Understanding The Goods And Services Tax

Goods and services tax or GST is a destination-based tax, and the burden of tax falls on the end-user who  Consumes the services or goods. The state where the goods and services are consumed receives the tax. A supplier who exports goods or services can either opt not to pay the tax under the LUT/Bond and can claim refund of accumulated ITC or can choose to pay the tax and claim refund of such taxes paid. Such export transactions are termed as ‘Zero rated supply of goods and services’ under GST . GST replaced many other taxes, such as the Central Excise, State VAT/CST, and Service Tax, Octroi, Entry Tax and WCT etc .

GST is divided into CGST or central goods and services tax, SGST or state goods and services tax, and IGST or integrated goods and services tax. The type of transaction, whether it is interstate or intrastate, determines the type of GST that has to be paid. GST return compliance refers to compliances regarding filing the document containing details of income so that tax liability may be calculated.

GST Return compliance includes Monthly Return filing under GST Law which includes return for Outward Supply i.e. GSTR-1 at present, proposed ANX-01, return for Inward Supply i.e. GSTR-2 at present, proposed ANX-02 and a consolidated monthly return i.e. GSTR-3B at present, proposed RET-01/02/03 and also includes Annual filing under GSTR-9 and Annual Audit under GSTR-9C.

Importance Of GST Return Compliance

In the intra-state supply of goods and services, where the Location of the Supplier and the Place of Supply are in the same state/UT, the  supplier has to collect both CGST and SGST/UTGST, CGST is given to the central government and the SGST/UTGST is given to the state/UT government. In the inter-state supply of goods and services, as well as Zero rated and imports of goods and services, the IGST is collected from the recipient. GST return compliance is necessary because it contains information about the inward and outward supplies of the registered dealer. It also contains information about output GST collected in respect of the outward supplies and input tax credit or the GST paid in  respect of the inward supplies , such taxes are revenue to the Government, it gives a analysis of the  Tax revenue to the Government and helps to identify the defaulters.

Understanding The GST Compliance Score (In my view, this is not required)

GST compliance is the score awarded to a company based on its promptness in filing returns. The score enables other businesses to see the degree of compliance of this company. The score is based on the timely filing of monthly and annual returns, taxes paid, furnishing details of input credits used, and other details. These scores make it possible for small businesses to choose GST compliant vendors so that they can claim their input credit correctly.

The GST compliance scores are published in the public domain so that all have access to it.