All You Need To Do About GST As a New Distributor.

The Goods and Services Tax (GST) regime was introduced in India with the idea of replacing several taxes levied on the supply of goods and services. As a new distributor in the market, you need to be aware of why GST is important for your business and what you need to do to be GST compliant. So here is a quick checklist of things you need to be aware of in order to avoid last-minute hassles and anxiety of missing deadlines.

REGISTERING UNDER THE GST ACT

Your business will be liable to get registered under GST if your turnover in a financial year exceeds Rs 40 lakhs. (Rs 20 lakhs for North Eastern and hill stations). If your turnover is below the threshold limit, you can opt to register voluntarily.

GST COMPLIANT INVOICES

Once you get registered under GST, you have to make sure that you give GST compliant invoices to your customers for all your sales. Similarly, when you buy goods from your GST registered vendors, they will provide you with GST compliant purchase invoices.  Here are the things your GST compliant invoice must contain. A GST-Compliant invoice should have the following fields.

1. Invoice number and date
2. Customer name
3. Shipping and billing address
4. Customer and taxpayer’s GSTIN 
5. Place of supply
6. HSN/SAC code
7. Item details (Description, Quantity, Unit and the total value)
8. Taxable value
9. Discounts
10. Rate and amount of taxes (CGST/ SGST/ IGST)
11. Tax subject to Reverse Charges
12. Signature of the supplier

GST RETURNS TO BE FILED

As a business registered under the GST Act, you have to furnish the details of sales and purchases of goods and/or services along with the tax paid and collected. 

You can upload your invoices and file returns on the official GST website www.gst.gov.in .You need to make sure that you file the returns on the GST portal regularly within the given deadlines. So here is a calendar that will help you keep a note of the due dates.

FOR BUSINESSES WITH ANNUAL TURNOVER MORE THAN INR 1.5 CR

MONTH	DUE DATE	RETURN	PERIOD
JANUARY	11th Jan 20th Jan 31st Jan	GSTR-1 GSTR-3B GSTR-9,9A,9B,9C (Annual Return)	Dec 2019 Dec 2019 FY 2017-2018
FEBRUARY	11th Feb 20th Feb	GSTR-1 GSTR-3B	Jan 2020 Jan 2020
MARCH	11th March 20th March 31st March	GSTR-1 GSTR-3B GSTR-9 (Annual Return)	Feb 2020 Feb 2020 FY 2018-2019
APRIL	10th April 20th April	GSTR-1 GSTR-3B	March 2020 March 2020
MAY	10th May 20th May	GSTR-1 GSTR-3B	April 2020 April 2020
JUNE	10th June 20th June	GSTR-1 GSTR-3B	May 2020 May 2020
JULY	10th July 20th July	GSTR-1 GSTR-3B	June 2020 June 2020
AUGUST	10th Aug 20th Aug	GSTR-1 GSTR-3B	July 2020 July 2020
SEPTEMBER	10th Sept 20th Sept	GSTR-1 GSTR-3B	Aug 2020 Aug 2020
OCTOBER	10th Oct 20th Oct	GSTR-1 GSTR-3B	Sept 2020 Sept 2020
NOVEMBER	10th Nov 20th Nov	GSTR-1 GSTR-3B	Oct 2020 Oct 2020
DECEMBER	10th Dec 20th Dec	GSTR-1 GSTR-3B	Nov 2020 Nov 2020

FOR BUSINESSES WITH ANNUAL TURNOVER UP TO INR 1.5 CR

MONTH	DUE DATE	RETURN	PERIOD
JANUARY	20th Jan 31st Jan 31st Jan	GSTR-3B GSTR-1 GSTR-9,9A,9B,9C (Annual Return)	Dec 2019 Oct to Dec 2019 FY 2017-2018
FEBRUARY	20th Feb	GSTR-3B	Jan 2020
MARCH	20th March 31st March	GSTR-3B GSTR-9 (Annual Return)	Feb 2020 FY 2018-2019
APRIL	20th April 30th April	GSTR-3B GSTR-1	March 2020 Jan to March 2020
MAY	20th May	GSTR-3B	April 2020
JUNE	20th June	GSTR-3B	May 2020
JULY	20th July 30th July	GSTR-3B GSTR-1	June April to June 2020
AUGUST	20th Aug	GSTR-3B	July 2020
SEPTEMBER	20th Sept	GSTR-3B	Aug 2020
OCTOBER	20th Oct 31st Oct	GSTR-3B GSTR-1	Sept 2020 July to Sept 2020
NOVEMBER	20th Nov	GSTR-3B	Oct 2020
DECEMBER	20th Dec	GSTR-3B	Nov 2020

NOTE: These due dates are subject to amendments and extensions from time-to-time.

NIL RETURN

What if you have not made any purchases or sales of goods/services in a particular month? Even in such a case, you have to submit a NIL RETURN in the GST portal.

Find more information on filing NIL return on https://www.gst.gov.in/help/returns

INPUT TAX CREDIT

As a distributor, you make multiple sales and purchases for your business. Being a GST registered business, you can reduce the tax liability by claiming Input Tax Credit(ITC) to the extent of GST paid on your purchases. To understand it better, let us say, the tax payable on your sales is Rs 500. If the tax paid on your purchases is Rs 300, you can claim an Input Credit of Rs 300 and just pay Rs 200 in taxes.

Find more information on Input Tax Credit here https://www.gst.gov.in/help/inputtaxcredit  

PENALTIES FOR LATE FILING OR NOT FILING GST RETURNS

Now that you know what all returns you need to file, you should also understand that filing GST returns can’t be taken lightly. Every taxpayer is expected to file the returns following the given deadlines. If you fail to meet the deadline, a late fee of Rs 20 in case of NIL return and Rs 50 in others for each day for each CGST and SGST will be levied on you. The maximum amount that can be levied as fine is Rs. 5000. If you don’t pay the GST within the due dates of filing, you will have to pay interest at the rate of 18% p.a. in addition to the late fee.

Not paying the GST and filing returns can lead to cancellation of your GST number. Both your vendors and customers may refuse to make any payment transactions if your GST number is cancelled. You definitely don’t want to get into this loop of problems that can arise just because you failed to do your GST compliance.  

VERIFY VENDORS GST NUMBER

You should verify vendors' GST number status before making significant purchases from them. You should check if they are filing their returns regularly or not because if they are not, you won’t be able to claim any GST Input credit. When challenged they might pay their dues and file their returns but if they don’t you have to bear GST paid to them as a loss.

THE NEW GST SYSTEM (Proposed to be implemented from April 2020)

To further simplify the GST filing process, the GST council has made some changes in the system which will be implemented from April 2020. Below is a quick summary of the changes you need to know. You can find more detailed information on the GST portal https://www.gst.gov.in/ .

1. Introduction of GST FORM ANX-1 and GST FORM ANX-2.  Under the new GST system, you have to file one basic return i.e., GST RET-1 and two annexures, GST ANX-1 and GST ANX-2.
   
   • GST ANX-1 is the annexure of supplies. It contains the details of outward supplies, import of goods and inward supplies liable to reverse charge.
   • GST ANX-2 is the annexure of inward supplies. It contains the details of inward supplies, imports made and supplies received from SEZ developers.
2. Real-time continuous uploading of invoices. Following the new system, you have to upload your sales and purchase invoices in real-time. Your vendor and customer will be able to view the invoices and can take action in the GST ANX-2 form. Similarly, you can also view the invoices uploaded by them and can mark the invoice as accepted or rejected or can keep it pending for action on a later date.
3. Provisional Credit. Often businesses fail to file returns or upload invoices. If your supplier has also done that, you don’t have to worry about getting your Input Tax Credit. Going forward, with the new GST system in place, if your supplier does not file his return or fails to upload invoices, you can avail an input tax credit on a provisional basis which is restricted to 20% of the specified value.
4. Missing Invoices and Amendments. The new system will also allow you to file two amendment returns for each tax period in the main return of any tax period. Which means that in case you have to amend certain details in the GST return, you don’t have to wait to file them in the following period but can file them in the same tax period. Since you can file the amendment return in the same period, the interest on the amended tax can be avoided or reduced as applicable.

Being GST compliant is important for your business and can’t be neglected. So you need to make sure that you are paying GST on time and you or your CA or Accountant is filing the returns on time. 

Disclaimer: This article is just to provide you with information but not professional advice. For further assistance, please contact your CA or Tax consultant.