“The Goods and Services Tax (GST) is a tax on goods and services consumed in India. GST is an indirect tax that has replaced many other indirect taxes in India, such as excise duty, VAT, and services tax. GST has been in force from 1st July, 2017 based on the Goods and Service Tax Act passed by the Indian Parliament on March 29, 2017.
GST Registration is required for the businesses whose turnover gets over Rs. 40 lakhs* for sale of goods (Rs 20 lakhs for North Eastern – All hilly states for sale of goods). There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).”
GST Registration is required for the businesses whose turnover gets over Rs. 40 lakhs* for sale of goods (Rs 20 lakhs for North Eastern – All hilly states for sale of goods). There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).”
What are the Benefits of GST Registration?
- Simplifies Taxation Services
- Reduction in Costs of Products & Services
- Uniformity in Taxation Process
- Higher Threshold for Registration
- Composition Scheme for Small Businesses
- Simple and Easy Online Procedure
What are the Eligibility Criteria for GST Registration?
Section 22 and 24 of CGST Act 2017 deals with registration requirement under GST. The below mentioned persons/ entities are required to get registered under GST –
- Any business entity whose aggregate turnover in a financial year exceeds Rs 40 lakhs (Rs 20 lakhs for special category states in GST).
Note-This clause does not apply if the entity is only dealing in supply of goods/services which are exempt under GST - Every entity who is registered under an earlier law of taxation (i.e., Excise, VAT, Service Tax, etc.) needs to get register under Goods and Service Tax.
- Any entity or supplier dealing in inter-state supply of goods.
- Casual taxable person
- A tax-payer under the reverse charge mechanism
- Input service distributor and its agent
- E-Commerce operator or aggregator*
- Non-Resident taxable person
- Agents of a supplier A Person who supplies through E-commerce aggregator.
- Entities who are providing online information, acquiring database, or retrieval services from a place located outside India to a person in India, other than a registered taxable person.
What are the Types of GST Registration?
After being registered, the GST council assigns a particular category to the entity. The kind of category that will be assigned will depend on the nature of their business as well as the scale of operation. Those can be found below.
Most Indian businesses fall under this category. One does not have to provide any deposit in order to become a normal taxpayer. Additionally, there is no expiry date for such businesses who are essentially termed as Normal Taxpayers.
People who aspire to set up a seasonal shop or stall tend to opt for this particular category. If an individual is a casual taxable person, they must deposit an advance amount equivalent to the expected GST liability at the time the stall or seasonal shop becomes operational. The validity of GST registration is 3 months by default but it can be extended or altered.
If one wishes to obtain the GST Composition Scheme, one must go for this option. They will be required to deposit a flat amount if they are doing the same. However, it must be noted that such taxpayers cannot obtain Input Tax Credit.
If an individual resides outside India but they supply goods to Indian residents, they have to opt for this type of GST Registration. Much like in the case of Casual Taxable Persons, they will be needed to pay a deposit which should be equal to an estimate of the expected GST liability during the time the GST registration is active.
Additionally, much like in the case of Casual Taxable People, the validity of the same is set at three months by default, but the same can be changed or renewed at any given point in time.
Additionally, much like in the case of Casual Taxable People, the validity of the same is set at three months by default, but the same can be changed or renewed at any given point in time.
Documents required for GST Registration:
For Sole Proprietorship Firm
- PAN card of the owner
- Aadhar card of the owner
- Photograph of the owner (in JPEG format, maximum size – 100 KB)
- Bank account details*
- Address proof*
- PAN card of all partners (including managing partner and authorized signatory)
- Copy of partnership deed
- Photograph of all partners and authorised signatories (in JPEG format, maximum size – 100 KB)
- Address proof of partners (Passport, driving license, Voter identity card, Aadhar card etc.)
- Aadhar card of authorised signatory
- Proof of appointment of authorized signatory
- In the case of LLP, registration certificate / Board resolution of LLP
- Bank account details
- Address proof of principal place of business
- PAN Card of HUF and the Passport size Photograph of the Karta.
- Id and Address Proof of Karta and Address proof of the place of business.
- Bank Account Details
- Pan card of the Company
- Certificate of incorporation of Company
- MOA and AOA of the company
- Identity Proof and address proof of all directors and Authorised signatory of the Company
- Passport size photograph of the directors and authorized signatory
- Copy of Board resolution passed for appointing authorized signatory
- Details of Bank account opening
- Address proof of the place of business.
Penalty for Not Registering Under GST:
It must be noted that non or late registration of an individual’s business with the GST council attracts 10% of the due amount in the case of errors that are genuine. However, the minimum penalty is Rs.10,000. However, if the powers that be suspect that an individual is deliberately trying to evade tax, the penalty that will be levied on them will be a total of 100% of the due tax amount. Hence, it is extremely important for an individual to carry out the due diligence as soon as they can.
GST Return
GST Return: What does it mean?
A GST return is a form that a taxpayer registered under the Goods and Services Tax (GST) law must file for every GSTIN registered. Also, the status of the GSTIN should be active if the taxpayer regularly files the returns. You can verify the same using our GST search tool.
Who should file GST Returns?
In GST every registered person has to file his return on a periodically basis.
What are the different types of GST Returns?
As per the GST law, the following table lists all the returns that need to be filed, including the due dates for each. Please keep in mind that the following details are subject to change as per the CGST Act and official notifications circulated by the Central Board of Indirect Taxes and Customs (CBIC).
A GST return is a form that a taxpayer registered under the Goods and Services Tax (GST) law must file for every GSTIN registered. Also, the status of the GSTIN should be active if the taxpayer regularly files the returns. You can verify the same using our GST search tool.
Who should file GST Returns?
In GST every registered person has to file his return on a periodically basis.
What are the different types of GST Returns?
As per the GST law, the following table lists all the returns that need to be filed, including the due dates for each. Please keep in mind that the following details are subject to change as per the CGST Act and official notifications circulated by the Central Board of Indirect Taxes and Customs (CBIC).
| GST Return Form | What does the form contain and who should file it? | How often should the return be filed and what is the due date? |
|---|---|---|
| GSTR-1 | Registered taxpayers should mention the details of: •outward supplies and goods (sales transactions) •credit and debit notes issued • all changes made in sales invoice from previous tax periods | For businesses with turnover more than INR 1.5 crore: •Frequency of filing return is monthly •Due date is 11th of the upcoming monthly For businesses with turnover less than INR 1.5 crore: •Frequency of filing return is quarterly •Due date is 31th of the upcoming monthl after the quarter |
| GSTR -2 | Registered taxpayers should file it. The return should contain the details of: • inward supplies and goods (purchase transactions) • previous month’s purchase invoices and taxes collected • all changes made in sales invoice from previous tax periods • future supply orders against which advances have been received Note: Since GST’s implementation, GSTR-2 has been suspended. | Frequency of filing return is monthly and the due date is the 15th of the upcoming month. |
| GSTR-3 | A registered taxpayer files GSTR-3 return with particulars that are auto-retrieved from details mentioned in GSTR-1 and GSTR-2. GSTR-3 returns carry details, such as: • CGST, SGST, and IGST details for tax paid • liability, cash ledger, input tax credit, • requests to claim excess payment or credit carryovers Note: Since GST’s implementation, GSTR-3 has been suspended. | Frequency of filing return is monthly and the due date is the 20th of the upcoming month. |
| GSTR-3B | Registered taxpayer files this monthly self-declaration/return with details about outward supplies, the input tax credit that is claimed, tax paid, and liability. | Frequency of filing return is monthly and the due date is the 20th of the upcoming month. |
| GSTR-4 Or CMP-08 | For registered taxpayer under the Composition Scheme who runs a small business or with an INR 75 lakh turnover. The rate for the tax paid is fixed on the nature of business and input tax credit facility is absent. Return carries the following details: • tax paid • information about the invoice-level purchase • consolidated supply value | Frequency of filing return is quarterly and the due date is 18th of the upcoming month after the quarter. |
| GSTR-5 | For NRI registered taxpayers. The return has details such as: • inward and outward supplies • the period of return, taxpayer’s name & address, GSTIN • credit or debit notes, cash ledger claim refunds, closing stock of goods. • goods and services imported and any amendments in imports for preceding tax periods | Frequency of filing return is monthly and the due date is the 20th of the upcoming month. |
| GSTR-6 | For registered Input Service Distributors. The return contains details such as: • credit or debit notes • the period of return, taxpayer’s name & address, GSTIN • input tax credit received, reverted, and distributed as IGST, CGST, and SGST • distribution of input credit and inward supplies; the latter is auto-retrieved from GSTR 1 & GSTR 5 | Frequency of filing return is monthly and the due date is the 13th of the upcoming month. |
| GSTR-7 | For registered taxpayers, who according to the GST ruling have to deduct tax at source. The return contains details such as: • the period of return, taxpayer’s name & address, GSTIN • TDS details, TDS amount, the contract information, amendments in invoice amount, TDS liability (auto-retrieved), TDS late fee and interest details for missing the TDS payment deadline • Electronic Cash Ledger refunds (auto-retrieved) | Frequency of filing return is monthly and the due date is the 10th of the upcoming month. |
| GSTR-8 | For those conducting e-commerce operations required by GSR rule to collect tax at source. Information contained under this return contains details of tax collected at source and supplies effected under Sub-section (1) of Section 43C (Model GST Law). Apart from the information above, the return encloses particulars, such as: • the period of return, taxpayer’s name & address, GSTIN • supplies made to unregistered and registered taxable individuals, including any amendments • TDS late fee and interest details for missing the TDS payment deadline; TDS liability (auto-retrieved) | Frequency of filing return is monthly and the due date is the 10th of the upcoming month. |
| GSTR-9 | For registered taxpayers with a history of income and expenditure for a particular financial year. This history will be collated based on monthly returns. Information can be modified by the taxpayer who must attach audited annual accounts. | Frequency of filing return is yearly and the due date is the 31st of the upcoming financial year. |
| GSTR-9A | For registered taxpayers under the Composition Scheme. Details contain collated quarterly returns filed for a particular financial year. | Frequency of filing return is yearly and the due date is the 31st of the upcoming financial year. |
| GSTR-10 | For a registered taxpayer who cancels GST registration. The return contains details such as: • GST registration cancellation order (date and ID) • Application Reference Number (ARN). • Closing stock details including tax payable | Frequency of filing return is the time when GST registration is cancelled/surrendered. As for the duration, it is (whichever is later) — date of cancellation order or within a period three months of the cancellation date. |
| GSTR-11 | For an individual claiming a refund of the taxes paid on inward supplies and possessing a Unique Identity Number (UIN). The return contains details such as: • UIN, government entity name, the period of return • inward purchases from a supplier registered under GST (auto-retrieved) • tax refund processed based on details above. | Frequency of filing return is monthly and the due date is 28th of the month after the month for which statement is filed. |
Late filing of GST Return: The repercussion
GST is applicable to all business owners, small or big and even those with zero returns. Missing the GST return deadline will result in penalties and additional interest. Do note that the penalties are subject to change as per the CGST Act and official notifications circulated by the Central Board of Indirect Taxes and Customs (CBIC). Here’s what a defaulter can expect for not filing GST returns on time.
- Penalties for intra-state activities
INR 100 per day as per Central Goods and Services Act, 2017 and INR 100 as per State Goods and Services Act, 2017 or Union Territory Goods and Services Act, 2017, bringing the total penalty to INR 200 per day.
Reminder: For yearly or monthly filing of GST return, the maximum penalty cannot be more than INR 5000. Also, the late fee for missing deadline for filing of — annual— GSTR-9 cannot exceed 0.25% of the annual turnover.
- Penalties for inter-state activities
Missing IGST return deadline results in a penalty, which is a sum total of penalties stipulated by CGST and SGST or UTGST Acts. In other words, the total penalty is INR 200 per day.
Reminder: For yearly or monthly filing of IGST return, the maximum penalty cannot exceed INR 10,000 for each filing. Also, the late fee for missing deadline for filing of — annual— GSTR-9 cannot exceed 0.25% of the annual turnover.
| GST ACT | For Inter-state activities | For Intra-state activities | For individuals filing Nil Returns |
|---|---|---|---|
| IGST | INR 100 per day | – | INR 20 per day |
| CGST | – | INR 50 per day | INR 10 per day |
| SGST | – | INR 50 per day | INR 10 per day |
Additional interest as a penalty
For taxes that accumulate and go unpaid, the defaulter is charged additional interest as penalty which is 18% on the outstanding tax. In the event of a taxpayer claiming reduced output tax liability in excess @24% per annum or excess Input Tax Credit (ITC), an interest has to be paid.