Introduction:
The Goods and Services Tax (GST) is a major reform in India’s tax system. Introduced on July 1, 2017, this tax replaced multiple state and central taxes with a single tax. As we enter 2024, it is important for businesses to stay updated with the latest changes in GST, especially if you are dealing with taxes and filing returns regularly.
In this easy-to-understand guide, we will explain everything you need to know about GST, including how it works, how to file returns, and how it benefits your business.
What is GST?
GST is a tax you pay on goods and services at every stage of the supply chain, but it is levied only on the value added at each stage. It merges multiple taxes into one, making the system simpler and easier to manage for both businesses and the government.
Key points about GST in 2024
Different tax rates: GST has four main tax rates – 5%, 12%, 18% and 28%. Basic items like food are taxed at lower rates, while luxury goods are taxed at higher rates.
Claiming input tax credit (ITC): Businesses can reclaim the GST paid on purchases. This reduces their overall tax bill and avoids double taxation.
Mandatory e-invoicing: If your business has a turnover of more than ₹10 crore, you will need to use e-invoicing in 2024. This means creating your invoices electronically and submitting them in real-time.
Simple return filing: The main forms you will need to file are GSTR-1 for sales and GSTR-3B for a summary of your sales and purchases. You can file these either monthly or quarterly, depending on your turnover.
GST Composition Scheme: Small businesses with a turnover of up to ₹1.5 crore can pay GST at a fixed rate under this scheme, making compliance easier as they don’t have to worry about claiming ITC.
How GST helps businesses in 2024
Easier compliance: GST simplifies the tax process by combining multiple taxes into one, which means less paperwork for your business.
Lower taxes overall: The ability to claim back tax already paid on purchases reduces your overall tax burden.
More transparency: With e-invoicing and real-time updates, GST makes it easier for businesses to track their sales and purchases, reducing the chances of errors or tax evasion.
Boosts exports: Exports are zero-rated under GST, so businesses can claim a refund on any input tax they have paid, helping them compete in global markets.
How to File GST Returns in 2024: A Simple Guide
Log in to GST Portal – Visit the GST portal (gst.gov.in) and log in using your username and password.
Go to the Returns section – After logging in, go to “Returns Dashboard” and select the financial year and period for which you are filing.
File GSTR-1 for Sales – Enter the details of sales made by your business in the GSTR-1 form. You can file it monthly or quarterly.
Fill GSTR-3B for Summary – In GSTR-3B, fill in both your sales and purchases. Make sure to claim your input tax credit.
Submit and Pay – Double check everything, pay the required amount and submit your return.
Common Mistakes to Avoid While Filing GST Returns
Incorrect input tax credit claims: Make sure the tax you are claiming matches the purchase invoices you have.
Missing deadlines: Late filing may attract penalties and interest, so make sure to submit on time.
Inconsistent data between GSTR-1 and GSTR-3B: Make sure the sales you report in both forms match to avoid problems.
Not being updated with new rules: Tax laws are constantly changing, so always stay updated with any amendments.
Frequently Asked Questions about GST in 2024
1. What are the latest updates in GST for 2024?
E-invoicing is now mandatory for businesses with a turnover of over Rs 10 crore, and filing returns has been made simpler to help businesses comply faster.
2. How does GST benefit small businesses?
Small businesses can opt for the composition scheme, which allows them to pay a lower, fixed rate of tax without the hassle of claiming input tax credit.
3. What happens if I file my GST return late?
If you miss the deadline, you will have to pay a late fee of ₹50 per day (₹25 for CGST and ₹25 for SGST) and ₹20 per day if you are filing a nil return.
4. Can I file my GST returns on a quarterly basis?
Yes, if your business turnover is less than ₹5 crore, you can file your returns on a quarterly basis instead of monthly.
5. What is e-invoicing under GST?
E-invoicing means generating your invoices through the GST system in real-time, which improves transparency and reduces the chances of errors or tax evasion.
Conclusion
GST has made tax compliance easier for businesses in India. By understanding how to file returns in 2024 and comply with the latest rules, you can avoid penalties and take full advantage of GST benefits like lower taxes and transparency.