GST: What happens if person files return but doesn’t make payment of taxes?

Under the GST law, the filing of return without payment of taxes shall not be considered as a valid return.

GST FAQs :

I understand that the applicability of GST on reverse charge basis has been suspended. In this scenario, I want to know if the notification is also applicable on import of services for which we are paying GST on reverse charge basis?

• In case of import of services, the integrated tax is payable under Section 5(3) of the Integrated Goods and Service Tax Act, 2017 (IGST Act). The liability to pay GST under reverse charge has only been deferred in respect of transactions falling under Section 5(4) of the IGST Act, which only covers procurements made from suppliers not registered under GST law. Accordingly, import of services shall continue to be liable to Integrated Tax under reverse charge mechanism.

Who can opt for the composition scheme? Is liability to pay taxes under reverse charge mechanism covered under the composite scheme?

• The GST law provides an option to a supplier of goods, having an annual aggregate turnover not exceeding Rs 10 million, to opt for payment of GST under Composition Scheme. A similar option has also been provided to a person engaged in the supply of food/beverages (other than alcohol). However, this option is not available for other service providers. This option is also not available if the supplier is engaged in undertaking inter-state supplies.
• The GST payable under reverse charge mechanism is not covered under the composition scheme. If a person registered under composition scheme procures any goods/services on which GST is payable under reverse charge mechanism, the person shall be required to pay GST at applicable rate and not based on rates prescribed under composition scheme.

What happens if the taxable person files the return under the GST law but does not make payment of taxes?

• Under the GST law, the filing of return without payment of taxes shall not be considered as a valid return. Section 2(117) defines a valid return. It means, a return furnished under sub-section (1) of Section 39 on which self-assessed tax has been paid in full. It is only the valid return that would be used for allowing input tax credit (ITC) to the recipient. In other words, unless the supplier has paid the entire self-assessed tax and filed his return and the recipient has filed his return, the ITC of the recipient would not be confirmed.

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Over 1.9 million file GST returns

GSTN hopes number will double by deadline

 

As many as 19,42,354 taxpayers have till Wednesday filed IT return for July under the new goods and services tax (GST) regime. Officers of the GST Network (GSTN), responsible for the information technology (IT) backbone of the GST, said they hoped 2.8 million more would do so by the deadline in the next two days.

Those who have filed returns constitute over 22 per cent of total assessees (8.7 million) under the GST regime. However, of the 8.7 million assessees, 2.2 million are yet to complete the migration process to the new indirect income tax regime.

The GSTN, also managing the tax filing apparatus, has geared up the income tax return network to handle the rush, its Chairman Navin Kumar said. A last-minute rush caused the GSTN portal to crash last week, forcing the government to extend the deadline by five days to August 25.

Those who wish to claim transitional input tax credit can file returns by August 28.

Sudhir Singh, MD of Marg ERP, a solution provider for GST returns, said over 1.9 million filers was not really a big number, but the numbers would swell by the deadline. He added that his clients were finding it difficult to file returns....Read Full Article