The Ultimate Guide to GST Returns Filing For Multiple States

Introduction

The implementation of Goods and Services Tax (GST) in India has brought about significant changes in the tax landscape for businesses. Filing GST returns is an essential compliance requirement, ensuring businesses fulfill their tax obligations transparently and efficiently. However, for businesses operating across multiple states, the process of filing GST returns can be complex and challenging. In this article, we will explore key considerations and best practices to streamline the GST return filing process for such businesses.

What is GST Return?  

A GST return is a document that contains information about all income/sales and/or expenses/purchases that a GST-registered taxpayer is required to report to the tax authorities. A registered dealer is required by GST to file GST returns that broadly include:

• Sales
• ITC (GST paid on Purchase)
• Purchases
• Output GST (on sales)

What are the different types of returns under GST (Goods and Service Tax)?

There are 13 GST returns. GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08, and ITC-04 are the codes. However, not all returns apply to all taxpayers. Returns are filed by taxpayers based on the type of taxpayer/type of registration obtained. A taxpayer that has a turnover of more than INR 5 crore, must also file a self-certified reconciliation statement in Form GSTR-9C.

Taxpayers can obtain statements of Input Tax Credit, known as GSTR-2A (dynamic) and GSTR-2B (static). Small taxpayers registered under the QRMP scheme can also use the Invoice Furnishing Facility (IFF) to provide their business-to-business (B2B) sales for the first two months of the quarter. These small taxpayers will still be required to file monthly returns on Form PMT-06.

What are the Challenges of GST Return Filing for Multiple States?

1. Jurisdictional Complexity: Operating in multiple states means dealing with different tax jurisdictions, tax rates, and regulations. Each state may have specific requirements, making it crucial to understand and adhere to the rules governing GST return filing in each location.

2. Consolidation of Data: Consolidating data from multiple states can be time-consuming and prone to errors. Businesses need to maintain accurate records and ensure proper synchronization of data to avoid discrepancies during the return filing process.

3. Reconciliation of Invoices: Reconciling invoices across multiple states can be a daunting task, particularly when dealing with inter-state transactions. Businesses must maintain meticulous records and ensure the accuracy of invoices to avoid any discrepancies during the return filing process.

What are the strategies for GST Return Filing for multiple states?

There are different strategies to streamline GST Return Filing for multiple states. Some of them are mentioned below-:

1. Centralized Accounting and Reporting: Implementing a centralized accounting system enables businesses to consolidate financial data from various states. By integrating data from different branches or units, businesses can streamline the process of collating and reconciling financial information, thus facilitating more efficient GST return filing.

2. Robust Tax Management Software: Utilizing robust tax management software tailored for businesses operating across multiple states can greatly simplify the GST return filing process. Such software can automate various tasks, including data consolidation, invoice reconciliation, and generating accurate GST returns, minimizing errors and saving time.

3. Dedicated Compliance Team: Establishing a dedicated team responsible for GST compliance across multiple states can help businesses stay on top of the requirements. This team should have a thorough understanding of the GST regulations in each state and regularly update their knowledge to adapt to any changes or updates in the tax framework.

4. Regular Training and Awareness: Conducting regular training sessions and workshops for employees involved in GST return filing can enhance their understanding of the processes and help them stay updated with the latest compliance requirements. This ensures a consistent and accurate approach to GST return filing across all states of operation.

5. Engage Professional Help: Engaging the services of a tax consultant or GST expert can be beneficial, particularly for businesses with complex operations. These professionals can provide guidance, ensure compliance, and offer insights on optimizing tax strategies, reducing the burden on businesses, and ensuring accurate and timely GST return filing.

Conclusion

For businesses operating across multiple states, filing GST returns can be a challenging task due to jurisdictional complexities and data consolidation issues. By implementing strategies such as centralized accounting systems, robust tax management software, dedicated compliance teams, regular training, and professional help, businesses can streamline the GST return filing process. Adhering to best practices and staying updated with the latest regulatory changes will ensure businesses fulfill their GST compliance requirements efficiently and minimize the risk of errors or penalties.

Suggested Read: A Complete Guide on GST Returns on Exports & Refund Process