Compliances after GST Registration
The Indian Goods and Services Tax (GST) Act, which came into effect from 1st July 2017, has some significant provisions in relation to tax compliances, including high and rigorous penalties for delayed compliances and non-compliances. Along with prescribing tax related compliances only through electronic means, the GST law of India has also introduced the GST Compliance Rating Score, to boost punctual and better compliances. This webpage offers very informative and useful information about compliances after gst registration in India, including an overview of the compliance rating initiative of the government.
Tax Compliances are nothing but all those activities which comply strictly and properly with various rules and regulations of the tax laws. Under the Dual system GST law of India, different categories of taxpayers are required to make different types of compliances electronically with tax administrative authorities. A normal taxpayer [other than a Composition Taxpayer, an Input Service Distributor (ISD), Non-Resident Foreign Taxpayer, or a person/entity liable to deduct or collect tax (TDS/TCS), Casual Taxpayer, etc.], is now required to file online Three Returns monthly and One Annual Return. For other taxable persons or entities mentioned here, there are separate returns stipulated below. In general, for the normal taxpayers, the following are three main compliances under GST regime:
- Invoices: --- Now, each and every invoice shall be uploaded on the GSTN Portal, for generating proper reference number, well before supply of the goods/services.
- Three Returns in Every Month: --- These returns (GSTR-1, GSTR-2, and GSTR-3) are to be filed online based on the invoices uploaded on the GSTN (these returns are elucidated below).
- One Yearly Return: --- This yearly return is to be filed through Form GSTR-9.
- GSTR-1: ---- 10th of the next month; Details of outward supplies which includes details on invoices, debit notes, credit notes and revised invoices, advance receipts issued in relation to outward supplies during the tax period & amended details of earlier tax period if any
- GSTR -2: --- 15th of the next month; Details of inward supplies prepared after accepting/ rejecting/ modifying the details of outward supplies of his suppliers including credit details on account of TCS,TDS,
- GSTR -3: ---20th of the next month; Summary of inward and outward supplies, input tax credits availed and the amount of tax payable
- GSTR – 9 (Annual Return): --- By 31st December of next FY; Details of annual expenditure & income.
For other categories of GST taxpayers, are returns are to be filed through the following respective Forms --- for a Composition Taxpayer (in Form GSTR-4), Non-resident Foreign Taxpayer (in Form GSTR-5), Input Service Distributor (in Form GSTR-6) and TDS Deductor (in Form GSTR-7). Here, it must be noted that delayed compliance of monthly returns shall attract a late fee of Rs.-100/- per day, up to a maximum of Rs. 5000/-. Similarly, delayed filing of the annual return (GSTR-9) shall demand a late fee of Rs.-100/- per day, and a maximum of 0.25% of the annual turnover.
GST Compliance Rating Score
The GST Compliance Rating has been introduced in India for the very first time by the GST Act of 2017, to encourage and ensure strict and better tax compliances in India. Now, every taxable person/entity registered under GST, shall be assigned a GST Compliance Rating Score (based on the parameters stipulated below) according to the Section 149 of the Indian GST Act of 2017.
Naturally, this gst compliance rating score will be based on the records of compliances made of a taxable person or entity, with the rules and provisions of the GST Act. This scoring will be irrespective of the nature, size, or turnover of the concerned entity. The following are the main parameters affecting determination of this score:
- Regular and perfect payment of taxes
- Punctual e-filing of GST returns
- Cooperation with tax authorities
- Accurate and transparent financial accounts and reconciliations
- And, the status of other compliances made by the taxable person/entity.
The compliance rating score will be intimated regularly to the concerned taxpayer, and shall also be put in public domain periodically. Taxpayers with higher rating scores will be given certain privileges, while taxpayers with low scores may be kept under surveillance. Taxpayers with low compliance rating or with lower rating scores than prescribed, may get black listed. Thus, besides fair business and efficient governance, the new GST regime also demands well-equipped and efficient IT structure and well-trained tax professionals and staff.