic Credit/Cash ledger.

9. All GST returns like GST-1, 2,3, 6, and 7 needs to be filed.

So, this was all about Input Tax Credit, stay tuned for more!

The post What is Input Tax Credit (ITC) and how to claim it? first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Here are the 5 changes under the GST to be applied for New Year 2020-

1. Restriction on the Claiming of ITC- With the effect to the decision taken in the 38th GST Council Meeting, Central Board of Indirect Taxes & Customs has reduced the percentage of eligible ITC available for Availment, the details of which are not been shown by the supplier in GSTR-1. Earlier, the CGST rules stated that only 20% of the eligible credit can be claimed as ITC in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers in GSTR-01, by a registered person. But now, the only total of 10% of such credit can be availed.

2. Commissioner has the power to block ITC under new Rule 86A- The new Rule 86A grants the power to a Commissioner to decide or vary the conditions for use of ITC available in the electronic credit register. As per the amendment, a Commissioner might not allow the debiting of the amount in the electronic credit register for the discharge of tax liabilities or claim of a refund of any unutilized amounts in the tax register if he/she has reasons to believe, that such tax credit is:

(i) Availed fraudulently based on invoices from a non-existing person or non-registered person.

(ii)Availed without the receipt of goods or services.

(iii)Availed on the strength of tax invoices which has not been paid to the government.

3. If GSTR-1 not filed, blocking the generation of E-way Bill- From January 11, 2020 non-filing of GSTR-1 for two consecutive months or quarters can lead to blocking of the generation of E-way Bill. Hence, in the year 2020, make sure that the regular filing of GSTR-1 and GSTR-3B go hand in hand.

4. E-Invoicing under GST Mandatory- From April 01, 2020, it is mandated for every registered person whose aggregate turnover (including exempt supplies) on PAN India basis exceeds Rs. 100 crores in a financial year to generate e-invoices in the case of B2B supplies and report the same to the notified common portals of GST, mentioned below:

(i) www.einvoice1.gst.gov.in;

(ii) www.einvoice2.gst.gov.in;

(iii)www.einvoice3.gst.gov.in;

(iv) www.einvoice4.gst.gov.in;

(v) www.einvoice5.gst.gov.in;

(vi) www.einvoice6.gst.gov.in;

(vii) www.einvoice7.gst.gov.in;

(viii) www.einvoice8.gst.gov.in;

(ix) www.einvoice9.gst.gov.in;

(x) www.einvoice10.gst.gov.in.

The portals will be in effect from January 01, 2020, for the smooth and better accommodation and transition of the taxpayers.

5. QR codes creation for B2C supplies – With effect from April 01, 2020, Quick Response Code (QR Code) will become mandatory in the cases where an invoice is issued by a registered person, exceeding rs. 500 crore in aggregate turnover in a financial year, to an unregistered person, i.e., B2C invoice.

For the cases, where a registered person makes a Dynamic QR Code available to the receiver through a digital display, such B2C invoice issued by the registered person containing cross-reference of the payment using a Dynamic QR Code, will be deemed as QR Code.

There are more such changes, to know about them stay tuned!

The post New Changes in New Year Under GST first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

What is GSTR 2A?

•  GSTR 5 (supplied by non-resident taxable person)
•  GSTR 6 (Input Service Distributor) 
• GSTR 7 (Person liable to deduct TDS) 
• GSTR 8 (collected by TCS E-commerce) 

GSTR 2A Purpose:

The post Brief Introduction: What is GSTR 2A? first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.