Under the GST system, businesses will levy GST on their sales and deposit the same with the tax authority every month. Subsequently, a monthly summary of all sales transactions will have to be submitted online to the tax department. This process is known as return filing and the form in which the return is to be filed is called a GST return.
GST return filing is a mandatory compliance even if there are no sales and purchases carried out by a business during the return period. Such tax payers will have to file a ‘nil’ return. Failure to file returns in time may attract penalty, and in case of non-compliance, a notice from the tax authorities.
All the details of the outward supplies or sales made by the tax payer is required to be filed in this return.
This is an important form, and provides the basis for all future flow and match of input and output credit settlements. The form contains 13 different heads, including:
With respect to the last point, tax payers must note that unlike the current regime, the GST does not provide a provision for revised returns.
The tax information on purchase transactions is automatically filled in the GSTR-2 of the tax payer as the same information is provided by the vendors or suppliers to the tax payer in their respective GSTR-1 forms. The tax payer just has to validate the pre-filled information provided by the vendor, and make modifications if any.
Small businesses, including startups and small and medium enterprises (SMEs), which do not have the requisite resources and expertise to comply with the new tax regime, have a provision to opt for the ‘Composition Scheme’ under GST.
Such tax payers are called compounding tax payers and are required to file summarized returns only on a quarterly basis through GSTR-4, instead of filing three monthly returns.
The scheme can be availed by businesses dealing only in goods
Annual Return is a detailed return form that provides information on all the income and expenditure of the tax payer and regroups them in accordance with the monthly returns. It provides tax payers with an opportunity to correct for short reporting of sales, if any.
A reconciliation statement includes the value of supplies declared in the return filed for the financial year with the audited annual financial statement.
The due date for filing Annual Return is December 31, following the end of the financial year for which it is filed.