The Goods and Services Tax (GST) has been a landmark reform in India’s indirect tax system. The GST return filing services bringing significant changes to the way businesses operate and file their taxes. Since its implementation, the GST has gone through various amendments to make it more robust and efficient.
In this blog, we will delve into the process of GST return filing under both the new and old tax regimes. We also shed light on the key differences and help you calculate your tax return for the financial year 2023-2024.
What is ‘GST Return Filing’?
GST return filing is a mandatory process for businesses registered under the GST regime. It involves reporting the details of sales, purchases, and tax liabilities to the government.
The frequency of filing GST returns depends on the type of business and its turnover. Typically, taxpayers are required to file monthly or quarterly returns.
GST return filing under the old tax regime:
Before the introduction of GST, the Indian indirect tax system consisted of various indirect taxes. These incorporated VAT, excise duty, service tax, entertainment tax etc. Each of these taxes had its separate return filing procedure, resulting in a complex and cumbersome process for businesses.
Under the old tax regime, businesses had to file multiple returns, depending on the taxes applicable to them. For instance, a manufacturer had to file excise returns and VAT returns, while a service provider had to file service tax returns.
GST return filing services under the new tax regime:
The introduction of GST on July 1, 2017, brought about a significant change in India’s tax landscape. The GST replaced multiple indirect taxes with a single tax, streamlining the entire taxation process.
Under the new tax regime, businesses are required to file various GST returns based on their category:
GSTR-1: Outward supplies (sales) return – Monthly or quarterly, depending on turnover.
GSTR-3B: Summary return with details of outward and inward supplies, and tax payment – Monthly.
GSTR-4: Quarterly return for Composition Scheme taxpayers.
GSTR-5: Return for Non-resident Foreign Taxpayers – Monthly.
GSTR-6: Input Service Distributor (ISD) return – Monthly.
GSTR-7: Receive for Tax Deducted at Source (TDS) – Monthly.
GSTR-8: Return for Tax Collected at Source (TCS) – Monthly.
GSTR-9: Annual return – Yearly.
GSTR-10: Final return for taxpayers who cease their business operations – Once.
Key differences between the old & new regime:
The new GST return filing services in the new GST regime offer several advantages over the old tax system.
- Simplified process:
GST has streamlined the tax filing process by consolidating multiple taxes into one. Hence, it reduces paperwork and administrative burdens for businesses.
- Input Tax Credit:
The GST allows businesses to claim an input tax credit on their purchases. Thus, GST ensures that they do not pay tax on the taxes already paid by their suppliers. This fosters a more transparent and efficient tax system.
- Composition scheme:
Small taxpayers with an annual turnover below a specified limit have the option to opt for the Composition Scheme, wherein they can pay taxes at a fixed rate and file quarterly returns.
- E-commerce operators:
The new regime also brought e-commerce operators under its ambit. It effectively makes them liable to collect and remit tax on behalf of their sellers.
- Threshold for registration:
Under the old regime, businesses had to register for various taxes separately based on different turnover thresholds. However, GST has a uniform threshold for registration across the country, promoting ease of doing business.
Calculating GST return for FY 2023-2024:
Calculating your GST return involves determining your tax liability and input tax credit.
Tax liability: To calculate your tax liability, you need to add the GST applicable to your outward supplies and deduct the input tax credit available. The resultant figure is the tax amount you need to remit to the government.
Input Tax Credit: Keep track of the GST paid on your purchases, as you can claim input tax credit on them while filing your return. Ensure that your suppliers have filed their returns and deposited the taxes they collected on your behalf.
Why you may require professional assistance for GST return filing?
While GST has its benefits, the process of filing GST returns can be quite complicated for businesses, especially for newcomers.
- One of the key reasons why GST return filing is challenging is the requirement to file multiple forms with varying frequencies. Businesses need to submit GSTR-1 for outward supplies, GSTR-3B for monthly summary, and GSTR-9 for annual returns, among others. Each form has its set of details and deadlines, making the process cumbersome and prone to errors.
- GST rules and regulations are subject to frequent changes, which can be confusing for taxpayers to keep up with. Non-compliance or incorrect filing may lead to penalties and interest, adding to the complexities faced by businesses.
- Reconciling Input Tax Credit can be another headache for businesses. It is because, this must ensure that the credits claimed match with the supplier’s invoices uploaded on the GST portal.
- The GST portal’s technical glitches and connectivity problems have been a long-standing concern for taxpayers. These issues may cause delays in filing returns on time, further complicating the process.
GST return filing can be complex, especially for businesses with multiple transactions. So, you may like to consider professional assistance from Consultaxx to ensure accurate compliance and avoid penalties.
End note:
GST return filing services has undoubtedly transformed India’s tax landscape, simplifying tax compliance for businesses while fostering transparency and efficiency. As we enter the financial year 2023-2024, understanding the GST return filing process is crucial for every registered taxpayer.
By embracing the new tax regime, businesses can leverage the benefits it offers. Business owners can streamline their operations and contribute to the nation’s economic growth. Stay updated and file your returns diligently to build a successful and compliant business in the GST era.
