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Corporate and Individual Taxation

Everything GST - Its Registration, Filing Returns & Others

Goods and Services Tax or GST is a uniform tax regime brought into play by the central legislature to facilitate the evolution of our nation to a Common Marketplace. Although, debates on the implementation of the regime and how it affects the consumer are still continuing, it is imperative to learn the procedures and forms involved.
Written by:
Antim Amlan
Published on

GST is a comprehensive indirect tax regime which replaced the previous indirect tax regimes. This was passed in March 2017 and it came into effect from July 2017. GST is a multi-stage tax system where tax is collected at every stage and the credit of tax paid, or input tax credit, can be availed in the succeeding stages of value addition as set off. This destination based tax system, which replaced the erstwhile origin-based taxation system, makes way for the elimination of the cascading effect of taxes. There are four major tax rate classifications: 5%, 12%, 18% and 28%. Additional tax is levied on precious metals. Higher tax rates are levied on specified luxury goods, sin goods, etc.

There are three kinds of GST:

  1. Central Goods and Services Tax (CGST)  

  2. State Goods and Services Tax (SGST)

  3. Integrated Goods and Services Tax (IGST)

The CGST and SGST are levied on intra-state trade and the IGST is levied on inter-state trade. The GST Council is a dedicated council to make decisions on issues arising on GST and the GSTN or the GST Network is the website which constitutes the information technology backbone for GST in India.

Table of Contents:

  1. Contrast to Previous Regime

  2. Migration Process

  3. Composite Scheme

  4. Amendment of Registration

  5. Cancellation or Surrender of Registration

  6. E-Commerce Operator

  7. GST Return Forms

  8. A Simplified Return Filing System: A Prototype

Consult: Top Corporate and Individual Taxation Lawyers

Contrast to Previous Regime

The previous regime was an origin based regime in contrast to the current regime. Most important difference is separate laws and separate levy of which rates could differ from state to state had, in fact, been a huge setback to ease of doing business; the different laws did make tax compliance a huge bottleneck. The cascading effect of taxes and the consequent burden on the consumer were other flaws in the system. The GST aims at bringing a much more transparent and taxpayer friendly regime which would facilitate convenience and better compliance.


Migration Process

This migration process is applicable for taxpayers registered under the VAT, excise or service tax regimes with a Personal Account Number or PAN. This had to be done before 31st December 2017; but the same has been relaxed only for some taxpayers who could not complete their registration process. The aggregate turnover threshold which mandates the respective person’s registration under the GST regime, is 20 Lakh INR in case of service providers and 40 Lakh INR in case of goods suppliers; this turnover threshold is 10 Lakh INR as regards Jammu & Kashmir, North Eastern States, Himachal Pradesh and Uttarakhand.

The first step in the process of migration is enrolment by validation of email id and mobile number of the supplier. Once enrolled, the taxpayer gets a provisional registration certificate in FORM GST REG-25 which bears the GST Identification Number or GSTIN. One taxpayer could possibly have more than one registration under the previous regime. This would come down to one single registration in the state he is registered under service tax. This is the procedure for provisional registration of GST.

Before the final GST registration certificate is issued, a provisional registration is issued to run the businesses for the time being; later, the final registration will be issued.

The final registration is to be applied for - electronically via FORM GST REG–26, if the person is liable to be registered under this Act. If the information given here is correct and complete, the final registration will be given in  FORM GST REG–06. If the information is not correct and complete, a ‘Show Cause’ notice will be issued and a reasonable opportunity to be heard will be given to the applicant following which, if the applicant’s explanation is not sufficient, the provisional registration will be cancelled. On the contrary, if the applicant’s explanation is sufficient, the above-mentioned show cause notice might be withdrawn.

Composite Scheme

This is an optional and voluntary scheme brought into play to benefit small businesses with a turnover of less than One Crore INR or 75 Lakh INR. A specified states can opt for this scheme but on any given day, if the turnover crosses the above-mentioned limit, the taxpayer becomes ineligible and have to take registration under the regular scheme; this scheme has benefits such as lower compliance, reduced tax and high liquidity. Nonetheless, the scheme is said to be rather ineffective in benefitting larger businesses.

Procedure for registration under Composite Scheme:

If the person is already registered under the earlier tax regime and has been granted registration on the provisional basis under GST, he/she can opt to pay under composition scheme by filing form GST CMP-01. He/she is also required to file form GST CMP-03 within 60days of an exercise of the option which should contain required details like GST Audit as to stocks, supplies, etc. Here, the person will not be eligible for Input Tax Credit. A person can convert themselves back to the regular scheme whereby one can avail the Input Tax Credit.

Amendment of Registration

Taxpayers registered under GST, if they are eligible, can file amendments which they would want to implement on the registration certificate; the eligible taxpayers are: new registrants & normal taxpayers, TDS/TCS registrants, UN bodies, embassies & other, notified person having UIN, non-resident taxable person, GST practitioner or an online details and database access or retrieval service provider. Post registration under GST, if any amendments are to be made to the information furnished to the GST common portal, the taxpayer can apply via this scheme. The said person will have to file an application for amendment. As regards changes to GST registration application or changes to GST registration information, the GST amendment application form GST REG-14, duly signed digitally by the applicant, should be filed within 15 days of change of information.

Cancellation or Surrender of Registration

Cancellation or surrender comes into play in the following scenarios. First, if a registered person intends to surrender the registration, it can be done, if the turnover is less than the earlier mentioned threshold. In case of the death of the proprietor, if the business has been discontinued or if the business is no longer liable to GST. The second scenario is direct cancellation by the GST officer if - the organization violates any law of GST, a composition registered person does not file for a tax for three consecutive years, the registration was obtained fraudulently, the business is not making any profits from the last six months succeeding the registration, or for any other valid reason. A legal heir can surrender the GST post death of the proprietor in case of a sole proprietorship.

The cancellation could be done via the GST Portal. Nonetheless, if the taxpayer has issued any tax invoice then form GST REG – 16 needs to be filed. Cancellation of CGST will automatically result in the cancellation of SGST as well. It is also pertinent to note that the CBIC has issued circular nos. 69-72, all dated 26 October, 2018, clarifying various issues relating to cancellation of registration, refund, casual taxable person, ISD and also explaining procedure for return of expired medicines.

E-Commerce Operator

Electronic Commerce has been defined in Sec. 2(44) of the CGST Act, 2017 to mean the supply of goods or services or both, including digital products over digital or electronic network; an E-Commerce Operator is anyone who owns, operates or manages digital or electronic facility or platform for electronic commerce. In simple words, these would be operators such as Flipkart, Amazon or Myntra, i.e., the brands or businesses who sell goods and services online.

It is mandatory for an E-Commerce operator to register under the GST act. Earlier mentioned threshold exception cannot be availed by an E-Commerce operator and these operators have to pay tax on the notified services. The said tax is collected by means of TCS or Tax Collected at Source. Also, as the E-Commerce platforms usually have return policies where customers return their product; in this case, the tax is calculated only on the net sales carried out by the operator.

The e-commerce operator should make the collection during the month in which the consideration amount is collected from the recipient. The said tax collected each month, is to be paid within 10 days post month end.

Every operator is required to furnish a statement, electronically, containing the details of outward supplies of goods or services effected through it, including the supplies of goods or services returned through it, and the amount collected by it as TCS during a month, within ten days after the end of such month. In addition to this, the tax department, through its officials, has the right to ask the operators to furnish information regarding supply or stock; they can issue a notice which has to be replied to within 15 days.

Further Read: E-Way Bill in GST

GST Return Forms

All registered taxpayers are supposed to share their relevant business information including tax collected, tax paid and the corresponding sales and purchases to the Goods and Services Tax portal; this has to be done vide filing of GST returns. A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. The government has formulated a list of forms for filing of returns for ensuring convenience and for facilitating categorised and organised filing of returns.

Here is a table of the different forms for the payment of GST.

These GST return filing forms are to be filed by the due date; the due dates may vary depending on which form is to be filed. In the GST regime, any regular business has to file two monthly returns and one annual return. This amounts to 26 returns in a year.

Filing a GST returns on time is very crucial because a late fee & interest is imposed, if the person or business fails to do so. The said interest will be 18% per annum, calculated on the outstanding amount of tax to be paid. The late fee is 100 INR per day per Act, thereby amounting to 200 INR per day including SGST and CGST.

This process of GST return filing can be done online via the GST Portal. All you need to do is go to the website, login and click on the returns bar from the services drop-down list. Fill in the required details, select the relevant form and file your returns.

When a taxpayer’s aggregate turnover exceeds 1 Crore (75 Lakh for special category states), he/she can in no way be a composition dealer and hence the laws and allied forms of GST returns applicable to regular dealers would apply to him/her. The final return is to be filed by taxpayers who surrendered or got cancelled the GST Registration in the Form GSTR 10.

As regards UN Bodies, the GST Act provides for a refund scheme which would be facilitated by issuing them a Unique Identification Number or UIN. These bodies are supposed to file invoice level data in their return form GSTR-11 on the common portal. A department or establishment of the Central Government or State Government, local authority, governmental agencies or other persons notified could come under the definition of tax deductors and their respective return form is GSTR 7 as given above.

A Simplified Return Filing System: A Prototype

On May 22nd, 2019, the GST Network, the Technology backbone of the system, had released a prototype for a much more simplified return filing system. The new prototype is open for feedback from stakeholders, as an offline tool. This would give the users a hands-on experience on the proposed prototype. There are three forms for a normal taxpayer: Normal, Sahaj and Sugam. This also allows users to use functionality such as drop down menus, invoice upload, upload of purchase register etc. The implementation of this prototype is expected to usher in a higher order of convenience to GST Returns Filing.

Written by: Jesse Jacob V

National University of Advanced Legal Studies, Kochi (3rd Year)