Returns Filed Under GST Regime

Returns Filed Under GST Regime

In this article, we will discuss the returns required to be filled by various types of taxpayers under the GST regime. GST returns expected to be filed by the taxpayers from 1st October 2020 can be referred to as New Returns.

The return to be filed depends on the turnover, nature of operations and type of registration obtained by the taxpayer.

In this article, we shall cover the following topics:

Types of Taxpayers

The return to be filed depends upon the category under which the taxpayer has obtained registration in the GST regime. The varied types of taxpayers are explained here to provide a comprehensive view on GST registration and accordingly the type of return to be filed by such person

Types-of-taxpayers

Legislative Background

The Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act” or the “Act”) mandated return filing to enable the tax authorities to obtain records of the transactions of the taxpayers. Tax authorities require details of transactions of sales, purchases, tax credits to verify the liability declared by the taxpayers and amount credited with the government treasury.

The law was formulated with the objective of obtaining all the details from the taxpayers and auto ascertaining the liability to be paid by the taxpayer and any loss of revenue was automatically passed on to the taxpayer. Basis this ideology, below legal provisions were provided in the law:-

  • Section 37 – Furnishing details of outward supplies:- Sales data of the taxpayers is made available to the tax authorities vide this legal provision and is not applicable to taxpayers opted for composition scheme, casual taxpayers, ISD, UN bodies, taxpayers requiring to deduct or collect tax at source (TDS/ TCS).
  • Section 38 – Furnishing details of inward supplies:- Purchases data of the taxpayers is made available to tax authorities vide this legal provision.
  • Section 39 – Furnishing of Returns:- This is the parent section for the current return filing system for all the taxpayers. There were rules prescribed for form, manner and due dates for filing returns for all the types of taxpayers.
  • Section 40 – First Return:- Every registered person who has made outward supplies in the period between the date on which he became liable to registration till the date on which registration has been granted shall declare the same in the first return furnished by him after the grant of registration
  • Section 41 – Claim of ITC:- Every taxpayer shall be entitled to take credit of eligible tax and shall be credited to his electronic credit ledger on a provision basis which can be used to pay any self-assessed tax.
  • Section 42 – Matching, reversal and reclaim of input tax credit

Provision:
The ideology of the government of having different returns for sales, purchases was to have an auto-check on ITC claimed by the taxpayers and the liability declared to be paid correctly. This was the system foreseen by the government to ensure no revenue leakage.

Process:
The process started with auto-population of the sales reflected by the vendors in their GSTR 1 or GSTR 6 in GSTR 2A of the taxpayer. The taxpayers were required to file GSTR 2 after taking necessary action on line items appearing in GSTR2A. The line items added would be reflected in the vendor’s GSTR 1A, which the vendor would be required to consider while filing GSTR 1 of the next month. Any invoice which was added by the taxpayer in GSTR 2 but was not accepted by the vendor in GSTR 1A will automatically be added in GSTR 2 of the taxpayer for the next month. This enabled the government to restrict ITC only to the extent of those invoices for which they have received details in GSTR 1.

Practical challenge:
Due to technical difficulties and industrial representations on the negative impact on the business because of restrictions on ITC; GSTR 2 was abolished in October 2017. Since the government was not provided with the details of purchases, the auto-matching was not possible and hence the auto-computation of liability of the taxpayer, which was foreseen, could not be achieved and thus GSTR 3 could not be implemented.

  • Section 43 – Matching, reversal and reclaim of reduction in output tax liability:- The law provided for any reduction in outward tax liability declared in any valid GST returns only after the corresponding reduction in tax credit claimed by the recipient.
  • Section 43A – Procedure for furnishing return and availing input tax credit:- This is the parent section for the New system of return filing and has an overriding effect on the above provisions of law. (Link to New returns can be provided here)

Returns Under GST

A normal taxpayer is required to file two returns on a monthly basis that is GSTR 1 and GSTR-3B along with an annual return in the form GSTR-9. A taxpayer who has opted for composition scheme is required to file only one return in each quarter in form GSTR 4 along with an annual return in the form GSTR-9A. Thus, a composition tax payer files five returns (four quarterly returns and one annual return) whereas normal taxpayer files 25 returns (12 GSTR -1, 12 GSTR-3B and 1 annual return)

The varied types of returns are explained below: –

  • GSTR-1:- 

GSTR-1 is a monthly Statement of Outward Supplies to be furnished by all normal and casual registered taxpayers making outward supplies of goods and services or both and contains details of outward supplies of goods and services.

Every registered taxable person, other than an input service distributor/ composition taxpayer/persons liable to deduct tax u/s 51 / persons liable to collect tax u/s 52 is required to file GSTR-1, the details of outward supplies of goods and/or services during a tax period, electronically on the GST Portal.

Taxpayers can opt for Quarterly filing of GSTR-1 return under the following condition:

If your turnover during the preceding financial year was up to Rs. 1.5 Crore; or if you are registered during the current financial year and expect your aggregate turnover during FY 2017-2018 to be up to Rs. 1.5 Crores

GSTR-1 needs to be filed even if there is no business activity (Nil Return) in the tax period.

Table No Contents of the table

1.4

Invoice level details of supplies to registered persons including those having UIN

1.5

Invoice level details of Inter-State supplies of invoice value greater than Rs. 2,50,000 to unregistered persons

1.6

Details of export of goods and services including deemed exports (SEZ

1.7

Summarised state level details of supplies to unregistered persons

1.8

Nil- rated, exempted, and non-GST supplies

1.9

Details of Credit/Debit Notes issued by the supplier against invoices

1.10

Details of any amendments effected to the reported information

1.11

Summary Details of Advances received in relation to future supply and their adjustment

1.12

HSN/SAC wise summary of outward supplies

1.13

Summary of documents issued
  • GSTR 2A:-

GSTR-2A is a system generated ‘draft’ Statement of Inward Supplies for a receiver taxpayer.

Any/all invoices uploaded by the supplier in their Form GSTR-1/ GSTR-5 will be visible in the Form GSTR-2A.

However, ISD details will be auto-populated to Form GSTR-2A on submission of Form GSTR-6, only.

When the counterparty has submitted/ filed their return: Invoices available in the Form GSTR-2A will continue to be available for viewing.

Detail of TDS and TCS credit receipt will be available in Form GSTR-2A (Part C) of the deductee after filing of Form GSTR-7/8 by the counterparty. The details in GSTR-2A of a tax period is available for view only.

  • GSTR 2:-

This return was withdrawn by the government due to technical difficulties and industry representations on the hardships caused to the taxpayers. 

The taxpayers were expected to take action (accept/reject/modify / hold) on the line items reflected in GSTR 2A and accordingly GSTR 2 would be filed by the taxpayers. There was an option to add the invoices which were not appearing in GSTR2A but the taxpayer was in a position of a valid document entitling input tax credit (ITC) while filing GSTR 2. 

The line items modified or added would be reflected in vendors GSTR 1A which the vendor would be required to consider while filing GSTR 1 of the next month. 

Any invoice which was added by the taxpayer in GSTR 2 but was not accepted by the vendor in GSTR 1A will automatically be added in GSTR 2 of the taxpayer for the next month. 

This enabled the government to restrict ITC only to the extent of those invoices for which they have received details in GSTR 1.

  • GSTR 3:-

This return was based on the GSTR 1 and GSTR 2 returns filed by the taxpayers. In GSTR 3, the system would auto compute the net liability to be paid by the taxpayer basis the outward liability declared in GSTR 1 and eligible ITC declared in GSTR 2. Since GSTR 2 was withdrawn, GSTR 3 could not be implemented. 

  • GSTR 3B:-

Prior to Notification 49 dated 9th October 2019, GSTR 3B was a form and all normal taxpayers and casual taxpayers were required to file Form GSTR-3B every time there is an extension of due dates of filing for Form GSTR-1 and Form GSTR-2. 

Post Notification 49, GSTR 3B was recognized as a valid tax return. 

GSTR-3B is a simplified summary return and the purpose of the return is for taxpayers to declare their summary GST liabilities for a particular tax period and discharge these liabilities

  • CMP-08 / GSTR 4:-

GSTR-4 / CMP 08 is to be filed by taxpayers who have opted to pay tax under the composition scheme. The taxpayer is mainly required to provide a summary of outward supplies, tax payable thereon, etc. Such taxpayers are also required to report summary of import of services and supplies attracting reverse charge

  • GSTR 5:-

GSTR-5 is a return to be filed by all Non- Resident Taxpayers in case they don’t wish to avail ITC (Input Tax Credit) on local procurements. In case, a non-resident person wishes to avail ITC on local procurement, it will be required to register as a normal taxpayer and file Form GSTR-1/ 3B as a normal/casual taxpayer.

  • GSTR 6:-

GSTR-6 is a monthly return to be filed by all the Input Service Distributors (ISD) for distribution of credit (ITC) amongst its units

  • GSTR 7:-

GSTR-7 is a return that is required to be filed by the persons who deduct tax at the time of making/crediting a payment to suppliers towards the inward supplies received. The tax deductor has a legal obligation to declare his TDS liability for a given period (monthly) in Form GSTR-7. 

As per section 51 of the CGST Act, following persons/entities/establishments are required to deduct TDS:- 

  1. A department or establishment of the Central Government or State Government;
  2. Local authority;
  3. Governmental agencies; and
  4. Such persons or category of persons as may be notified by the Government on the recommendations of the Council.
  • GSTR 8:-

GSTR-8 is a Statement of TCS (Tax Collected at Source) to be filed by E-Commerce Operators. Form GSTR-8 contains the details of taxable supplies and the amount of consideration collected by such operators pertaining to the supplies made by other suppliers through such e-commerce operators and the amount of TCS collected on such supplies.

GSTR-9 is an annual return to be filed once, for each financial year, by the registered taxpayers who were regular taxpayers, including SEZ units and SEZ developers. The taxpayers are required to furnish details of purchases, sales, input tax credit or refund claimed, or demand created, etc. in this return. 

In the Annual Return for F.Y 2017-18, the details pertaining to the period from July 2017 to March 2018 are to be reported. In case, the taxpayer is registered after 1st July 2017, in such case, details for the period from the effective date of registration till 31st March 2018 is to be provided in Annual Return. It is mandatory to file Form GSTR-9 for normal taxpayers.

  • GSTR 9A:-

GSTR-9A is an annual return to be filed once, for each financial year, by taxpayers who have opted for composition scheme, for any period during the said financial year. The taxpayers are required to furnish details regarding outward supplies, inward supplies, taxes paid, any refund claimed or demand created or input tax credit availed or reversed due to opting out or opting into composition scheme.

  • GSTR 9C:-

GSTR-9C is a reconciliation statement, duly verified and signed by Chartered Accountant/ Cost Accountant and this form is required to be furnished along with the filing of annual return in Form GSTR-9 by the taxpayer whose aggregate turnover is above two Crore rupees during a financial year.

GSTR 9C cannot be filed until GSTR 9 is filed by the taxpayer

  • GSTR 10:-

A taxable person whose GST registration is canceled or surrendered has to file a return in Form GSTR-10 called Final Return. This is a statement of stocks held by such taxpayer on the day immediately preceding the date from which cancellation is made effective. This return should be filed within three months of the date of cancellation or date of order of cancellation, whichever is later.

This return is intended to provide details of ITC involved in closing stock (including inputs and capital goods) to be reversed/ paid by the taxpayer.

  • GSTR 11:-

GSTR-11 is to be filed by persons who have been assigned a Unique Identity Number (UIN). It is a statement of inward supply of goods or services or both received by a UIN holder.

Due Dates of Returns

The above mentioned return have to be filed basis the due dates prescribed by the government or as maybe extended vide notifications released by the government. The due dates are as under: –

GST Return Due Date

GSTR 1

With effect from Oct 2018 – 11th of the following month Before Oct 2018 – 10th of the following month

GSTR 3B

20th of the following month

GSTR 4/ CMP-08

18th of the following quarter

GSTR 5

20th of the following month

GSTR 6

13th of the following month

GSTR 7

10th of the following month

GSTR 8

10th of the following month

GSTR 9

31st December of the following financial year For FY 2017-18 – 31st Jan 2020 For FY 2018-19 – 31st March 2020

GSTR 9A

31st December of the following financial year For FY 2017-18 – 31st Jan 2020 For FY 2018-19 – 31st March 2020

GSTR 9C

31st December of the following financial year For FY 2017-18 – 31st Jan 2020 For FY 2018-19 – 31st March 2020

GSTR 10

Within three months of the date of cancellation or date of cancellation order, whichever is later.

GSTR 11

28th of the month following the month for which statement claiming refund is filed

As per Section 47 of the CGST Act, any taxpayer who is required to file returns other than final return and fails to file such returns within the due date, shall be liable to pay a late fee in the following manner:

  • One hundred rupees for each day during which such failure continues subject to a maximum amount of five thousand rupees. A similar provision is provided under the SGST Act as well.
  • Hence a taxpayer would be liable to pay a late fee of two hundred rupees for each day during which such failure continues subject to a maximum amount of ten thousand rupees, in total.
  • In case the taxpayer was required to file final return (i.e. GSTR-10) and fails to file within the due date then he shall be liable to pay a late fee of two hundred rupees for each day during which such failure continues subject to a maximum of an amount calculated at five per cent of his turnover in the State or Union territory.
The government has extended the due dates for various returns as mentioned above due to hardships caused to the taxpayers and technical glitches on the GSTN portal. Key notifications issued in the recent past are as under: –
Notification No.

Date of Issue

Subject

07/2020-Central Tax

3-2-2020

A taxpayer with an aggregated turnover up to five crores
  • Principal Place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman, and Nicobar Islands and Lakshadweep then due dates for GSTR 3B for the month of Feb, Mar and April 2020 shall be 22nd of Feb, March and April 2020 respectively
  • Principal Place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh, and Delhi then due dates for GSTR 3B for the month of Feb, Mar and April 2020 shall be 24nd of Feb, March and April 2020 respectively
A taxpayer with aggregate turnover more than five crores shall continue to be 20th of the following month

06/2020-Central Tax

3-2-2020

  • Principal Place of business is in Chandigarh, Delhi, Gujarat, Haryana, Jammu and Kashmir, Ladakh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand
  • Then the due date for the annual return for FY 2017-18 is 5th Feb 2020
  • Principal Place of business is in Andaman and Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Dadra, and Nagar Haveli and Daman and Diu, Goa, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Telangana, Tripura, West Bengal, Other Territory
  • Then the due date for the annual return for FY 2017-18 is 7th Feb 2020.

04/2020-Central Tax

10-1-2020

One time amnesty scheme for filing GSTR 1 without any late fees for the period July 2017 till November 2019 was extended till 17th Jan 2020.

78/2019-Central Tax

26-12-19

Extended due date of GSTR 7 for November 2019 for taxpayers having principal place of business in the State of Assam, Manipur or Tripura to 25th Dec 2019.

56/2019-Central Tax

14-11-19

Simplification of GSTR 9 and 9C for FY 2017-18 and FY 2018-19.

50/2019-Central Tax

24-10-19

Extended due date of GST CMP 08 for September 2019 quarter to 22nd Oct 2019.

47/2019-Central Tax

09-10-19

Annual return for FY 2017-18 and FY 2018-19 for taxpayers with aggregate turnover less than two crores made optionally.

38/2019-Central Tax

31-08-19

Filling of Form ITC-04 waived of for FY 2017-18 and FY 2018-19.

Facts of the case: –

  • M/s. AAP & Co., Chartered Accountants petitioned the Union of India through Ministry of finance seeking to quash press release dated 18.10.2018
  • Press release dated 18.10.2018 in reference with Section 16(4) of the CGST Act clarified that the last date for availing input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of return in form GSTR-3B for the month of September 2018
  • The petitioners questioned the legality of equating Form GSTR 3 with Form GSTR 3B to infer the last date of availing ITC

Provisions referred and arguments laid before the honorable court: –

  • Section 16(4) of the CGST act mandated the last date of availing ITC as the due date of furnishing return under section 39 for the month of September following the end of the financial year or furnishing of annual return, whichever is earlier.
  • Section 39 provided returns should be filed in such form and manner as may be prescribed.
    The forms and manner of submission of returns are provided in Rule 61 of the CGST Rules.
  • The petitioner stated that the Sub-rule (1) of Rule 61 provides that every registered person shall furnish a return specified under subsection (1) of section 39 in FORM GSTR-3 electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.
  • The petitioner stated that Sub-rule (5) of Rule 61 provides that where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the return shall be furnished in FORM GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner
  • The petitioner additionally referred to Notification No 10-2017 Central Tax dated 28th June 2017 wherein it was provided in terms of Sub-rule (5) of Rule 61 of the CGST Rules that where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, return in FORM GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such manner and subject to such conditions as may be notified by the Commissioner which was retrospectively amended vide Notification No 17/2017- Central Tax dated 27th July 2017, to omit the wordings return in FORM GSTR-3B being in lieu of FORM GSTR-3.
  • The writ was allowed and a Notice in the favor of the petitioners was issued on 28th August 2019

Retrospective Amendment in Sub Rule (5) of Rule 61 of CGST Rules

The government vides Notification No 49/2019 – Central Tax – dated 9th October 2019, amended Rule 61(5) with retrospective effect from 1st July 2017 to negate the implication of the judgment of Gujarat High court as discussed above.

The notification provided that where a return in FORM GSTR-3B is required to be furnished by a person referred to in sub-rule (1) then such person shall not be required to furnish the return in FORM GSTR-3. This notification recognized Form GSTR 3B with a retrospective effect.

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