Goods and Services Tax (GST) is an indirect tax imposed on the supply of goods and services in India. The implementation of GST has brought about significant changes in the way businesses in India operate. In Bihar, GST has replaced the previous tax system, which included various state and central taxes such as Value Added Tax (VAT), Central Excise Duty, and Service Tax. In this blog, we will discuss the various aspects of GST accounting in Bihar.
Registration under GST:
Every business in Bihar that has an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for special category states) is required to register for GST. The registration process is done online on the GST portal, and the registration certificate is issued within 3-7 working days. The registration certificate contains the GSTIN (Goods and Services Tax Identification Number), which is a unique 15-digit number assigned to every registered business.
GST Returns:
Under GST, registered businesses in Bihar are required to file periodic GST returns. The GST returns include details of the sales and purchases made during the period, the tax liability, and the tax paid. The frequency of filing GST returns depends on the turnover of the business. For businesses with a turnover of up to Rs. 1.5 crores, quarterly returns are to be filed, while for businesses with a turnover of more than Rs. 1.5 crores, monthly returns are to be filed.
Input Tax Credit:
Input Tax Credit (ITC) is a mechanism that allows businesses in Bihar to claim credit for the tax paid on inputs used in the production or supply of goods and services. The ITC can be claimed only if the business has valid invoices and the tax has been paid by the supplier to the government. The ITC can be claimed only up to the amount of tax paid on the output supply.
GST Payment:
The GST payment is made online through the GST portal. The payment can be made using net banking, credit card, or debit card. The GST payment is to be made on a monthly or quarterly basis, depending on the frequency of filing GST returns. The due date for payment of GST is the 20th of the month following the tax period.
Penalties for Non-Compliance:
Non-compliance with the GST provisions in Bihar can result in penalties and fines. If a business fails to register for GST, it can be fined up to 10% of the tax due, subject to a minimum of Rs. 10,000. If a business fails to file GST returns, it can be fined up to Rs. 200 per day, subject to a maximum of Rs. 5,000.
Here are some additional details and considerations related to GST accounting in Bihar:
GST Audit:
Registered businesses in Bihar whose turnover exceeds Rs. 2 crores are required to undergo an annual GST audit. The audit is conducted by a qualified CA or CMA and is aimed at verifying the accuracy and correctness of the GST returns filed by the business. The GST audit report is to be submitted by the auditor to the GST department, along with the annual return.
Composition Scheme:
Under the composition scheme, businesses in Bihar with an annual turnover of up to Rs. 1.5 crores can opt for a simpler tax regime. The businesses under this scheme are required to pay a fixed percentage of their turnover as GST, instead of the regular GST rates. However, the businesses under this scheme are not allowed to claim input tax credit.
Reverse Charge Mechanism:
Under the reverse charge mechanism, the liability to pay GST is shifted from the supplier to the recipient of the goods or services. This mechanism is applicable in certain cases, such as when services are availed from an unregistered supplier or when goods are purchased from an unregistered dealer. In such cases, the recipient of the goods or services is required to pay the GST directly to the government.
E-Way Bill:
The E-Way Bill is a document that is generated online and is required for the movement of goods worth more than Rs. 50,000 within or outside the state of Bihar. The E-Way Bill contains details such as the consignor and consignee of the goods, the place of origin and destination, and the value of the goods. The E-Way Bill is to be generated before the goods are transported, and failure to do so can result in penalties and fines.
Here are some additional details and considerations related to GST accounting in Bihar:
Input Service Distributor:
In case a registered business in Bihar has multiple branches or divisions that are engaged in different activities, it can opt for the Input Service Distributor (ISD) mechanism. The ISD is a registered entity that distributes the credit of the GST paid on the input services to its branches or divisions. The branches or divisions can then use this credit to offset their output tax liability.
GST Refunds:
Registered businesses in Bihar can claim a refund of the excess GST paid by them due to various reasons such as exports, inverted duty structure, and accumulated input tax credit. The GST refunds can be claimed through the GST portal, and the refund amount is credited to the bank account of the business.
GST Council Meetings:
The GST Council is a constitutional body that is responsible for making recommendations to the Union and State governments on various GST-related issues. The Council is chaired by the Union Finance Minister and comprises the Finance Ministers of all the states and Union Territories. The GST Council meetings are held periodically to discuss and decide on issues related to GST, such as changes in tax rates and procedures.
GST Practitioners:
GST Practitioners are professionals who are authorized to file GST returns on behalf of businesses in Bihar. The GST Practitioners can be Chartered Accountants, Cost Accountants, or any other person who has passed the GST Practitioner examination. The businesses can appoint GST Practitioners to file their GST returns and to perform other activities related to GST compliance.
Conclusion:
In conclusion, GST accounting in Bihar requires businesses to be aware of the various provisions and regulations related to GST. The GST system has simplified the tax regime in Bihar and has made it easier for businesses to operate. However, businesses should ensure that they have a proper understanding of the GST laws and regulations to avoid any legal issues or non-compliance. Proper compliance with the GST laws is essential to avoid penalties and fines, and businesses can seek the help of GST Practitioners for efficient GST compliance.
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