How to keep up with GST compliance

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GST requires regular compliances and procedures to be followed by those coming under its ambit.

GST or the Goods and Services Tax is a statute implemented on 1st July 2017 with the motive to have a nationwide single tax structure governing the transactions related to goods and services wherein, taking a revolutionary move, the introduction of GST as an indirect tax replaced almost all the central and state indirect taxes, such as VAT, Service tax, Excise duty, etc.

GST compliances and procedures

GST requires regular compliances and procedures to be followed by those coming under its ambit.

The procedures to be followed listed down inclusively as below:

  • Enrollment related compliances
  • Invoicing related compliances
  • Returns related compliances
  • Other compliances

Registration compliances:

The registration part is the foremost compliance under GST is registration. It is a turnover based compliance wherein, any person who has a turnover exceeding Rs 40 lakh in goods and Rs 20 lakh in services in the previous financial year needs to get registered in the GST regime and thus, start following other compliances as a registered supplier.

Invoicing related compliances:

Any person registered in GST needs to then follow other compliances in which one of the daily procedures is invoicing.

Every registered dealer under GST needs to be compliant with certain details while issuing a tax invoice which lists down as under:

  • Invoice number and date
  • Customer name
  • Shipping and billing address
  • Customer and taxpayer’s GSTIN (if registered)**
  • Place of supply
  • HSN code/ SAC code
  • Item details i.e. description, quantity, unit, the total value
  • Taxable value and discounts
  • Rate and amount of taxes
  • Whether GST is payable on a reverse charge basis
  • Signature of the supplier

The above details are mandatory in a GST invoice to ensure compliance.

Returns related compliances

The filing of return is one of the most important things in compliance under the GST. GST law registered dealer, needs to file a statement of the transactions of the business i.e. returns on a monthly/quarterly/annual basis (As applicable on the dealer registration nature).

The major forms of these returns and applicability are:

  • GSTR-1 is the return to be furnished for reporting details of all outward supplies of goods and services made.
  • GSTR-3B is a monthly self-declaration to be filed, for furnishing summarized details of all outward supplies made, input tax credit claimed, tax liability ascertained and taxes paid. It is filed by all taxpayers registered under GST.
  • GSTR-9 return is filed annually by taxpayers under GST having turnover of over Rs 2 crores in the financial year, containing details of outward sales supplies made, inward purchase supplies received during the previous year under various tax heads along with details of taxes payable and paid. It is a consolidation of all the monthly or quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed during that year.
  • GSTR 9C is proposed for abolishment in the Finance Budget for 2021. It was a reconciliation statement between the returns filed and the financial statements of the registered dealer having a turnover of more than Rs 5 crore.

Other compliances under GST – Some other compliances followed according to the nature of their business are:

EWay Bill- It is an Electronic Waybill for the movement of goods. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs 50,000 (Single Invoice) without the cover of an e-way bill.

Payment of tax- A person who has a liability to pay tax on his outward supplies/sales needs to pay the taxes while filing the return GSTR3B monthly or quarterly as applicable.

By Lionel Charles, CEO, IndiaFilings

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