So, let’s get started and go at length with types of GST returns.

1. GSTR-1

We all know that GSTR-1  is the return which is furnished for reporting details of all outward supplies of goods and services made within a  tax period. In simple words, it reports all the details of sales transactions made during a tax period. It also includes details of debit and credit notes, invoices and revised invoices issued during the tax period. If any amendments pertaining to sales invoices are made, even in regard to previous tax periods then they should also be reported in the GSTR-1 return.

GSTR-1 is to be filed by all the registered taxpayers. It is to be filed monthly, with an exception in the case of small taxpayers with a turnover up to Rs.1.5 crores in the previous financial year, who are allowed to file it quarterly.

2. GSTR-2

As we know it, GSTR-2 is the return wherein the reporting of the inward supplies of goods and services, that is,  the purchases made during a tax period. GSTR-2 return details are auto-populated from the Form GSTR-2A. The GSTR-2 return is editable unlike GSTR-2A.

GST Tip: The filing of GSTR-2 return has been suspended ever since the inception of GST.

3. GSTR-2A

GSTR-2A return is auto-populated from the GST portal based on data filed by the suppliers in their GSTR-1. It is non-editable and a read-only return. It is the return which has the details of all inward supplies of goods and services i.e. purchases made from registered suppliers during a tax period. The data is auto-populated based on data filed by the suppliers in their GSTR-1 return.

4. GSTR-3

As we discussed in the last article, GSTR-3 is a monthly summary return providing the summarized details of all outward supplies made, inward supplies received and input tax credit claimed, in addition to the details of the tax liability and taxes paid. The return is auto-generated based on the GSTR-1 and GSTR-2 returns that have been filed.

GST Tip: The filing of the GSTR-3 has been suspended ever since the inception of GST.

5. GSTR-3B

GSTR-3B is a monthly return containing details of tax collected on outward supplies and details of tax paid on input supplies. In simple words, it is a self-declaration containing the summarized details of all outward supplies made, input tax credit claimed, tax liability  and taxes paid. GSTR-3B is to be filed by all the registered taxpayers.

GST Tip: If there is no business activity for any period under tax, in such cases NIL return is to be filed.

6. GSTR-4 / CMP-08

GSTR-4 is the return that was to be filed by the registered taxpayers who opted for the Composition Scheme. But this return has now been replaced by CMP-08 return. The Composition Scheme is the scheme which requires taxpayers with turnover up to Rs.1.5 crores to opt into and pay taxes at a fixed rate on the turnover declared.

GST Tip: The CMP-08 return is a self-assessed statement-cum-payment done on a quarterly basis by the composition dealer.

7. GSTR-5

GSTR-5 is the GST return which is to be filed by non-resident foreign taxpayers, who carry out business transactions in India and are registered under GST. The return contains all business details from all of the outward supplies made to inward supplies received to credit/debit notes to  tax liability and taxes paid.

The GSTR-5 return is to be filed on a monthly basis, for each month the taxpayer is to be registered under GST in India.

8. GSTR-6

GSTR-6 is a monthly return which is to be filed by an Input Service Distributor (ISD). It contains the details of input tax credit received and distributed by the ISD. It also contains the details of all the documents issued for distribution of input credit and the manner of distribution. The return is to be filed before the 13th of next month.

9. GSTR-7

GSTR-7 is a monthly return to be filed by persons who are required to deduct TDS (Tax deducted at source) under GST. GSTR 7 contains all the details of TDS deducted, the TDS liability payable and paid and TDS refund claimed, if any.

10. GSTR-8

GSTR-8 is a monthly return to be filed by e-commerce operators under GST who are required to collect tax at source (TCS). GSTR-8 contains all the details of supplies made through the E-commerce platform, and the amount of TCS collected on such supplies.

11. GSTR-9

GSTR-9 is the annual return to be filed once in a year by the taxpayers registered under GST. It contains the details of all outward supplies made, inward supplies received during the year under different tax heads i.e. CGST, SGST & IGST and HSN codes. It also consists of all the details of taxes payable and paid. It is a consolidation of all the monthly or quarterly returns, i.e., GSTR-1, GSTR-2A, GSTR-3B filed during the year.

Exceptions to GSTR-9 are the taxpayers under the Composition Scheme, Casual Taxable Persons, Non-resident Taxable Persons, Input Service Distributors and the persons paying TDS under section 51 of the CGST Act.

GST Tip: The 37th GST Council meeting has decided GSTR-9 filing to be optional for the businesses with turnover up to Rs.2 crore in FY 17-18 and FY 18-19.

12. GSTR-9A

GSTR-9A is an annual return to be filed by the taxpayers who have opted for the Composition Scheme in a financial year. It consolidates the information of all the quarterly returns filed during the financial year.

GST Tip: The 37th GST Council meeting took the decision to waive off filing of GSTR-9A for Composition taxpayers for FY 2017-18 and FY 2018-19.

13. GSTR-9C

GSTR-9C is a reconciliation statement to be filed by all the registered taxpayers under GST whose annual turnover exceeds Rs.2 crores. The statement of reconciliation is between the figures as per audited financial statements of the taxpayer and the annual return GSTR-9 that has already been filed. It is certified by  a Chartered/Cost Accountant and is similar to that of a tax credit report provided under the Income-tax act.

GST Tip: GSTR-9C is to be filed for every GSTIN, thus, one PAN can have multiple GSTR-9C returns being filed.

14. GSTR-10

GSTR-10 is to be filed by a taxable person whose registration has been cancelled or surrendered under the GST. The return is also known as  final return and is required to be filed within 3 months from the date of cancellation or cancellation order, whichever is earlier.

15. GSTR-11

GSTR-11 is a return to be filed by persons who have been issued a Unique Identity Number(UIN) in order to get a refund under GST for the goods and services purchased by them in India. GSTR-11 contains the details of inward supplies received and refund claimed.

GST Tip: UIN is a classification especially made for the foreign diplomatic missions and embassies not liable to tax in India with the purpose of getting a refund of taxes.

So here are the types of GST returns and every extra information about them. Stay tuned for more such GST enhanced blogs.

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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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You must be thinking, how is this even possible because the money passes through so many direct-indirect channels so its quite tedious task to do but in the advancing technological world everything is easy and can be done on a click. Just like using GRECS for ITC reconciliation to save time and money with a perk of doing it from home!

So, here we are to help you out with your doubt of how the government keeps a check on your tax credit claim. Let’s get started with the following pointers telling the exact method and process followed by the government. 

• Government is sitting on voluminous data in the GST regime.
• Earlier, the power of access to such huge data was unavailable.
• Government engages in the heavy use of Data Analytics with industry and sector benchmarking regarding ITC claim.
• Next comes the smart monitoring systems available with assessing officers configured with various kinds of analytical, graphical and ratio analysis.
• The advancing technology helps in keeping a close eye on unscrupulous refund claims.
• Availability of data trail enables the identification of circular trading transactions.
• Identification of fake entities and registrations using locational mapping techniques helps in tracking down the defaulters. 
• All India e-way bill system tracks the transportation of goods which is now linked with www.vahan.nic.in which provides transparency. Moreover, a proposed system of e-invoicing will further strengthen the control of the government.

With the increasing use of technology, there is less and less requirement of any human intervention in finding out the red flags among such big data. Hence, technology is being used in pinpointing the exact event of fraud and has increased the accuracy of anti-evasion measures undertaken by the department.

Do let us know in the comment section how do you like this piece of information. 

The post How GST department is monitoring your Tax Credit Claim? first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

• 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:

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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!

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The non-filers who have not filed GSTR 3B (showing tax payments) returns for six or more than six return periods will be facing the cancellation of registration and will be held liable to action under GST law. Section 29 of the Central Goods & Services Tax (CGST) Act prescribes conditions for cancellation of registration and fulfilment of any of these will invite action. These include contravention of the provisions of the Act, a composition scheme assessee not filing returns for three consecutive tax periods, any non-composition assessee not furnished returns for a continuous period of six months, not commencing business within six month from the voluntary registration, and registration obtained by means of fraud, wilful misstatement or suppression of facts. The Act clearly provides that registration will not be cancelled without giving the person an opportunity of being heard.

The administration has been keeping in check the daily progress made in this regard and has come to follow the cancellation of registration after taking everything into consideration. The reports were sent from the office of the Principal Chief Commissioner of GST & Central Excise, Mumbai to Principal Commissioner/Commissioner posted in its jurisdiction. Further, the Central Board of Indirect Taxes & Customs (CBIC) is planning to furnish the non-filers by November 25 after taking this task on a priority basis.

The following comes under a registered filer for Returns as per the GST law –

1. A registered supplier will have to file returns either on a monthly or quarterly basis if the supplier is opting for composition scheme.

2. An ISD (Input Service Distributor) will have to file monthly returns showing details of credit distributed during the particular month.

3. A person required to deduct tax (TDS or Tax Deducted at Source) and persons required to collect tax (TCS or Tax Collected at Source) will also have to file monthly returns showing the amount deducted/collected and other specified details.

4. A non-resident taxable person will also have to file returns for the period of activity undertaken.

The law has been very transparent and clearly stated that the cancellation of registration will not affect the liability of the person to pay the tax and other dues. Every registered person whose registration is cancelled will pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher.

This new initiative might increase the tax mop-up under GST and will prove to be a groundbreaker rule.

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The latest circular issued by CBIC has clarified the confusion about 20% cap on ITC claims, providing a big relief to GST taxpayers. The new rules related to availing ITC under the GST clarified that a certain category of Input Tax Credit claims such as ITC in respect of the IGST paid on imports and GST paid under the reverse charge mechanism have been opted out of the realm of the new rules introduced in October 2019.  

The clarification was made regarding the rules which were implemented by the CBIC limiting the ITC claims to 20% of the eligible amount where invoice matching has already been done. Nevertheless, the notification issued by the CBIC in the second week of October left a lot of ambiguity over the method of calculating this 20% amount, the cut-off date as well as whether it was to be calculated supplier-wise or on a consolidated basis. But now, the new circular has cleared up all the doubts related to these aspects for the benefit of GST payers. 

Let’s throw some light on the clarifications made by the CBIC. First of all, this 20% cap on the eligible Input Tax Credit will be exempted from calculating as a supplier-wise rather the GST payers will be able to avail the ITC on a consolidated basis. In order to deal with the complaints related to some businesses availing ITC using fake GST invoices, the CBEC,the nodal body responsible for the implementation of indirect taxes in the country, in October 2019 made it a compulsion to match the invoices uploaded by the suppliers in their GSTR1 forms before buyers could avail Input Tax Credit in their GSTR-3 returns. However, at the same time, the buyers were allowed to claim 20% more ITC over and above the eligible amount where the invoice matching was done but the lack of clarity of calculation method created a lot of mayhem among GST payers. 

To understand it better, let’s take an instance: If a buyer is entitled to avail input tax credit of Rs 5 lakh on purchases (inward supplies) made in a month but if his suppliers have only uploaded the correct invoices in respect of supplies of Rs 4 lakh only in the GSTR1 forms uploaded by them, then the buyer can avail ITC of Rs 4 lakh plus 20% of the eligible amount, i.e., Rs 80 thousand. Thus, the buyer could claim a total ITC of Rs 4.8 lakh in the month.

In order to check the problem of misuse of input tax credit system, the CBIC’s latest circular also clarified that the total amount of ITC, even after the addition of 20% input tax credit over and above the eligible amount where invoice matching has been done, cannot exceed the total amount of input tax credit that can be claimed.

For instance, if a buyer is entitled to ITC of Rs 8 lakh on inward supplies and invoice matching is done in case of Rs 7 lakh then as per the 20% cap rule, he is also entitled to avail 20% over and above the eligible amount of Rs 7 lakh, which is 1.4 lakh in this case. However, this can take the total amount of ITC to be availed by him in the month to Rs 8.4 lakh, Rs 40,000 more than the total ITC amount that can be claimed. The new circular has intended to clarify this only, that in any case ITC claims will be restricted to the total amount due.

This was one of the aspects of the new circular, to know more about where the new GST Input Tax Credit rule will not be applicable and to know more new amends every day, stay tuned!

The post Clarifying Input Tax Credit Claims under New GST Rules first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

According to the rules laid down by the government in ‘Adoption Regulations’, Indian couples interested in adopting a child must pay a fee of Rs 40,000. Those living abroad and wishing to adopt from India are charged $5,000. Along with the fees set by the government under the ‘Adoption Regulations’, some recognized adoption agencies are also permitted to receive payment directly from the prospective parents and use it for the welfare of the kids with them.

After GST there was a lot of confusion regarding the money received would rather be subjected to GST or not. A plea was filed by Nerul charitable trust about the fees it received and arguing that it should not be subjected to GST was the reason behind the new ruling by AAR. The bench gave the ruling after complying with the argument of a recognised adoption agency from Nerul that children are not “goods” and the agency does not provide any “services” to the prospective parents. Children of World India Trust had given an argument that children are not “goods”, pointing out that it does not make any “supply” in the “furtherance of business”, which is an integral element for the imposition of GST. Furthermore, the activities of charitable trusts registered with the government are already exempted from GST. 

The charitable trusts regulated by the government through the Central Adoption Resource Agency (CARA) and have no control over the admission of a child in their centres or selection of children by prospective parents. In addition to it, this is already clear that the trusts do not engage in any business as the adoption of a child cannot be a business in view of the strict provisions of the Juvenile Justice Act. In fact, if there is any element of business in adoption activities, it is treated as a criminal offence. All the activities conducted by these adoption agencies or trusts are charitable in nature. Hence, not levying GST on the receipt of adoption fees seems a valiant step by AAR.   

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