GST Registration and Return filling

What is GST in India?

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words, Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

Advantages of GST

GST eliminates the cascading effect of tax
GST is a comprehensive indirect tax that was designed to bring indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax that was evident earlier.
Cascading tax effect can be best described as ‘Tax on Tax’. Let us take this example to understand what is Tax on Tax:

GST Exemption Limit

Under the Goods and Services Tax (GST) regime in India, businesses whose annual revenue exceeds specific thresholds are required to register and pay GST. Currently, the GST Exemption Limit is set at Rs. 40 lakhs for goods and Rs. 20 lakhs for services. Businesses with annual revenues below these limits are not mandated to register for GST; however, they may opt to do so voluntarily.

It’s important to note that special category states in India have different threshold limits due to their unique economic environments.

For these states, the GST exemption limit for the supply of goods is set at Rs. 20 lakhs and for services at Rs. 10 lakhs.

The GST Council has recommended that all businesses, irrespective of their turnover exceeding Rs. 40 lakh, should register for GST to ensure a uniform tax structure.

Categories with Compulsory GST Registration Requirements

Regardless of turnover, certain categories of persons must compulsorily register under GST. These include:

Interstate Suppliers: Those who supply goods and services across state lines.
Casual Taxable Persons: Individuals who occasionally undertake transactions involving the supply of goods or services, either in a state where they have no fixed place of business or from more than one state.
Persons Taxable Under Reverse Charge Basis: Individuals who are liable to pay GST under the reverse charge mechanism.
Non-resident Taxable Persons: Those who reside outside India but supply goods or services to residents within India.
Persons Required to Deduct TDS Under GST: Entities that are mandated to deduct tax at source under GST regulations.
Persons Required to Deduct TCS Under GST: Those required to collect tax at source.
Input Service Distributors: Entities that receive invoices for services used at multiple locations, which are then distributed to these locations.
Persons Making a Sale on Behalf of Someone Else: This applies whether acting as an agent or principal.
E-commerce Operators: Those providing a platform for others to supply goods or services through it.
Suppliers Who Supply Goods Through E-commerce Operators: These operators are responsible for collecting tax at source.
Online Service Providers from Outside India: Providers who offer services from abroad to non-registered persons in India.

These provisions ensure that while smaller businesses can benefit from threshold exemptions to ease their operational burdens, critical sectors and transaction types remain regulated and compliant under GST norms.

NOW QUESTION ARISE IN OUR MIND -What is GST Return? Who Should File, Due Dates & Types of GST Returns?

All GST registered businesses have to file monthly or quarterly GST returns and an annual GST return based on the type of business. These GSTR filings are done online on the GST portal.

What is a GST Return?

A GST return is a document containing details of all income/sales and/or expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to file with the tax administrative authorities. This is used by tax authorities to calculate net tax liability.

Under GST, a registered dealer has to file GST returns that broadly include:

Purchases
Sales
Output GST (On sales)
Input tax credit (GST paid on purchases)

Who should file GST Returns?

Under the GST regime, regular businesses having more than Rs.5 crore as annual aggregate turnover (and taxpayers who have not opted for the QRMP scheme) have to file two monthly returns and one annual return. This amounts to 25 returns each year.

Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under the QRMP scheme. The number of GSTR filings for QRMP filers is 9 each year, which include 4 GSTR-1 and GSTR-3B returns each and an annual return. Note that QRMP filers have to pay tax on a monthly basis even though they are filing returns quarterly.

There are also separate statements/returns required to be filed in special cases such as composition dealers where the number of GSTR filings is 5 each year (4 statement-cum-challans in CMP-08 and 1 annual return GSTR-4).

How many returns are there under GST?

There are 13 returns under GST. They are the GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08, and ITC-04. However, all returns do not apply to all taxpayers. Taxpayers file returns based on the type of taxpayer/type of registration obtained.