UNIT IV: TAX ENVIRONMENT

Tax Environment – GST – Meaning – Filing of GST – Impact of GST in Indian Economy – Role of Taxation
on GST.

TAX ENVIRONMENT

Environmental taxes, also known as green taxes, pollution taxes or ecotaxes, are a wide range
of legislative charges on businesses and private individuals, aimed at reducing practices
which cause damage to the environment.

Environmental taxes have many important advantages, such as environmental effectiveness,

economic efficiency, the ability to raise public revenue, and transparency. Also,
environmental taxes have been successfully used to address a wide range of issues including
waste disposal, water pollution and air emissions.

Of course, environmental taxes don't just correct externalities. They also raise revenue, and
that can be a major advantage. That revenue can be used to cut (or prevent increasing) other
taxes, to reduce the budget deficit, to pay for public goods, to address distributional goals, or for
many other purposes.

GST – MEANING

The goods and services tax (GST) is a tax on goods and services sold domestically for
consumption. The tax is included in the final price and paid by consumers at point of sale and
passed to the government by the seller. The GST is a common tax used by the majority of
countries globally.

FILING OF GST

GST Return Filing

The businesses registered under GST have to file returns monthly, quarterly and annualy based
on the category of business through the Government of India's GST portal. They have to
provide the details of the sales and purchases of goods and services along with the tax
collected and paid.
Implementation of a comprehensive Income Tax system like GST in India will ensure that
taxpayer services such as registration, returns, and compliance are transparent and
straightforward. Individual taxpayers will be using 4 forms for filing their GST returns such as the
return for supplies, return for purchases, monthly returns, and annual return. Small taxpayers
who have opted for a composition scheme will have to file quarterly returns. All filing of returns
will be done online.

What is GST Return?

GST return is an official document that furnishes all the purchases, sales, tax paid on
purchases, and tax collected on sales-related details. The GST returns is required to be filed,
following which the taxpayer has to pay off the tax liability.
 Who should file GST Returns?
GST returns has to be filed by all the business entities who are registered under the GST
system. The filing process has to be identified on the basis of the nature of the business.
The registered dealer who part of the following activities needs to file a GST return:
1. Sales
2. Purchase
3. Output Goods and services tax (on Sales)
4. Input Tax Credit with GST paid on the purchase

How to File GST Returns Online?

From manufacturers and suppliers to dealers and consumers, all taxpayers have to file their tax
returns with the GST department every year. Under the new GST regime, filing tax returns has
become automated. GST returns can be filed online using the software or apps provided by
Goods and Service Tax Network (GSTN) which will auto-populate the details on each GSTR
forms. Listed below are the steps for filing GST return online:
 Step:1 Visit the GST portal (www.gst.gov.in).
 Step:2 A 15-digit GST identification number will be issued based on your state code and PAN
number.
 Step:3 Upload invoices on the GST portal or the software. An invoice reference number will
be issued against each invoice.
 Step:4 After uploading invoices, outward return, inward return, and cumulative monthly return
have to be filed online. If there are any errors, you have the option to correct it and refile the
returns.
 Step:5 File the outward supply returns in GSTR-1 form through the information section at the
GST Common Portal (GSTN) on or before 10th of the following month.
 Step:6 Details of outward supplies furnished by the supplier will be made available in GSTR-
2A to the recipient.
 Step:7 Recipient has to verify, validate, and modify the details of outward supplies, and also
file details of credit or debit notes.
 Step:8 Recipient has to furnish the details of inward supplies of taxable goods and services in
GSTR-2 form.
 Step:9 The supplier can either accept or reject the modifications of the details of inward
supplies made available by the recipient in GSTR-1A.

Types of GST Returns under New GST Law

The list of all types of GST returns in India along with frequency and the due date for filing
returns.

Return Who should file the return and what should be

Frequency Due date for f
form filed?

Registered taxable supplier should file details of

GSTR-1 outward supplies of taxable goods and services as Monthly 11th of the subseque
effected.
 Return Who should file the return and what should be
Frequency Due date for f
form filed?

Registered taxable recipient should file details of

GSTR-2 inward supplies of taxable goods and services Monthly 15th of the subseque
claiming input tax credit.

Registered taxable person should file monthly

return on the basis of finalization of details of
GSTR-3 Monthly 20th of the subseque
outward supplies and inward supplies plus the
payment of amount of tax.

18th of the month su

GSTR-4 Composition supplier should file quarterly return. Quarterly
quarter.

GSTR-5 Return for non-resident taxable person. Monthly 20th of the subseque

GSTR-6 Return for input service distributor. Monthly 13th of the subseque

Return for authorities carrying out tax deduction at

GSTR-7 Monthly 10th of the subseque
source.

E-commerce operator or tax collector should file

GSTR-8 details of supplies effected and the amount of tax Monthly 10th of the subseque
collected.

Registered taxable person should file annual 31 December of the

GSTR-9 Annual
return. year.

Within 3 months of
Once, after the
Taxable person whose registration has been cancellation or date
GSTR-10 registration of GST
cancelled or surrendered should file final return. cancellation order, w
is cancelled
is later.

28th of the month, fo

Person having UIN claiming refund should file
GSTR-11 Monthly the month for which
details of inward supplies.
statement was filed.

Various Kinds of GSTR Forms with Explanation

 GST returns can be filed using different forms depending on the type of transaction and
registration of the taxpayer. Return forms for normal taxpayers are:
GSTR 1
GSTR-1 form has to be filed by a registered taxable supplier with details of the outward supplies
of goods and services. This form is filled by the supplier. The buyer has to confirm the auto-
populated buy information on the form and make modifications if required. The form will contain
the following details:
 Business name, period for which the return is filed, Goods and Services Taxpayer
Identification Number (GSTIN).
 Invoices issued in the previous month and the corresponding taxes collected.
 Advances received against a supply order that has to be delivered in the future.
 Revision in outward sales invoices from the previous tax periods.
GSTR-1 has to be filed by 10th of the following month.
GSTR 2
GSTR-2 form has to be filed by a registered taxable recipient with details of the inward supplies
of goods and services. The form will contain the following details:
 Business name, a period for which the return is filed, Goods and Services Tax Identification
Number (GSTIN).
 Invoices issued in the previous month and the corresponding taxes collected.
 Advances received against a supply order that has to be delivered in the future.
 Revision in outward sales invoices from the previous tax periods.
GSTR-2 has to be filed by 15th of the following month.
GSTR 3
GSTR-3 form has to be filed by a registered taxpayer with details that are automatically
populated by from GSTR-1 and GSTR-2 returns forms. The taxpayer has to verify and make
modifications, if any. GSTR-3 return form will contain the following details:
 Details about Input Tax Credit, liability, and cash ledger.
 Details of tax paid under CGST, SGST, and IGST.
 Claim a refund of excess payment or request to carry forward the credit.
GSTR-3 has to be filed by 20th of the following month.
GSTR 4
GSTR-4 form has to be filed by taxpayers who have opted for the Composition Scheme.
Taxpayers with small business or a turnover of up to Rs.75 lakh can opt for the Composition
Scheme wherein he or she have to pay tax at a fixed rate based on the type of business.
Taxpayers under this scheme will not have input tax credit facility. GSTR-4 quarterly return form
will contain the following details:
 The total value of consolidated supply made during the period of return.
 Details of tax paid.
 Invoice-level purchase information.
GSTR-4 has to be filed by 18th of the following month.
GSTR 5
 GSTR-5 form has to be filed by all registered non-resident taxpayers. This form will contain the
following:
 Name and address of the taxpayer, GSTIN, and period of return.
 Details of outward supplies and inward supplies.
 Details of goods imported, any amendments in goods imported during the previous tax
periods.
 Import of services, amendments in import of services
 Details of credit or debit notes, closing stock of goods, and refund claimed from cash ledger.
GSTR-5 has to be filed by 20th of the following month.
GSTR 6
GSTR-6 form has to be filed by all taxpayers who are registered as an Input Service Distributor.
This form will contain the following:
 Name and address of the taxpayer, GSTIN, and period of return.
 Details of input credit distributed.
 Supplies received from registered persons.
 The amount of input credit availed under the current tax period.
 Details of inward supplies will be auto-populated from GSTR-1 and GSTR-5 return forms.
 Details of the receiver of input credit corresponding to his or her GSTIN.
 Details of credit or debit notes.
 Input tax credit received, input tax credit reverted, and input tax credit distributed as SGST,
CGST, and IGST.
GSTR-6 has to be filed by 13th of the following month.
GSTR 7
GSTR-7 form has to be filed by all registered taxpayers who are required to deduct tax at
source under the GST rule. This form will contain the following:
 Name and address of the taxpayer, GSTIN, and period of return.
 TDS details and amendments in invoice amount, TDS amount or contract details.
 TDS liability will be auto-populated. Details of fees for late filing of return and interest on
delayed payment of TDS.
 Refund received from Electronic Cash Ledger will be auto-populated.
GSTR-7 has to be filed by 10th of the following month.
GSTR 8
GSTR-8 form has to be filed by all e-Commerce operators who are required to collect tax at
source under the GST rule. This form will contain details of supplies effected and the amount of
tax collected under Sub-section (1) of Section 43C of Model GST Law. Other details include:
 Name and address of the taxpayer, GSTIN, and period of return.
 Details of supplies made to registered taxable person and amendments, if any.
 Details of supplies made to unregistered persons.
 Details of Tax Collected at Source.
 TDS liability will be auto-populated. Details of fees for late filing of return and interest on
delayed payment of TDS.
GSTR-8 has to be filed by 10th of the following month.
GSTR 9
 GSTR-9 form is filed by normal taxpayers with details of all income and expenditure for the year.
This detail will be regrouped in accordance with the monthly returns. The taxpayer will have the
opportunity to make modifications in the information provided if required. GSTR-9 has to be filed
by 31st December of the following financial year along with the audited copies of the annual
accounts.
GSTR 10
GSTR-10 form has to be filed by any taxpayer who opts for cancellation of GST registration.
This form will contain the following:
 Application Reference Number (ARN).
 Date of cancellation of GST registration.
 Unique ID of cancellation order.
 Date of cancellation order.
 Details of closing stock including amount of tax payable on closing stock.
GSTR-10 final return form has to be filed within 3 months of the date of cancellation or date of
cancellation order, whichever is later.
GSTR 11
GSTR-11 form has to be filed by everyone who has been issued a Unique Identity Number
(UIN) and claims a refund of the taxes paid on inward supplies. This form will contain the
following details:
 Name of the government entity, UIN, and period of return.
 All inward purchases from GST registered supplier will be auto-populated.
Based on the above mentioned details, the tax refund will be made. GSTR-11 form has to be
filed on 28th of the month, following the month for which supply was received.

How to File GST Returns with GSTN?

The Goods and Service Tax Network will store information of all GST registered sellers and
buyers, combine the submitted details, and maintain registers for future reference. Companies
have to file 3 monthly returns every 3 months and one annual return in a financial year (37
returns in total). GSTN has launched a simple excel based template to make the filing of returns
easier for businesses. This excel workbook can be downloaded from the GST common portal
free of charge. Taxpayers can use this template to collate invoice data regularly. The details of
inward and outward supplies can be uploaded on the GST portal on or before the due date. The
data preparation can be done offline. Only while uploading the prepared file on the GST portal
will the taxpayer need the Internet.

How to check GST Returns Status?

The official GST Login Portal allows you to check the status of your GST Returns. There are 3
different methods for the same. The methods are as follows:
 Tracking the status using the ‘Return Filing Period’ option
 Tracking the status using the ‘ARN’ option
 Tracking the status using the ‘Status’ option
Tracking the status using the ‘Return Filing Period’ option
 Step 1: Use your credentials to log in to the online GST portal at https://www.gst.gov.in/.
 Step 2: Click on the ‘Services’ tab from the top menu.
 Step 3: Navigate to ‘Track Return Status’ under the ‘Returns’ option.
 Step 4: Select the ’Return Filing Period’ option.
 Step 5: In the next page, select the financial year and the return filing period from the
respective drop-down boxes.
 Step 6: Click on the ‘Search’ button and the status of the GST Return will be displayed on
your screen.
Tracking the status using the ‘ARN’ option
 Step 1: Use your credentials to log in to the online GST portal at https://www.gst.gov.in/.
 Step 2: Click on the ‘Services’ tab from the top menu.
 Step 3: Navigate to ‘Track Return Status’ under the ‘Returns’ option.
 Step 4: Select the ’ARN’ option.
 Step 5: Enter the ARN in the field provided.
 Step 6: Click on the ‘Search’ button and the status of the GST Return will be displayed on
your screen
Tracking the status using the ‘Status’ option
 Step 1: Use your credentials to log in to the online GST portal at https://www.gst.gov.in/.
 Step 2: Click on the ‘Services’ tab from the top menu.
 Step 3: Navigate to ‘Track Return Status’ under the ‘Returns’ option.
 Step 4: Select the ’Status’ option.
 Step 5: Select the Status of Return that you are looking for from the drop-down box.
 Step 6: Click on the ‘Search’ button and the status of the GST Return will be displayed on
your screen.

How to Download GST Returns?

You can download your GST Returns from the official GST Portal. You can follow the steps
mentioned below to download your GST Returns:
 Step 1: Use your credentials to log in to the online GST portal at https://www.gst.gov.in/.
 Step 2: Click on the ‘Services’ tab from the top menu.
 Step 3: Navigate to ‘Returns Dashboard’ under the ‘Returns’ option.
 Step 4: In the next page, select the financial year and the return filing period from the
respective drop-down boxes.
 Step 5: Click on the ‘Search’ button and select the GTR that you want to download.
 Step 6: Click on the ‘Prepare Offline’ button under the selected GSTR.
 Step 7: Navigate to the ‘Download’ option and click on ‘Generate File’.
 Step 8: In general, the request for the generation of the file takes around 20 minutes.
 Step 9: Once the file is generated, a download link will be generated. Click on the ‘Click Here’
option to download the ZIP file containing your GST Returns.

Penalty for late filing of GST Returns

A penalty will be levied on the taxpayer in case he/she fails to file the returns on time. This
penalty is called the late fee. As per the GST Law, the late fee is Rs.100 for each day for each
Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST). Thus, the
total fine amount will be Rs.200 per day. However, this rate is subject to changes which will be
announced through notifications. The maximum amount of fine that can be levied is Rs.5,000.
Integrated GST or IGST does not attract any late fee in case the return filing is delayed. The
taxpayer will also be required to pay an interest at the rate of 18% p.a. in addition to the late fee.
This interest has to be calculated by the taxpayer on the amount of tax that is to be paid. The
time period will be calculated from the day following the filing deadline till the date when the
actual payment is made.
GST Returns FAQs
1. For taxpayers who files returns on a quarterly basis, what are the types of
regular returns that should be used?
For taxpayers who have an aggregate turnover of up to Rs.5 crore in the previous year, the
regular returns that are to be used are either Sugam, Sahaj, or normal (quarterly) returns.
2. For what reasons can we file Form RET-1 through the SMS mode?
Form RET-1 can be filed through SMS in the case of Nil returns, where supplies have not been
made or received.
3. If documents are left pending by recipients, can amendments be made in
the documents by the supplier?
Suppliers can only make amendments in the documents if the document has been rejected by
the recipient, and not if they have been left pending.
4. Can the period of filing of returns be changed by the taxpayer?
Yes, the period of filing can be changed by the taxpayer once. This can only be done at the time
that the first return of the financial year is filed.
5. In form ANX-1, if the document details are entered into the wrong table, can
it be corrected
The facility to shift such documents to the correct table is available but is provided only once the
documents are rejected by the recipient.

IMPACT OF GST IN INDIAN ECONOMY

The main purpose of GST is to bring about the single uniform system of taxation in the
manufacture, sale and the consumption of goods and services in India. The GST is said
to reduce the level of Tax evasion and the corruption and it also reduces the tax burden
of the public.

Increased revenues: GST will add to government revenues by extending the tax base.
Fostering production: GST will provide credit for the taxes paid by producers in the goods or
services chain.

Findings: GST will play a major role in the growth of the economy of India. After the
enforcement of GST in India, GDP will also grow ranging from 0.9% to 1.7%. GST will not
only bring reform in indirect tax regime in India but also play a very important role in the growth
of trade, commerce and other sectors in India.

Goods and Services Tax (GST) is expected to provide the much needed stimulant for economic
growth in India by transforming the existing basis of indirect taxation towards free flow of goods
 and services within the economy and also eliminating the cascading effect of tax on tax.The
impact of GST on macroeconomic indicators is likely to be very positive in the medium-
term. Inflation would be reduced as the cascading (tax on tax) effect of taxes would be
eliminated.

Tax policy plays two important roles in financing economic development. One is to maintain an
economy at a higher employment level so that the saving capacity of the people is raised
with an increase in income per head.

GST Benefits
 Uniformity in Taxation. ...
 Helping Government Revenue Find Buoyancy. ...
 Cascading of Taxes. ...
 Simpler and Lesser Number of Compliances. ...
 Common Procedures. ...
 Benefits to the Economy. ...
 Benefits to Industry and Trade.

ROLE OF TAXATION ON GST.

GST stands for Goods and Services Tax. It is an Indirect tax which introduced to replacing a
host of other Indirect taxes such as value added tax, service tax, purchase tax, excise
duty, and so on. GST levied on the supply of certain goods and services in India. It is one tax
that is applicable all over India.

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in
India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the
Parliament on 29th March 2017 and came into effect on 1st July 2017.

The objective of incorporating the GST is to remove the current imperfections prevalent in
indirect taxes and improve tax compliance; this will mitigate the effects of costly taxes
cascading onto the end consumers. Its implementation is also expected to trigger growth in
business and economy in India.