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What is GST Compliance?

  • The Goods and Services Tax (GST) is a single and destination based tax levied on goods & services consumed in an economy. GST as envisaged by the Central Government is a single uniform indirect tax which will treat India as one nation one market. With start of its inception from 1st July 2017, compliance with GST Law has always been challenging issue for business organizations.
  • GST requires greater integration of tax domain knowledge, expertise and technology, as compliance has become vast, paperless and data-intensive, with sector-specific nuances. The digitalization has also created a new paradigm in tax administration and compliances.
  • The GST Council has laid down rules for the way we have to maintain records, how we have to raise invoices and how we have to report our purchases and sales, and ultimately, the way we have to pay our taxes and file returns. In simple terms, adherence to these rules and regulations is what constitutes GST compliance. Not being compliant, can be a heavy cost for a business. The legislation also imposes higher corrective implications in case of errors resulting in short payment of taxes or incorrect availment of credit.
  • Given the above, businesses today require not only a robust tax technology solution for processing their GST returns but also a strong and proficient partner who can help them in complying with requirements of GST Law & rules in hassle- free, accurate, complete and timely manner. Team Finaccle with its smart solution oriented approach acutely realizes the changing landscape and has the ability to deal with requirements of Return Filing, GSTR-2A Matching, TDS/TCS compliances, GST refund issues and other matters related to GST compliances.

  • Key aspects of compliances in the GST regime

    1. Monthly Filing of Returns
    Under GST compliance, first and foremost compliance is accurate and timely filing of GST Returns as applicable to taxpayer. There are various returns prescribed under GST law which are as follows:
    Return To be furnished by whom Due date*
    GSTR-1 To be filed by all the normal taxpayers stating their outward supplies of goods and services during the applicable tax period. 1. Turnover < Rs. 1.5 crore Quarterly, 31st of the month succeeding the quarter 2. Turnover > Rs. 1.5 crore Monthly, 11th of the succeeding month
    GSTR-2 Suspended Details of inward supplies of goods and services including those under reverse charge basis Monthly, 15th of the succeeding month
    GSTR-3 Suspended All details of the outward and inward supplies, as mentioned in Forms GSTR-1 & GSTR-2 Monthly, 20th of the succeeding month
    GSTR-3B To be filed by all the normal taxpayers declaring their summary GST liabilities for the applicable tax period Monthly, 20th of the succeeding month
    CMP-08 (Earlier GSTR-4, for composition-scheme taxpayers only) To declare summary of outward supplies and import of services liable to reverse charge mechanism Quarterly, 18th of the month succeeding the quarter
    GSTR-5 (for non-resident taxpayers) To be filed by non-resident taxpayers when they do not wish to claim Input Tax Credit (ITC) Monthly, 20th of the succeeding month
    GSTR-5 (for non-resident taxpayers) To be filed by non-resident taxpayers when they do not wish to claim Input Tax Credit (ITC) Monthly, 20th of the succeeding month
    GSTR-5A To be filed by Online Information and Database Access or Retrieval (OIDAR) service providers outside India for their services to unregistered persons in India Monthly, 20th of the succeeding month
    GSTR-6 (for non-resident taxpayers) To be filed by Input Service Distributors for distribution of ITC Monthly, 13th of the succeeding
    GSTR-7 To declare TDS liability by the authorities deducting tax at source Monthly, 10th of the succeeding month
    GSTR-6 (for non-resident taxpayers) To be filed by Input Service Distributors for distribution of ITC Monthly, 13th of the succeeding
    GSTR-8 To declare Tax Collected at Source (TCS) by e-commerce operators Monthly, 10th of the succeeding month
    GSTR-9A To be filed by GST composition scheme taxpayers declaring the details of outward supply, inward supply, taxes paid, refund claimed, demand created, input tax credit and reverse due to opting out or opting in to the composition scheme. Annually, 31ST December of next year
    GSTR-10 (Final Return) To be filed by the taxpayers, whose GST registration has been canceled or surrendered to file final GST returns. Once, 3 months from the date of cancellation or order of cancellation, whichever is later
    GSTR-11 To be filed by Unique Identity Number (UIN) holders stating the supplied/received goods and services. To claim GST refund through RFD-10 Quarterly, not mandatory for UIN holders who did not receive any inward supplies during the quarter. 28th of the next month for which refund statement is filed
    Late filing of GST returns attracts late fees, interest and other repercussions.
    2. Timely and correct Availment of ITC
    The second most important compliance is to availing Input Tax credit on timely basis. A businessman is not aware of GST regulations. The followings are covered under Input Tax Credit compliances under GST:
  • To check whether ITC is eligible or not. There is concept of blocked ITC under GST also where credit of GST shall not be available to taxpayer.
  • To check whether ITC of invoice is availed within the time limit specified under GST.As per section 16(4) of CGST Act, credit of invoice of particular month can be availed only till due date of furnishing GSTR-3B for September of next financial year or date of filing of annual return, whichever is earlier.
  • To check compliance with rule 36(4) i.e. 10% rule.
  • To check the manner of utilization of ITC
  • To match ITC claimed in GSTR-3B with GSTR-2A
  • 3. Accounts and Records to be maintained
    Section 35 of CGST Act envisages the accounts and documents to be maintained by taxpayer in respect of
  • Production or manufacture of goods;
  • Inward and outward supply of goods or services or both;
  • Stock of goods;
  • Input tax credit availed;
  • Output tax payable and paid; and
  • Such other particulars as may be prescribed
  • Failure to maintain such records and account may lead to penal action against taxpayer.
    Credits available, based on matching of purchase data with sales data filed by vendors in the GSTN portal.
    4. Claiming GST Refunds in due time
    Timely refund mechanism is essential in tax administration, as it facilitates trade through release of blocked funds for working capital, expansion and modernization of existing business.
    In GST, refund of taxes is allowed in certain circumstances which are as follows:
  • Export of Goods or services
  • Supplies to SEZs units and developers
  • Refund of accumulated Input Tax Credit on account of inverted duty structure i.e. Tax paid on input is higher than tax liability on output
  • Excess payment of tax by mistake
  • Tax paid on advances received but later on goods or services were not supplied
  • Refund of CGST & SGST paid by treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa.
  • Deemed Export supplies
  • Refund of taxes on purchase made by UN or embassies etc.
  • Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court
  • Finalization of provisional assessment
  • Refund of pre-deposit
  • Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India
  • 5. GST Annual Return and GST Audit
    GST Annual Return
  • The GST Annual return i.e. GSTR 9 is a return to be filed by the every taxpayer once a year which is summary of all monthly/quarterly returns (GSTR 1, GSTR 2A, GSTR-3B) filed for that year. It consists of details regarding the outward and inward supplies made/received during the relevant year, ITC availed and utilised, Refund claimed under different tax heads i.e. CGST, SGST & IGST.
  • GST Audit
  • GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.
  • Audit under GST involves examination of records, returns and other documents maintained by a registered person. It ensures correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and compliance with provisions of law. This audit has to be conducted either by CA or CMA.
  • 6. To find correct HSN Code / SAC.
    7. To evaluate tax positions and provide pragmatic business advice.
    8. To submit proper reply to notices issued by department.
    9. To aware taxpayer with latest GST updates.