Basics of GST Returns: For the sake of brevity, the term input tax credit has been referred to as ITC in this Chapter. The section numbers referred to in the Chapter pertain to CGST Act, unless otherwise specified. Filing of GST returns helps in determination of tax liability of the return filer and at the same time it also has a huge bearing on determination of tax liability of other persons with whom the former has entered into taxable activities.
The term “return” ordinarily means statement of information (facts) furnished by the taxpayer, to tax administrators, at regular intervals. The information to be furnished in the return generally comprises of the details pertaining to the nature of activities/business operations forming the subject matter of taxation; the measure of taxation such as sale price, turnover, or value; deductions and exemptions; and determination and discharge of tax liability for a given period.
In any tax law, “filing of returns” constitutes the most important compliance procedure which enables the Government/ tax administrator to estimate the tax collection for a particular period and determine the correctness and completeness of the tax compliance of the taxpayers.
The returns serve the following purposes:
- a) Mode for transfer of information to tax administration;
- b) Compliance verification program of tax administration;
- c) Finalization of the tax liabilities of the taxpayer within stipulated period of limitation;
- d) Providing necessary inputs for taking policy decision;
- e) Management of audit and anti-evasion programs of tax administration
The taxpayer is generally required to furnish the return in a specific statutory format. These formats are, therefore, designed to take care of all the provisions of the law that have a bearing on computation of tax liability of a taxpayer. Hence, a study of various fields contained in the form of return vis-à-vis the relevant corresponding provisions of the tax law, can facilitate overall understanding of the tax law in a better manner.
Under the GST laws, the correct and timely filing of returns is of utmost importance because of two reasons. Firstly, under GST laws, a taxpayer is required to estimate his tax liability on “self assessment” basis and deposit the tax amount along with/before the filing of such return. The return, therefore, constitutes a kind of working sheet/supporting document for the tax authorities that can be relied upon as the basis on which the tax has been computed by the taxpayer. Secondly, under the GST regime, filing of returns not only determines the tax liability of the person filing the same, but it also has a huge bearing on determination of tax liability of other persons with whom the former has entered into taxable activities.
In this Chapter, we will study various provisions concerning filing of returns under the GST laws including types of returns, due dates for filing of returns, particulars contained in the returns, how the returns filed by a taxpayer will be processed by the tax administrators for determining the tax liability of the person filing the return as well as other taxable persons etc.
Chapter IX of the CGST Act [Sections 37 to 48] prescribes the provisions relating to filing of returns as under:
| Section 37 | Furnishing details of outward supplies |
| Section 38 | Furnishing details of inward supplies |
| Section 39 | Furnishing of returns |
| Section 40 | First return |
| Section 41 | Claim of input tax credit and provisional acceptance thereof |
| Section 42 | Matching, reversal and re-claim of input tax credit |
| Section 43 | Matching, reversal and re-claim of reduction in output tax liability |
| Section 44 | Annual Return |
| Section 45 | Final Return |
| Section 46 | Notice to return defaulters |
| Section 47 | Levy of late fee |
| Section 48 | Goods and services tax practitioners |
The provisions relating to form and manner, in which information is to be furnished through returns, are given under Chapter VIII of the CGST Rules [Rules 59-84]. State GST laws also prescribe identical provisions in relation to filing of returns.
Provisions of returns, other than late fee, under CGST Act have also been made applicable to IGST Act vide section 20 of the IGST Act.
In the subsequent pages of this Chapter, provisions of sections 37 to 48 have been extracted, followed by analysis thereof. When studying the statutory provisions, the definitions (extracted first) must also be referred to simultaneously, so as to understand the precise meaning of the terms used.
The basic features of the return mechanism in GST include electronic filing of returns, uploading of invoice level information and auto-population of information relating to ITC from returns of supplier to that of recipient, invoice-level information matching and auto-reversal of ITC in case of mismatch. The returns mechanism is designed to assist the taxpayer to file returns and avail ITC.
All the returns under GST laws are to be filed electronically. Taxpayers can file the statements and returns by various modes. Firstly, they can file their statement and returns directly on the GST common portal online. However, this may be tedious and time consuming for taxpayers with large number of invoices. For such taxpayers, offline utilities have been provided by GSTN that can be used for preparing the statements offline after downloading the auto populated details and uploading them on the common portal. GSTN has also developed an ecosystem of GST Suvidha Providers (GSP) that will integrate with the common portal.
The details furnished by the taxpayer in the form of returns shall be consolidated and stored at the common portal which will be common for both, i.e. Central Government and State Governments.
Other GST Return Articles
- GST Due Dates
- GST Return Rules
- GST Return Filing
- GST Return Check points
