The Goods and Services Tax (GST) is a unified tax system implemented in India on July 1, 2017. It replaced several indirect taxes like Service Tax, Excise Duty, and Value Added Tax (VAT) to simplify the taxation system. The GST regime in Punjab has brought about many changes in accounting practices, and businesses have had to adapt to new procedures to comply with the regulations.
Under the GST regime, businesses need to register for GST, maintain records of their transactions, and file periodic returns. Here’s a look at the accounting requirements for businesses operating in Punjab.
GST Registration:
Businesses in Punjab that have an annual turnover of more than Rs. 40 lakhs (Rs. 10 lakhs for special category states) need to register for GST. The registration process is simple and can be completed online through the GST portal. The registration certificate obtained after registration needs to be prominently displayed in the place of business.
GSTIN:
After registration, businesses are issued a unique 15-digit Goods and Services Tax Identification Number (GSTIN). The GSTIN needs to be mentioned in all invoices, returns, and other documents related to the business.
Invoicing:
Under GST, businesses need to issue GST-compliant invoices for all supplies of goods or services. The invoices need to include details like the name and address of the supplier, the name and address of the recipient, the GSTIN of the supplier and recipient, the description and quantity of goods or services, the rate of GST, and the amount of GST payable.
Input Tax Credit:
Businesses can claim input tax credit (ITC) for the GST paid on purchases used for business purposes. To claim ITC, businesses need to ensure that the supplier has filed their GST returns and has included the details of the purchase in their returns. ITC cannot be claimed for purchases that are used for personal purposes or for goods or services that are exempted from GST.
GST Returns:
Businesses registered under GST in Punjab need to file regular returns to the GST department. The frequency of filing returns depends on the annual turnover of the business. Businesses with a turnover of less than Rs. 5 crores need to file quarterly returns, while those with a turnover of more than Rs. 5 crores need to file monthly returns. The GST returns need to be filed online through the GST portal.
Penalties:
Non-compliance with GST regulations can result in penalties and fines. Businesses that fail to register for GST can be penalized up to 10% of the tax amount due, or Rs. 10,000, whichever is higher. Late filing of GST returns can attract a penalty of Rs. 50 per day, subject to a maximum of Rs. 5,000.
GST Audit:
Businesses with an annual turnover of more than Rs. 5 crores are required to undergo a GST audit. A GST audit is an examination of the business’s financial statements to ensure that they are in compliance with GST regulations. The audit needs to be conducted by a Chartered Accountant or a Cost Accountant and needs to be filed online through the GST portal.
Electronic Cash Ledger:
Under GST, businesses are required to maintain an electronic cash ledger to pay the GST due. The cash ledger can be maintained online through the GST portal and needs to be updated regularly. The cash ledger can be used to make payments towards GST, interest, penalties, and other charges.
E-way Bill:
An e-way bill is a document that needs to be generated for the movement of goods worth more than Rs. 50,000. The e-way bill needs to be generated online through the GST portal and needs to be produced to the GST department if requested. The e-way bill includes details like the name of the consignor, the name of the consignee, the goods being transported, and the value of the goods.
Composition Scheme:
Under the composition scheme, small businesses with an annual turnover of up to Rs. 1.5 crores can pay a fixed rate of tax instead of the regular GST rates. The composition scheme is optional and needs to be opted for during registration. Businesses under the composition scheme cannot claim input tax credit and need to pay tax at a fixed rate based on their turnover.
Conclusion:
The GST regime has brought about significant changes in the accounting practices of businesses in Punjab. It has simplified the taxation system and made it easier for businesses to comply with regulations. However, businesses need to ensure that they maintain accurate records of their transactions, file regular returns, and comply with the rules and regulations of GST to avoid penalties and fines.
Other Related Blogs: Section 144B Income Tax Act
