GST FAQs: Form GSTR-1, Composition Scheme And More

GST has finally become a reality. For seamless migration to GST, the Central Board of Excise and Customs has time and again come up with frequently asked questions (FAQs) pertaining to various segments. The CBEC, under the purview of the Department of Revenue, clarified that traders dealing only in exempt goods or where their turnover is below Rs 20 lakh in a financial year are not required to register under GST. Also, traders not opting to pay tax under the composition scheme need to file returns on a monthly basis. Form GSTR-1 is to be filled for outward supplies made by the trader (made in the month for which return is being filed) by the 10th of the next month. Other parts of the return Form GSTR-2 and Form GSTR-3 are auto-populated and only needs to be verified and submitted by the 15th and the 20th of the next month respectively.

Here are some other queries addressed by the CBEC:

What is the basic information that needs to be furnished in Form GSTR-1?

The details to be entered in the return of outward supplies Form GSTR-1, made by the trader depend upon the nature of supplies made. The provisions are as follows:- Intra-State supplies to consumers (B2C supplies) - tax-rate wise summary; Inter-State supplies to consumers (B2C supplies) of value up to Rs. 2.5 lakh - State-wise and tax-rate wise summary; Inter-State supplies to consumers (B2C supplies) of value above Rs. 2.5 lakh - specified invoice wise details; Supplies to resellers (B2B) - specified invoice-wise details.

Under GST, will traders be required to declare their Import-Export Code (IEC) at the time of imports and exports?

For the time being, both GSTIN (Goods and Services Tax Identification Number) and IEC have to be declared. But over a period of time, traders need to declare only their GSTIN instead of IEC at the time of imports and exports.

How will GST benefit the trading community?

Under GST, a trader would be entitled to avail input tax credit paid on his domestic procurement of goods and services unlike the present indirect tax regime. Presently. a significant portion of indirect taxes namely Central Excise and Service Tax form part of the cost component for a trader. This will not be the case under GST. He will now be able to take credit of all taxes paid by him. In respect of imports, the landed cost is expected to reduce significantly under GST. Hence, the traders will gain significantly in terms of input tax credit on their operating expenses thereby decreasing their operating costs. CST which was non-creditable has been subsumed in GST. This will be a huge benefit for the traders. Entry tax has also been subsumed in GST. Removal of CST (Central Sales Tax) and entry tax shall immensely benefit the traders. Traders will be able to sell their goods to farthest areas.

Will all traders necessarily have to register under GST?

A trader dealing only in exempted goods or where his turnover is below Rs. 20 lakh in the financial year (but not engaged in inter-State supplies) is not required to register under GST.

Are monthly returns required to be filed by a trader not opting to pay tax under the composition scheme?

Traders not opting to pay tax under the composition scheme need to file returns on a monthly basis. Form GSTR-1 is to be filled for outward supplies made by the trader (made in the month for which return is being filed) by the 10th of the next month. Other parts of the return Form GSTR-2 and Form GSTR-3 are auto-populated and only needs to be verified and submitted by the 15th and the 20th of the next month respectively.