GST (GOODS AND SERVICES TAX)

It is a common GST scheme opted by the dealers in the supply network of interstate and intrastate.   

Registration in this scheme is mandatory for a dealer who wants to start a business network in distribution, supply, Export, Import or any form of business where an invoice needed to be issued. 

A composition scheme dealer to be converted to a Regular scheme by law on crossing aggregate turnover of 1.5cr. ( 75 lakh North East). 

A dealer registered under GST Regular scheme is allowed to 

• Issue of sales invoice with the collection of GST.
• Supply of goods and services to intrastate and interstate
• Pays GST after adjustment of ITC (INPUT TAX CREDIT)

There are numerous compliances under GST regular schemes to comply with a process of filings discussed below. 

• GSTR3B: It is a consolidated statement of monthly sales to be filed every month before the 20th of the following month on self-declaration with tax (GST) payment after adjustment of ITC. A matching GSTR1 with GSTR3B, also to be filed to complete the monthly/quarterly compliance. 

• GSTR1: It summarises the sales statement that reports the sales in GST (%) rate wise. It also enables a registered buyer to avail ITC if purchased from a registered dealer provided a corresponding GSTR1 filed by the seller. Dealer can opt for filing GSTR1 quarterly. The filing date is the 18th of the following month; if the filing mode is quarterly, the filing date is the 18th of the next month after the quarter-end.

• GSTR9: Annual returns, which is also a summary of filed GSTR3B and GSTR1. 

• GSTR9C: Taxpayers having turnover beyond two crores in a Financial year shall get audited their accounts and submitted in the form of GSTR9C Reconciliation. 

It is a scheme that simplifies compliance for small taxpayers with an aggregated turnover up to Rs. 5 crores at PAN  level, opting for quarterly GSTR-1 and GSTR-3B filing. The payment of tax (GST) to be made monthly based on self-assessment, Filed GSTR3B of past returns by a simple challan in FORM GST PMT-06.

• IFF (INVOICE FURNISHING FACILITY): This is provided for those quarterly taxpayers who want to pass on input tax credit  (ITC) to the buyers in the first two months of a quarter. Since IFF is an optional facility, it poses no additional compliance burden. The due date for IFF is the 13th of next month and cannot be filed after this date. 

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A taxpayer registered under a composition scheme has to pay an amount equal to a certain fixed percentage of the annual turnover as tax. This tax has to be paid quarterly. However, such a taxpayer does not have to maintain detailed accounts and records instead of two monthly statements and a return.   

Aggregate turnover will be computed based on turnover on an all India basis and will include the value of all taxable supplies, exempt supplies and exports made by all persons with the same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess. 

The option to pay tax under composition levy would remain valid so long as conditions mentioned in section 10 of the CGST Act, 2017 and Rule 3 to 5 of the CGST Rules, 2017 remain satisfied. 

A dealer is required to pay tax in a quarterly statement CMP-08 by the 18th of the month after the end of the quarter. Also, a return in form GSTR-4 has to be filed annually by 30th April of the next financial year from FY 2019-20 onwards. GSTR-9A is an annual return to be filed by 31st December of the next financial year. 

This scheme needs to be converted to a regular scheme on crossing a specific limit of turnover of 1.5 cr. (75 lakh for North Eastern states). A dealer registered under a regular scheme also can convert into composition schemes if turnover falls below 1.5 cr. (75 lakh North East) 

 The following are the advantages of registering under the composition scheme:

• Lesser compliance (returns, maintaining books of record, issuance of invoices)
• Limited tax liability
• High liquidity as taxes are at a lower rate

There is no threshold limit for registration. Casual Taxable persons making the supply of specified handicraft goods need to register only if their aggregate turnover crosses Rs. 20 Lakh (Rs. 10 lakh for North East) 

The applicant has to apply for registration at least five days before commencing his business in India.  

A casual taxable person has to make an advance deposit of tax in an amount equivalent to his estimated tax liability for the period for which the registration is sought. 

The casual taxable person required to furnish his returns prescribed return formates such as GSTR-1, GSTR-2, GSTR-3, GSTR-3B 

It may be mentioned that presently only FORM GSTR-1 and FORM GSTR-3B is required to be filed. 

However, a casual tax person shall not be required to file an annual return as required by a normally registered taxpayer.  

The government has notified that the registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year shall furnish the details of the outward supply of goods or services component in the formate prescribed department.  

The casual taxable person is eligible for a refund if any balance of the advance tax deposited by him after adjusting his tax liability. The balance advance tax deposit can be refunded only after all the returns have been furnished, in respect of the entire period for which the certificate of registration was granted to him had remained in force.