gst_compliance

Overview - GST compliance

The Goods and Services Tax (GST) is a unified and destination-based tax imposed on goods and services consumed within an economy. Envisioned by the Central Government, GST is designed as a single, uniform indirect tax system aimed at treating India as a unified market. Implemented since July 1, 2017, complying with GST laws has consistently presented a challenging task for businesses. GST compliance necessitates a high level of integration of tax domain knowledge, expertise, and technology, as the compliance process has evolved to be extensive, paperless, and data-intensive, featuring sector-specific intricacies. The advent of digitalization has ushered in a new era in tax administration and compliance.

The GST Council has established rules governing record-keeping, invoicing procedures, and reporting requirements for purchases and sales. Ultimately, it outlines the procedures for tax payments and return filing. In simple terms, adherence to these rules and regulations constitutes GST compliance. Non-compliance can result in significant costs for businesses. The legislation also imposes stringent consequences in case of errors leading to underpayment of taxes or incorrect utilization of credit.

What is GST Compliance?

Goods and Services Tax (GST) compliance refers to the adherence of businesses and taxpayers to the rules, regulations, and procedures set forth by the GST laws. It involves fulfilling the statutory obligations imposed by the GST regime to ensure accurate reporting, tax payments, and overall compliance with the tax framework.

These compliance rules can be clubbed into three categories:

Registration compliance
Tax Invoice compliance
Return filing compliance

Gst return compliance

All registered businesses are obligated to submit returns on a monthly, quarterly, or yearly basis, depending on the nature of their business activities. The filing frequency is determined by the type of business. GST returns must be filed online through the Returns section of the GST website. The following forms are essential for filing GST Returns.

GSTR-1 is a return where details of sales are filed with the government. No tax has to be paid after filing this return.
GSTR-3B is a simplified return to declare summary GST liabilities for a tax period. It needs to be self-declared monthly 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, and 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.