A GST return is a document that shows the detailed sales of a registered dealer. It is required to be submitted to the tax administrative authorities. The return helps them to calculate the tax needed to be paid by the individual or business entities.
2 Ways of GST Return Filing:
- Monthly GST filing is ideal for those business owners who deal with a broader base of customers. It helps to reduce the risk of showing negative working capital.
- Quarterly GST filing is recommended for entities dealing with less number of transactions or customers.
How Does GST Return Filing Benefits Businesses and Individuals?
GST return filing process is based on filling only one single form for recording numerous types of transactions. It has made possible the collection of taxes like IGST, CGST, and SGST through one single form. It saves time as well as effort.
There are many other benefits of GST for individuals as well as businesses.
1. Removal of Cascading Effect
Before the introduction of GST return filing, we had to pay several taxes like service tax, state-level value-added tax, entertainment tax, and many others.
GST has finally succeeded in removing such cascading effect i.e earlier sales tax got imposed throughout the supply chain operations and so needed to pay an unnecessarily higher tax.
2. Ideal For Online Business
In this competitive world, every transaction has become online. Everyone has started spreading the business through various online platforms. Earlier, Vat rules and regulations used to be hectic work for the business owners. They had to comply with several laws and regulations. It even used to be a lengthy and time-consuming process.
But under GST regulations, filing of only one return has made it sufficient for various online business transactions.
3. Higher Threshold Limit
In the GST regime, You have got the threshold limit of INR 20 lakhs for GST registration. However, the limit does not apply to the GST return. You can avoid registration if the turnover is below 20 lakh. But if your turnover is below 20 lakh and you are taking voluntary registration, then you have to file returns even if there are no sales.
4. Rating of Taxpayers
Through the process of monthly GST filing, the performance of various individuals or business entities can be easily monitored regarding the timely payment of taxes. This process has finally enabled tax authorities to rate every eligible taxpayer based on their compliance with various rules and regulations.
This system has encouraged a lot of people because their compliance ratings are presented publicly, and every taxpayer has ranked accordingly.
5. Startup Friendly
While paying Vat, Startups used to suffer a lot in complying with the rules and regulations of Vat. As soon as any startup reached an annual turnover of 5 lakhs, they needed to pay Vat that seemed quite impossible for them during the baby stage.
Yet, under GST return filing, startups can set off the service tax with their sales.
Thus, monthly GST filing is an excellent invention under Indian tax law to ensure proper reporting, transparency, and enhanced efficiency of both government and taxpayers. These benefits have also succeeded in increasing the number of people encouraged in paying tax. Filing GST return has broadly reduced the chances of tax fraud as well.
MyTaxAdvisor is a legal service providing platform that makes the filing of GST returns even easier for you by automation and technologies.