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Non-filing of GST returns may lead to attachment of bank a/cs

Non-filing of GST returns may lead to attachment of bank a/cs

CBIC issues Standard Operation Procedure to deal with non-filers Non-filing of GST (Goods & Services Tax) returns may lead to attachment of bank accounts and even cancellation of registrations. This is part of the Standard Operating Procedure (SOP) issued by the Finance Ministry to be followed in case of non-filing of returns.

The GST law makes it mandatory for a registered person to file returns either monthly (normal supplier) or on a quarterly basis (Supplier opting for composition scheme). An ISD (Input Service Distributor) will have to file monthly returns showing details of credit distributed during the particular month.

Persons required to deduct tax (TDS) and persons required to collect tax (TCS or Tax Collected at Source) also have to file monthly returns showing the amount deducted/collected and other specified details. A non-resident taxable person also has to file returns for the period of activity.

Revenue hit
It is estimated that up to 20 percent of assessees do not file returns. This affects revenue collection. Since there is a lack of clarity on how to proceed with non-filers and lack of uniformity in procedures, the Central Board of Indirect Taxes and Custom (CBIC), has come out with an SOP. Under the SOP, after the due date of return, a system-generated message or mail will be immediately shared with GST defaulters. Five days later a notice will be issued asking the GST payer to file the return or make payment within 15 days This notice is to be issued in Form GSTR 3A.

If the defaulter does not file the return within 15 days of the issue of the notice, the proper officer may proceed to assess the tax liability of the person to the best of his judgment taking into account all the material available or which he has gathered and would issue order under Rule 100 of the CGST Rules in Form GST ASMT-13.

If the defaulter files the GST return, then Form GST ASMT 13 will be deemed as withdrawn. If not, the officer may initiate recovery.

Though the above guidelines are to be followed in most cases, the SOP also prescribes that in some cases, based on facts, the Commissioner may resort to the provisional attachment to protect revenue, under Section 83 of the CGST Act before issuance of Form GST ASMT-13.

If the return is not filed within the time prescribed under Section 29 of the CGST Act, then the process of cancellation may be initiated. The relevant section prescribes conditions for cancellation of registration, and the fulfillment of any of these will invite action.

These include a composition scheme assessee not filing returns for three consecutive tax periods, a non-composition assessee not furnishing returns for a continuous period of six months, not commencing business within six months of the voluntary registration, obtaining registration by fraud, and willful misstatement or suppression of facts.

The Act clearly states that registration will not be canceled without giving the person an opportunity of being heard.

Pritam Mahure, Chartered Accountant, felt that after blocking of e-way bill generation for non-filers, issuing Standard Operating Procedure for non-filers is the next step by CBIC to ensure proper collection.

However, “it may be noted that due to the slowdown and cash crunch, taxpayers are already struggling to survive. Thus, the proposed steps will effectively mean halting businesses, with negative consequences for taxpayers and the economy,” he said.

Sources : The Hindu

Govt blocks GST e-way bill generation; move may impact 300,000 firms

Govt blocks GST e-way bill generation; move may impact 300,000 firms

Businesses of roughly 300,000 firms paying goods and services tax (GST) were likely impacted on Monday, as the government had blocked e-way bill generation for non-compliant assessees.

These businesses had not filed their monthly GST Return (GSTR)-3B for two consecutive months. The government had notified the rule last month as an enforcement measure amid subdued revenue collection.

The GST system has been grappling with low levels of compliance. Only 65-68 per cent of eligible GST filers file the GSTR-3B within the due date, the GST Network (GSTN) data shows.

“This month, the taxpayer will be alerted with a cautionary message while generating e-way bills, in case GSTR-3B for the past two successive months of the consignor/consignee GST identification number (GSTIN) has not been filed. From next month onwards, such GSTINs will be blocked,” the note had said.

The same has become operational from December 3.

According to the data by the GSTN, the information technology backbone of the two-year-old indirect tax regime, there are 2 million GSTINs that have not filed GSTR-3B for September and October. Of these 2 million GSTINs, 347,000 GSTINs (or 16.7 per cent) had transactions in the e-way bill system for September and October, which are learnt to have been impacted immediately.

“These firms were given enough warning last month that their e-way bill system would be blocked over non-compliance. Businesses not filing returns should not be allowed to move goods,” said a government official.

Firms in Odisha and West Bengal are learnt to have been severely affected with this move. Experts said this has put these businesses in peril.

“Due to slowdown and cash crunch, taxpayers are already struggling to survive. This measure will effectively mean halting business and will have negative consequences for taxpayers and the economy,” said Pritam Mahure, leader at Pune-based accountancy firm Pritam Mahure and Associates.

“Suppose, the supplier of goods has filed GST returns in time, but the person to whom he is selling goods i.e., purchaser of goods has failed to file GST returns, in that case, the supplier who is compliant will not be able to generate e-way bill as his recipient is non-compliant,” said Vishal Raheja, deputy general manager, Taxmann.

The e-way bill facility will get unblocked within three hours of payment of dues and filing returns.

Know in Detail about the Importance of GST Reconciliation

Know in Detail about the Importance of GST Reconciliation

What do you mean by GST Reconciliation?

The concept of GST reconciliation and matching is not new as far as the taxpayers are concerned. In fact, this process has been modeled upon the former VAT and excise laws. Previously, matching of data between tax returns and the books of accounts was quite easy for most of the enterprises. Suppose if the department that is responsible for processing the returns came across some discrepancies, the taxpayer would be sent the communications, following which further inspection and audits would be done.

In the GST system, this process has gained much importance, as the rationality of the Input Tax Credit used by the businesses is being regularly checked by the GST personnel. Further, under this regime, the taxpayers are required to reconcile their data each month along with the data declared by their vendors. The return filing and processing are automated semantically, and the GST returns are inter-connected.

Some of the Common Errors which Occur During GST Reconciliation

Below given are some of the mismatches which occur during the reconciliation process:

  • Variances between the amount of credit in GSTR 3B and GSTR 2A or/and
  • Alterations in the provisional credit claimed and the actual credit which is claimable. Normally, this situation happens during transition phases
  • Differences between GSTR 3B and GSTR 1

Scrutiny notices would be sent to the taxpayers if there are any variations observed between these returns.

Mismatches can occur due to several reasons. Some of the common reasons are:

  1. Though the vendor has not declared liability on the supplies which have been already done with, the businesses have already taken credit for such purchases in the GST returns. If the businesses did not carry out the necessary follow up with the vendor to make sure that the liability is declared, the risks pertaining to such credits getting rejected may increase
  2. The mistakes which occur in the already furnished details. Mismatches can occur in the fields like the date and number of the debit note/invoice, the GSTIN of the supplier/recipient, etc. Further, if amendments are made in the GST returns of the month succeeding the relevant month during which the mistakes happened, it may lead to mismatches as well
  3. Mismatches occur in the credit availed and the liability declared by the vendor. In fact, the reasons for these variations should be recognized and reconciled accordingly
  4. Though the liability has been declared by the vendor, the credit is not availed in the GST return. Such credits should be utilized at the earliest before the due date of September returns or annual returns.

How to Select a Software/Tool which Enables Quicker Reconciliation and Guarantees 100% Compliance?

A powerful technological solution can address all of the GST reconciliation challenges in an effective manner, which in turn helps to add value to the business concerned. Some of the features which are essential for the matching and reconciliation purposes include:

  • The GST reconciliation software should have the ability to deal with huge chunks of data
  • A business owner should be able to get the data into the reconciliation system quite easily from any type of source like Excel, ERP, bill books, etc.
  • It should make the entire process seamless and efficient during each month, that the business owner can stay relaxed
  • Proactive reminders and the availability of an automated system in order to minimize human interventions would also help in making the process of reconciliation more efficient
  • The software/tool must be exceptionally intelligent to tackle any missing/wrong information like wrong dates, invoice numbers, tax rates, sale value, missing items, etc. The GST reconciliation software should be capable of providing reconciliation efficiently in all these instances
  • It should be capable of providing in-depth reporting and insights which can help deal with the challenges successfully
  • Given the fact that the GST rules keep on changing from time to time, the tool/software should be able to evolve quickly and operate as per the changes in the rules.

Carrying Out GST Reconciliation in Five Easy Steps

The reconciliation process under the GST system is all about matching the data filed by the suppliers with that of the recipients and recording all the transactions that happened during that time. Further, this process guarantees that no transactions or procurements are excluded or wrongly stated in the GST returns.

The taxpayers are required to reconcile their data with that of the vendors regularly in order to claim the Input Tax Credit (ITC) for which they are eligible. Though reconciliation is simple, it may be time-consuming as the taxpayers need to watch out on a continuous basis for any discrepancies or mismatches that may have a serious impact on the ITC claim.

Below given are five steps to handle the reconciliation process easily:

1. Under the GST reconciliation process for the relevant financial year, it is mandatory that the taxpayers need to file the entire periodic GST return. Even if the due date of a certain GST return is overlooked, it needs to be filed along with the interest or the late fee, whichever is applicable. In fact, if the GST returns are not filed in time, it may affect the matching and reconciliation procedure. Further, the taxpayers are required to keep their books of accounts up-to-date and align the tax returns in accordance with the same. Moreover, unless the entire GST returns are filed, the taxpayers would not be able to claim the ITC

2. It is important for the books of accounts and the GST return to be in agreement with each other for the purpose of claiming ITC. In addition, the taxpayers need to keep a check on the taxes paid as per the reverse charge system while they claim ITC on purchases. However, a taxpayer can benefit from the credit of taxes paid according to the reverse charge system only if the goods and/or services are utilized or would be utilized for the sake of business

3. The taxpayers need to find out the mismatches and make corrections in the relevant entries in the books of accounts. Further, they also need to amend these details in the upcoming GST return filing period. Though the GST laws do not allow to revise tax returns filed during the previous periods, they permit to file the corrected entries through an amendment return in the subsequent periodic return. Further, these entries need to be filed in GSTR 1 and GSTR 3B as well.

Ensure that the purchase register is carefully matched with GSTR 3B (uploaded on a monthly basis) and GSTR 2A details (uploaded by the supplier). It is essential to streamline the GSTR 3B return, the books of accounts, and the GSTR 2A form to avail the ITC completely on the related purchases, or else, the taxpayer may lose the ITC claim, which ends up in paying extra taxes

4. The communication between the vendors and customers is important as it results in the relentless reporting of the details as far as the GST returns are concerned. Further, the chances of omission, mismatches, or incorrect entries are considerably minimized when both the suppliers and the recipients coordinate their details and then file the GST returns. It is also important to find out the non-compliant vendors, interact with them, and address their issues which will further help the recipients to maximize their ITC. Currently, there are many best GST reconciliation software available which could provide help in minimizing the communication gap between the recipients and the suppliers. This kind of software allows the users to send a reconciliation mismatch report to the suppliers or vendors to address any issue regarding the same

5. Finally, the taxpayers are required to report all the corrected sale or purchase transactions of the relevant financial year, for the September returns.

In short, GST reconciliation is an ongoing process that should be carried out periodically in order to claim maximum credit and also to evade mismatches to a greater extent.

How the Implementation of GST has impacted the ERP – Enterprise Resource Planning Systems

How the Implementation of GST has impacted the ERP – Enterprise Resource Planning Systems

It has been quite a challenge for businesses to switch over to the GST system initially. Those players that had an effective action plan for their ERPs to migrate into the GST regime were the winners of this makeover. Data migration is a daunting task that impacts the master data and the transaction data alike and needs the deployment of adept resources. For this reason, it is essential to evaluate and recognize the areas in the ERP system which could be affected by the GST implementation.

Some of the Key Functionalities that are affected Under the GST System

Here are some of the functionalities that are affected by the implementation of GST.

  • Master Data Details – The GST law puts forward rules regarding the tax charges, location of supply of goods and services, and the time of supply. The tax rates concerning the different goods and services also vary as per these rules. To deal with such scenarios, there arises a need to re-enter the master data which includes the client’s billing and shipping addresses, inventory and warehouse details, item masters, etc. In fact, this has streamlined the different tax procedures as well as the reporting process in the ERP system
  • Chart of Accounts – Previously under the VAT system, the companies that sold goods and offered services at the same time needed to have separate account codes for transactions related to Value Added Tax (VAT) as well as Services Tax. Further, these account codes are combined under the GST system. It was mandatory for the taxpayers to carry forward the tax credit balance from the previous accounting codes to GST account codes in order to maintain the tax credit paid under the earlier system. Later on, the reconciliation of the same was made possible.
  • Reporting and Workflows – Another key change that occurred with the implementation of the GST system was related to the reporting framework and workflows. The already existing reports formatted as per the indirect tax system under the VAT regime have become out-dated and those must be re-designed according to the GST law. The merging of the tax data with the ERP system is susceptible to failure as it acts as a single point for the entire reporting process. Hence there arises the need for the implementation of more robust workflows.
  • Tax Rule Engine – A majority of the ERP systems maintain a separate tax rule engine which serves as the master repository of all the information available inside the system. This consists of details regarding tax jurisdiction, tax compliance, tax rates, and reporting. A lot of re-engineering has gone into developing this tax engine as per the GST system, and it is still undergoing up-gradation on a regular basis.
  •  Requirement of a Smart Reconciliation Tool for the ERP systems – At present, as the amendments are not made in the returns, but would be reflected only in the next month returns, it is essential to have a robust reconciliation tool implanted in the concerned ERP system in order to track changes so as to evade duplication in data. Further, the GST system is all about matching data between numerous returns like GSTR-2A with GSTR-3B returns, GSTR-1 with GSTR-3B returns, etc. To handle this situation, it requires a powerful tool that can offer details about the mismatch in the reports, recommend actions, and circumvent duplicate entries in the books. In fact, matching entries in books and returns is another strenuous task that the businesses have to encounter if the tasks are not automated. A comparison between GSTR-2A return and the purchase register is quite important, as it helps the taxpayer to claim 100% of the ITC (Input Tax Credit) for which he is eligible.
  • Communication Tool for Vendors – The adoption of AI and Machine Learning technologies can be of great help to the larger enterprises in managing the vendor accounts easily. As the GST regime involves uploading the invoice details on to GSTN and matching GST returns between the recipients and suppliers of the supply transactions, it may include regular tracking of vendor ledger accounts using the GSTR-2A return, which is auto-generated on the GST portal. Developing an automated communication tool for vendors which is embedded within the ERP system is the need of the hour that each taxpayer might be looking forward to. This is because it guarantees the timely claiming of ITC and avoids the last minute and later disputes with the vendors regarding any mismatches.

Looking into the Future

Making your organization GST ready could be compared to the implementation or re-implementation/up-gradation of an ERP system from a lower version to a higher one. In fact, it is not that simple as affecting changes in invoice tax calculations; rather, it requires a complete review of the business processes as well as makeovers. Though it sounds complicated, it is not essentially so if the fundamental concepts are understood well.

There are major changes involved in the functioning of the businesses following the GST wave. In fact, with the introduction of GST into the system, there is the same tax structure all over India, unlike it was previously when the businesses had to consider many aspects pertaining to the different states.
It is a well-known fact that businesses flourish when there is a well-structured process in place, along with proper reporting and accounting systems. Further, IT plays an important role in running a business successfully. Following the implementation of GST, a revamping of the entire business processes has become mandatory. 

Moreover, as the frequent changes in the law are becoming a tough thing for the businesses to handle and interpret, it would be necessary to conduct an impact analysis on their business processes and embed the same in their ERP systems. A major challenge is to make sure that the software is configurable and flexible to deal with such requirements so that the enterprises can implement the changes without any interruptions.

In short, making necessary changes in an ERP environment while syncing with the GST system is an intimidating task which is to be dealt with carefully to run the business smoothly.

What is “E-way Bill System”

What is “E-way Bill System”

Today, the term ‘E-way bill’ is used extensively. It refers to an electronically-generated document which is needed for the movement of goods whose value is more than Rs.50,000, from one place to another all over India, except Delhi. In the case of movement of goods within Delhi, an E-way bill needs to be created for goods whose value is more than Rs.1 Lakh. Further, this document needs to be generated online for moving goods, regardless of whether such transportation happens intra-state or inter-state. In fact, the E-way bill generated in any state is valid in every state as well as the Union Territory of India.

How long is an E-way Bill Valid?

An E-way bill is valid for a certain period as given below from the relevant date:-

Distance CoveredPeriod of Validity
Distance which is less than 100 km1 Day
For each 100 km or part thereof1 Added Day

Here the relevant date for calculating the validity of the E-way bill will be the date on which it has been generated. Further, the validity period starts from the time at which the E-way bill has been generated, and every day till the period of expiry shall be counted, which would end on the midnight of the next day of generation of E-way bill.

In exceptional cases where the goods could not be moved within the designated validity period stated in the E-way bill, the transporter needs to generate another E-way bill after updating the information in Part B of Form GST EWB 01. Further, in the case of certain goods, the commissioner may prolong the validity period of the E-way bill.

What is the Date of the Applicability of E-way Bill?

The applicability of E-way bill under the GST system is from 1st April 2018 for the transportation of goods from one state to another. Further, the E-way bill has been implemented in different stages during the period starting from 15th April 2018 to 16th June 2018. The stage-by-stage roll-out has been completed now and currently, the E-way bill is applicable in all of the states. With the introduction of E-way bill under the GST system, the way bill, a physical document which has been mandatory under the VAT regime for the purpose of transporting goods, is been replaced by the former.

Who All Are Required to Generate an E-way Bill?

The E-way bill under the GST system needs to be generated by

  • Each registered individual who is responsible for the transportation of goods
  • In connection with a supply (for example, sales); or
  • For some other reasons than supply (for example, branch transfer, sales return, etc.); or
  • Owing to inward supply received from an unregistered individual
  • Each unregistered person who is responsible for the transportation of goods.

Generation of E-way Bill by a Registered Person

If the transportation of goods is done by a registered person as a consignor (that is, seller) or the recipient of supply is carried out as a consignee (that is, buyer) in his own vehicle, or a hired one, or by vessel, or by railroad, or by air, the registered person or the recipient would be able to generate the E-way bill in Form GST EWB 01 on the common portal, after filling in the necessary details in Part B of the Form GST EWB 01.

Suppose if a registered person sends the goods to the transporter for moving those by road, and if the E-way bill for the same has not been generated, the responsibility of generating the E-way bill would be on the transporter. The registered individual should provide the information concerning the transporter first in Part B of the Form GST EWB 01 on the portal, following which the E-way bill would be generated by the transporter as per the information provided by the registered individual in Part A of the Form GST EWB 01.

Generation of E-way Bill by an Unregistered Person

If the goods are moved by a person who is unregistered under the GST regime in his own conveyance, or by means of a hired one, or via a transporter, the E-way bill would have to be generated by the transporter or by the unregistered person himself in Form GST EWB 01 on the government portal. Further, if the goods are delivered by an unregistered person to a registered person, and the latter is aware of the time of the transportation of goods, the responsibility regarding the movement of goods falls on the registered person. In such circumstances, either the transporter or the registered person would have to complete the formalities regarding the generation of the E-way bill.

What are the Responsibilities of a Transporter?

  • If the consignor (seller) or the consignee (buyer) has not generated the E-way bill and the total value of the consignment is greater than Rs.50,000, the transporter would have to generate Form GST EWB 01 as per the invoice, or delivery challan, or
    bill of supply
  • A transporter who shifts goods from one conveyance to another during
    a transit is required to modify the details of the conveyance in the E-way bill on the government portal before such transfer is made and also before he proceeds further with the movement of goods
  • If there are several consignments to be transported in a conveyance, the transporter should provide the serial number of each E-way bill generated individually with regard to every consignment on the common portal, and a consolidated E-way bill should be generated in the Form GST EWB 02 on the GST portal before moving the goods.

The Situations Where E-way Bills are not required

It is not needed to generate E-way bills in the below-mentioned circumstances:

  • The goods are moved to a distance less than 10 km within a certain state, from the business location of the consignor to that of the transporter for moving it further
  • The goods are moved to a distance less than 10 km within a particular state, from the business location of the transporter to that of the consignee
  • The goods are conveyed from the airport, port, land customs station, and air cargo complex to a domestic container yard or a freight station for the purpose of clearance by the Customs department
  • The goods are conveyed by a non-motorized conveyance
  • The transportation of goods within those areas mentioned under clause (d) of sub-rule (14) of rule 138 of the GST Rules governing the concerned state
  • For some goods like jewelry, personal and household stuff, etc.

Note: For transporting goods to a distance greater than 10 km but lesser than 50 km, the generation of E-way bill is compulsory. However, it is not required to provide the transportation details in the concerned E-way bill.

The Documents Which Are to be carried by those in Charge of Transportation

The person in charge of transportation need to carry:

  • The invoice, or delivery challan, or bill of supply, and
  • A copy of the E-way bill or the E-way bill number, either physically or connected to a Radio Frequency Identification Device which is implanted on to the conveyance in a manner which is notified by the commissioner.

To sum it up, here the rules and regulations concerning the E-way bills are discussed in detail to provide an insight into the entire procedure.

What is GSTR 9? Have a Thorough Knowledge about GSTR 9 Online Filing Procedure

What is GSTR 9? Have a Thorough Knowledge about GSTR 9 Online Filing Procedure

These days you might have come across different types of returns which are to be filed under the GST regime. Here, we shall discuss the filing process of the GSTR 9 return in detail. GSTR 9 refers to an annual return which should be filed on a yearly basis by those taxpayers who are registered under the GST system. Further, it includes details related to inward and outward supplies received or made during the preceding year under various heads like SGST, CGST, IGST, and HSN codes. In fact, it is a consolidated statement of the entire monthly/quarterly returns such as GSTR 1, GSTR 2A, GSTR 3B, etc., which are filed during the relevant year. Though this return seems to be a bit complicated, it helps in the reconciliation of data, thereby facilitating complete transparency in the disclosures.

Who All are required to File GSTR 9?

All those taxpayers or taxable individuals who are registered under the GST regime are required to file their GSTR 9 return. Anyhow, the below-mentioned individuals need not file this return:

  • Those taxpayers who opt for composition scheme (they should file GSTR 9A)
  • Input service distributors
  • A casual taxable person
  • Those individuals who pay TDS under section 51 of the CGST Act
  • Non-resident taxable individuals

Important Note: According to the decision made in the 37th GST Council meeting held on 20th September 2019, the GSTR 9 filing for businesses that have a turnover up to Rs.2 crore have been made optional for FY 17-18 and FY 18-19* (*this has been subject to notification).

Due Date, Late Fee, and Penalty for Not Filing GSTR 9 Return

The annual GSTR 9 return form should be provided on or before 31st December in the concerned financial year bracket. In fact, the due date for filing GSTR 9 has been further prolonged to November 30th 2019.
If the GSTR 9 return has not been filed within the due date, the late fee is Rs.100
per day, according to both CGST and SGST Act. In other words, the total liability would be Rs.200 per day of default. Further, this would be subject to a maximum of 0.25% of the turnover of the taxpayer in the concerned state or Union Territory. Anyhow, as per the IGST Act, no late fee is required.

The Important Details Which are Required to be filled in the GSTR 9 Form

The GSTR 9 form has been broadly divided into 6 parts and 19 sections. Every part asks for information which is readily available from the previous returns as well as the books of accounts. Generally, the disclosure of annual sales needs to be done in this form, dividing it between the cases which are subjected to taxation and those which are not subjected to taxation. As concerned with the purchase side, the annual value of inward supplies, as well as the corresponding ITC (Input Tax Credit) availed, should be furnished. Further, these procurements should be categorized as inputs, capital goods, and input services. Moreover, the information concerning ITC that should be reversed owing to ineligibility should also be entered.

GST Software, Eway Bill Solution

The Different Types of Annual GST Returns

There are different types of annual returns which come under GST:

  • GSTR 9 Annual Return Form: A regular taxpayer who files GSTR 1 and GSTR 3B forms need to file the GSTR 9 return
  • GSTR 9A: All the composition scheme holders under GST are required to file the GSTR 9A return
  • GSTR 9B: All e-commerce operators are required to file the GSTR 9B return during a financial year
  • GSTR 9C: Those taxpayers whose annual turnover cross Rs.2 crore need to file the GSTR 9C return during a financial year. Further, these taxpayers need to collect the accounts which are to be audited, along with a copy of the tax reconciliation statement which has been already paid, the audited annual accounts, and the tax payable according to the audited accounts.

To summarize, you would be able to get a gist of the GSTR 9 online filing procedure from the information furnished here.

Explore the Salient Features of GSTR-1

Explore the Salient Features of GSTR-1

GSTR-1 refers to a particular kind of return for outward supplies, which should be filed by each registered dealer on a monthly or quarterly basis. It necessarily indicates the entire sales transactions of a business. This return is segregated into 13 sections which are listed below:

  1. The GSTIN of the business you are engaged in (you can also use a provisional Id as GSTIN, if you do not have one)
  2. The exact legal name of the business
  3.  The aggregate turnover achieved in the last financial year
  4. The taxable supplies/sales offered to registered individuals including UIN-holders
  5. Taxable sales/supplies offered to unregistered individuals who stay outside their base state and that exceeding Rs.2.5 Lakhs (which implies inter-state sales to unregistered individuals, which exceeds Rs.2.5 Lakhs)
  6. Export sales which is deemed and zero-rated
  7. Sales offered to unregistered individuals which is not included in the 5th point
  8. The entire sales which is carried out via an e-commerce operator
  9. The inter-state sales made to unregistered individuals up to an amount of Rs.2.5 Lakhs
  10. Exempted, nil-rated, and non-GST supplies – those which are exempted and not included in the above points
  11. Amendments made in taxable supplies/sales to registered businesses in the preceding months
  12. Amendments made in taxable supplies/sales to unregistered businesses in the past months
  13. Information regarding advances adjusted or received during a month, from the clients
  14. The HSN summary for outward supplies
  15. The documents which are issued during a month, which contain information on the invoice serial numbers, debit notes, and credit notes for the month.
Due Date For GSTR1

What is the Due Date for Filing GSTR-1?

The due date for filing GSTR-1 depends on the turnover of the business. Those businesses which have sales up to Rs.1.5 Crore would have to file quarterly returns whereas, other taxpayers that have sales more than Rs.1.5 Crore would have to file monthly returns which will be 11th of every month.

Who All Are Required to File GSTR-1?

Each registered person is needed to file GSTR-1, regardless of whether there are any transactions carried out during a particular month or not.

The list of registered individuals who are exempted from filing the return are given below:

  • Composition Dealers (The composition scheme is an easy scheme under GST for small-time taxpayers, in which they can avoid complicated GST formalities and remit GST for a fixed turnover rate. This scheme is applicable for those taxpayers that have a turnover less than Rs.1.0 Crore (as per a notification of CBIC, the threshold limit has been increased from Rs.1.0 Crore to Rs.1.5 Crore))
  • Input Service Distributors (An Input Service Distributor or ISD refers to a business for which invoices are issued for the services used by its branches. The tax paid is disbursed to these branches on a proportional basis by means of an ISD invoice. Further, though these branches can have dissimilar GSTINs, they need to have the same PAN as the ISD)
  • Those who are suppliers of Online Information and Database Access or Retrieval (OIDAR) services and have to pay tax by themselves according to Section 14 of the IGST Act
  • The taxpayers who are accountable to collect TCS (The TCS or the Tax Collected at Source refers to the tax owed by a seller which he collects from a buyer during the time of sale. There are certain organizations or people that are classified as sellers for TCS such as the State and Central governments, local authorities, statutory corporation or authority, the companies registered under the Companies Act, the partnership firms, etc. Similarly, there are a few buyers that are liable to pay TCS to the sellers like the Central and State governments, public sector companies, sports and social clubs, etc.
  • The taxpayers who are accountable to deduct TDS (The TDS or Tax Deducted at Source is a method to levy tax based upon a particular percentage on the amount, which should be paid by the receiver on services or goods. The tax which is collected thus would be taken as revenue by the government. The government agencies, local authorities, the departments or establishments belonging to the State or Central government, and some categories of people as per the notification of the government are liable in deducting TDS under the GST Law. Further, according to a recent notification, a board, or an authority, or any other body which is set up by the government, or a State Legislature, or Parliament, of which 51% equity is owned by the government are supposed to deduct TDS. Others who are eligible to deduct TDS include, a society which is registered under the Societies Registration Act, 1860 and has been established by a local authority or any State or Central government, and the public sector undertakings.
  • A non-resident taxable person (As per the GST Law, a non-resident taxable person refers to any individual who performs transactions which include the distribution of services or goods, or both, either as an agent or a principal, or in any other capacity, but do not have a residence or permanent place of business in India).

Is it Possible to Revise GSTR-1?

Once a return is filed, it is unable to revise the same. If there are any mistakes made in the filing of the return, it could be corrected in the next monthly or quarterly return. For example, if there is a mistake made in the September GSTR-1, you are able to rectify it in the October GSTR-1.

Consequences of Late Fee and Penalty

There is a late fee imposed if you do not file GSTR-1 on time, which is Rs.200 for each day of delay (Rs.100 each according to CGST and SGST Act. The late fee is charged from the date succeeding the due date.  As per a recent update, for nil returns, the late fee has been reduced to Rs.50 and Rs.20 for each day.

To sum it up, it is essential to know the basics of the GSTR-1 return before filing the same to avoid any mistakes. This blog gives an outline of what GSTR-1 is all about.

Only 7% taxpayers will be required to submit monthly GST returns

Only 7% taxpayers will be required to submit monthly GST returns

About 93 percent of the goods and services taxpayers will be relieved of monthly return filing from the next fiscal year once the new simplified return system comes into effect from April 2020. The new return system will not only make compliance easier for businesses but also plug leaks with respect to input tax credit claims.

GSTN is currently conducting outreach programmes to make the industry familiar with the new return system.

Those with an annual turnover of less than Rs 5 crore will have the option of filing quarterly returns but will need to pay taxes on a monthly basis. Those with an annual turnover of over Rs 5 crore will need to file monthly returns.

“About 70 percent of taxpayers will get covered under quarterly return filing, taking the pressure off them. With 22 percent having nil turnover, it leaves just 7 percent taxpayers to file monthly returns,” said Prakash Kumar, chief executive officer, Goods, and Services Tax Network (GSTN), the technology backbone of India’s indirect tax regime.

The new return system requiring fewer details was earlier expected to be introduced from October, but the GST Council in its last meeting held in Goa decided to postpone it to April 1, 2020, to give time to taxpayers to adapt to the new system. Sahaj and Sugam are the two returns that could be filed by small taxpayers, having a turnover of Rs 5 crore or less, depending on whether they have business-to-consumer (B2C) or business-to-business transactions or a mix of both.

Of the 70 percent of taxpayers eligible for quarterly return filing (Return 1, Sugam, and Sahaj), around 28 percent of taxpayers are those that deal with only B2C supplies.

In the current system, taxpayers are required to file GSTR-1 for outward supplies and GSTR-3B, which is a summary return for sales and input tax credit. Taxpayers with a turnover of up to Rs 1.5 crore are allowed to file GSTR-1 on a quarterly basis but have to file GSTR-3B on monthly basis.

The last date for quarterly return filers will be the 25th of a month, whereas for monthly filers it will be 20th of every month.

Besides, a buyer will not be able to claim the input tax credit if the seller or supplier misses uploading the invoice. This will essentially plug the existing gap, which allowed buyers to claim input tax credit even for missing invoices, which was leading to higher input tax credit claims versus actual taxes paid on inputs.

In the existing system of return filing, the buyer is allowed to edit the invoice and send it back to the supplier, who, in turn, accepts or rejects the edited invoice, creating complexity in the return filing mechanism. “The new system will be a unidirectional one, which will not allow the buyer to make any changes in the invoice filed by the supplier. He will be allowed to only accept or reject and be sent back for amendments,” said Kumar.

GSTN is currently conducting outreach programs to make the industry familiar with the new return system. It has already covered 19 cities so far, with more than 3,000 participants.

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GST Council meet: Rate cut for auto sector may not be easy; relief on hotel tariffs, biscuits on the cards

GST Council meet: Rate cut for auto sector may not be easy; relief on hotel tariffs, biscuits on the cards

The GST Council meeting, as per the agenda paper, may take up automobiles, hotels, biscuits, matchsticks and outdoor catering segments for resetting of the GST rates. However, all listed items may not see GST cut due to various complexities involved

With the government desperate to reverse the prevailing economic slowdown, the GST Council is all set to make major announcements on Friday. The high-powered GST Council will discuss the agendas on tax cuts for sectors with the high-consumer interface or high distress amid a significant fall in demand and sales.

The GST Council meeting, as per the agenda paper, may take up automobiles, hotels, biscuits, matchsticks and outdoor catering segments for resetting of the GST rates. However, sources suggest all listed items may not see the GST cut due to various complexities involved.

The automobile sector, which is virtually driving the current economic slowdown, has been demanding a reduction in GST on cars to 18 percent from 28 percent for long. The auto players feel the GST meet is happening at the right time — in a few days from now, the festive season will kick-start and companies will roll out offers to boost sales. They say a rate cut along with festival offers could reinvigorate the auto sector. Several states, including Kerala, which fear it’ll lead to a drop in revenue, have opposed the move. The GST Council’s fitment committee had assessed the rate cut impact on the auto sector and also said it would seriously hurt the GST collection, as auto sales contribute almost Rs 50,000-60,000 crore to the total GST collection.

Sources, however, say it’s more of a political call the govt has to take. The Centre may also explore the possibility of a significant cut for a certain period to assist the sector. But the industry players feel a limited period offer will not address the persisting crisis, as prices are likely to shoot up again with the introduction of BS-VI compliant vehicles. This will again push the sector towards a crisis, which is why the auto manufacturers are pushing for a long-term solution. They have also demanded a significant GST cut for low engine capacity two-wheelers, which are not luxury items.

There could be some cheer for the hotel industry. The government is likely to provide relief to the luxury hotel category, which charges Rs 7,500 per night or more and invites a 28 percent levy. A source said with the government’s added emphasis on tourism, including Prime Minister Narendra Modi’s call to travel to different destinations in India, the GST Council might raise the ceiling for the 18 percent tax category to Rs 10-12,000 per night.

Outdoor caterers, who are charged 18 percent tax, may also get some relief. The matchstick and matchbox industry has been struggling due to the two kinds of GTS taxes, and the Council may provide some relief to them too.

Sectors such as cement and textiles may also get some good news in terms of GST cut.

With the GST collection dipping to sub Rs 1-lakh crore mark last month, the Council is also considering raising the taxes on items, which are unofficially called “sin goods”, like tobacco. The move could help the Centre increase its revenue.

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GST boost in real estate on finance ministry’s radar

GST boost in real estate on finance ministry’s radar

On Sunday, finance minister Nirmala Sitharaman held two separate meetings — the first with realtors’ associations, and the second with homebuyers’ groups — to discuss how to strengthen the realty sector.

The Union government is planning to incentivise homebuyers and create demand in the sluggish real estate sector with a slew of measures, including a proposal by homebuyers that would marginally increase Goods and Services Tax (GST) on housing projects but bring down the overall cost, people aware of the development said on condition of anonymity.

On Sunday, finance minister Nirmala Sitharaman held two separate meetings — the first with realtors’ associations, and the second with homebuyers’ groups — to discuss how to strengthen the realty sector.

Homebuyers who met the minister proposed that GST on premium housing projects be increased from the existing 5% (excluding input tax credit) to 8% (including input tax credit) — a move that would eventually reduce the cost of a project substantially, said one of the persons aware of the development.

“Needless to say, that the present GST regime of 5% without ITC [input tax credit] is actually translating into a tax burden of around 14% for consumers… An 8% tax with ITC will offset tax paid by builders on building materials such as tiles, cement and sanitaryware, and bring down the cost,” said Abhay Upadhyay, the president of the Forum for People’s Collective Efforts (FPCE), a pan-India forum for homebuyers. Upadhyay was present at the meeting with the finance minister.

Input credit means a builder can deduct the tax paid on inputs and pass on the reduced tax liability to the buyer of an apartment at the time of paying tax on output (the final product).

The group of homebuyers suggested that such a move, if implemented, would encourage people to invest in properties, a second official said. He clarified that any such decision would require approval of the GST Council, which comprises representatives of states.

The developers, for their part, raised three major issues: liquidity problems, taxation issues and completion of stalled projects.

Niranjan Hiranandani, president of the National Real Estate Development Council (NAREDCO), who was present in the meeting, said real estate and infrastructure growth was a must to boost the economy and create jobs.

The Confederation of Real Estate Developers’ Associations of India (CREDAI) said the Sunday meeting indicated a sense of “earnestness and urgency” in a formal statement.

In its 33rd meeting in February, the council reduced GST rates on under-construction affordable residential properties (valued up to Rs 45 lakh) to 1% from 8% without input tax credit, and to 5% from 12% for the premium segment housing.

Then finance minister and chairman of the council, Arun Jaitley, said at the time that the move would “give boost to housing for all and fulfil aspirations of neo and middle classes”. It was a revenue-neutral decision that was taken because some builders were not passing on the benefit of tax rebates to customers.

On Sunday, Sitharaman assured both builders and homebuyers that the government will take further steps to resolve policy issues, particularly liquidity problems faced by the industry as well as project delays, a third government official present at the meeting said.

First, real estate developers made a presentation and discussed their issues. Then, homebuyers took up their issues with Sitharaman after developers left the conference hall, the third official said.

Besides senior finance ministry officials, Hardeep Puri, the minister of state for home for housing and urban affairs, and Anurag Thakur, the minister of state for finance and corporate affairs, were present at the meetings.

Representatives of homebuyers who have paid money to developers and have been awaiting possession for several years asked the government to direct banks to treat them compassionately, and not like a business entity.

“The government should provide some relief either in terms of deferring EMI [equated monthly instalment] payments or provide some income tax rebate to protect consumers who are paying both rent and EMIs,” said Jayashree Swaminathan, who represented homebuyers of the Jaypee Group.

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