Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services in India. GST has replaced multiple indirect taxes that were previously imposed by the Central and State Governments. The implementation of GST has resulted in a simplified tax structure and reduced tax evasion. In this blog, we will discuss GST accounting in Telangana.
GST Registration in Telangana
Businesses with an annual turnover of over Rs. 20 lakhs (Rs. 10 lakhs for NE and hill states) are required to register for GST. In Telangana, businesses can register for GST through the online portal of the Goods and Services Tax Network (GSTN). Businesses can register for GST under different categories such as Regular, Composition, Non-Resident, and TDS/TCS.
GST Returns Filing in Telangana
Registered businesses in Telangana must file monthly or quarterly GST returns based on their turnover. The GST return can be filed online through the GSTN portal. The different types of GST returns that are required to be filed are:
- GSTR-1: It is the monthly or quarterly return for outward supplies. Registered businesses are required to file GSTR-1 by the 11th of the subsequent month.
- GSTR-2: It is the monthly or quarterly return for inward supplies. Registered businesses are required to file GSTR-2 by the 15th of the subsequent month.
- GSTR-3: It is the monthly return for the consolidated details of outward and inward supplies, input tax credit, and tax payable. Registered businesses are required to file GSTR-3 by the 20th of the subsequent month.
- GSTR-9: It is the annual return for the consolidated details of outward and inward supplies, input tax credit, and tax payable. Registered businesses are required to file GSTR-9 by December 31st of the subsequent financial year.
Input Tax Credit (ITC) in Telangana
Under GST, businesses can claim Input Tax Credit (ITC) on the taxes paid on purchases of goods and services used for business purposes. ITC can be claimed only if the purchases are made from a registered supplier and the recipient has a valid tax invoice or debit note. In Telangana, businesses can claim ITC on the GST paid on purchases of goods and services used for business purposes.
GST Audit in Telangana
Registered businesses in Telangana with an annual turnover of over Rs. 2 crores are required to undergo GST audit. The GST audit can be conducted by a Chartered Accountant or a Cost Accountant. The GST audit report must be submitted along with the annual return (GSTR-9) by December 31st of the subsequent financial year.
GST Payment in Telangana
After filing the GST returns, registered businesses are required to pay the tax due as per the returns filed. The GST payment can be made online through the GSTN portal or through authorized banks. The due date for payment of GST is the 20th of the subsequent month for monthly filers and the last day of the subsequent month for quarterly filers.
GST Refund in Telangana
Registered businesses in Telangana can claim a refund of the GST paid in excess of the liability. The refund can be claimed for various reasons such as exports, inverted tax structure, input tax credit accumulated due to zero-rated supplies, etc. The refund can be claimed through the GSTN portal and the application must be filed within 2 years from the relevant date.
GST Composition Scheme in Telangana
Small businesses with a turnover of up to Rs. 1.5 crores can opt for the GST composition scheme. Under this scheme, businesses are required to pay a fixed percentage of their turnover as tax and are not required to maintain detailed records.
The tax rate under the composition scheme varies based on the type of business. The tax rate for manufacturers is 1%, for traders and restaurants it is 0.5% each, and for other businesses, it is 2.5%. Businesses under the composition scheme are not eligible to claim Input Tax Credit (ITC) on their purchases.
Businesses under the composition scheme are required to file quarterly GST returns (GSTR-4) by the 18th of the subsequent month after the end of the quarter. The GSTR-4 includes details of the turnover, tax paid, and details of purchases from unregistered suppliers.
Businesses under the composition scheme are not eligible to make inter-state supplies, export their goods or services, or supply goods or services through e-commerce operators.
Businesses under the composition scheme must mention “composition taxable person” on their invoice and are not allowed to collect tax from their customers.
Conclusion
GST accounting in Telangana has streamlined the tax structure and has made it easier for businesses to comply with tax regulations. Registered businesses in Telangana must register for GST, file GST returns, claim Input Tax Credit (ITC), and pay the tax due on time to avoid penalties and legal issues. The composition scheme is a beneficial option for small businesses with a turnover of up to Rs. 1.5 crores, as it simplifies the tax structure and reduces compliance costs. It is important for businesses to understand the GST regulations and comply with them to ensure a smooth business operation.
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