Registration under GST
The first step for any business in Delhi is to obtain a GST registration. Businesses with a turnover of up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) are exempt from GST registration. However, businesses registered under the old taxation system such as VAT, Service Tax, Excise, etc., are required to migrate to the GST system.
GST Returns
Under the GST regime, businesses are required to file monthly, quarterly, and annual GST returns. The GST returns can be filed online through the GST portal. The following are the various types of GST returns:
- GSTR-1: This return is filed by businesses to report their outward supplies of goods and services.
- GSTR-2: This return is filed by businesses to report their inward supplies of goods and services.
- GSTR-3: This return is filed by businesses to report their monthly summary of outward and inward supplies, Input Tax Credit (ITC) availed, and the tax liability.
- GSTR-4: This return is filed by businesses registered under the Composition Scheme.
- GSTR-5: This return is filed by Non-Resident Taxpayers.
- GSTR-6: This return is filed by Input Service Distributors.
- GSTR-7: This return is filed by businesses required to deduct TDS under GST.
- GSTR-8: This return is filed by e-commerce operators who are required to collect TCS under GST.
- GSTR-9: This return is filed annually by regular taxpayers.
- GSTR-10: This return is filed by businesses that have cancelled their GST registration.
Input Tax Credit (ITC)
Under the GST regime, businesses can claim Input Tax Credit (ITC) on their purchases of goods and services used for business purposes. The ITC can be claimed only if the supplier of goods and services has filed their GST returns and paid the GST due.
Record Keeping
Maintaining proper records is essential for businesses in Delhi to comply with the GST laws. The records should include invoices, bills of supply, credit and debit notes, and any other document related to the business transactions. The records should be maintained for a period of six years from the end of the financial year in which the transactions were made.
Penalties for Non-Compliance
Non-compliance with the GST laws can result in penalties and fines. Businesses that fail to register under GST can be penalized up to 10% of the tax amount or Rs. 10,000, whichever is higher. Late filing of GST returns can result in a penalty of Rs. 50 per day for each return. In case of deliberate tax evasion or fraud, the penalty can be up to 100% of the tax amount.
GST Registration
GST registration is mandatory for businesses with a turnover of over Rs. 20 lakhs (Rs. 10 lakhs for special category states) and for those who were registered under the old taxation system. However, businesses that fall below the threshold limit can voluntarily register for GST. Additionally, businesses engaged in e-commerce, export-import, and those registered under the Composition Scheme are also required to register for GST.
To register for GST, businesses need to submit an online application on the GST portal and provide their PAN, Aadhaar number, business details, and bank account information. After the submission of the application, the GST officer will verify the information and issue the GST registration certificate.
GST Returns
Under the GST regime, businesses need to file monthly, quarterly, and annual GST returns. The GST returns can be filed online on the GST portal. The due dates for filing GST returns vary based on the type of return.
The GSTR-1 return should be filed by the 11th of the next month and the GSTR-2 by the 15th of the next month. The GSTR-3 return should be filed by the 20th of the next month. In case of late filing, a penalty of Rs. 50 per day for each return is charged.
It is important for businesses to file their GST returns on time to avoid penalties and to ensure that their Input Tax Credit (ITC) is not blocked.
Input Tax Credit (ITC)
ITC is a significant benefit of GST. It allows businesses to claim a credit for the tax paid on their purchases of goods and services used for business purposes. However, businesses can claim ITC only if the supplier has filed their GST returns and paid the GST due.
To claim ITC, businesses need to maintain proper records of their purchases and sales. They should ensure that their suppliers provide them with a GST-compliant invoice that includes details such as GSTIN, invoice number, date, and the amount of tax paid.
Record Keeping
Maintaining proper records is crucial for businesses to comply with the GST laws. Businesses need to maintain records of their purchases, sales, ITC, and GST payments. The records should be kept for a period of six years from the end of the financial year in which the transactions were made.
Penalties for Non-Compliance
Non-compliance with the GST laws can result in penalties and fines. Businesses that fail to register for GST can be penalized up to 10% of the tax amount or Rs. 10,000, whichever is higher. Late filing of GST returns can result in a penalty of Rs. 50 per day for each return. In case of deliberate tax evasion or fraud, the penalty can be up to 100% of the tax amount.
Composition Scheme
Under the Composition Scheme, businesses with a turnover of up to Rs. 1.5 crores can pay a fixed percentage of their turnover as tax and file quarterly returns. The tax rates under the Composition Scheme vary depending on the type of business and range from 0.5% to 5%.
Businesses opting for the Composition Scheme cannot claim ITC and are not required to maintain detailed records of their purchases and sales. However, they still need to maintain basic records such as invoices, bills of supply, and details of tax paid.
E-way Bill
An e-way bill is a document required for the movement of goods worth over Rs. 50,000 within or outside a state. The e-way bill needs to be generated electronically on the GST portal before the movement of goods. The e-way bill contains details such as the name of the consignor and consignee, the description of goods, the value of goods, and the GSTIN of the transporter.
The e-way bill needs to be carried by the person in charge of the transportation of goods along with the invoice and other relevant documents. Failure to generate an e-way bill can result in penalties and confiscation of goods.
GST Audit
GST audit is a process of verifying the accuracy and completeness of a business’s GST returns and records. GST audit is conducted by a Chartered Accountant or a Cost Accountant appointed by the business.
Businesses with a turnover of over Rs. 5 crores are required to undergo a GST audit every year. The GST auditor examines the business’s GST returns and records, verifies the accuracy of the claimed ITC, and ensures compliance with the GST laws.
Conclusion
GST accounting is a complex process, and businesses in Delhi need to stay updated with the latest GST laws and regulations. It is important for businesses to maintain accurate records, file timely returns, and claim ITC to manage their GST accounting efficiently. Seeking professional help from GST experts can help businesses avoid penalties and fines and make the most of the benefits of GST.
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