GSTR-1

Basics of GSTR-1

a. What is GSTR-1?

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales.

The return has a total of 13 sections.

b. When is GSTR-1 due?

The due dates for GSTR-1 are based on your turnover.

Businesses with sales of upto Rs. 1.5 crore will file quarterly returns.

Other taxpayers with sales above Rs. 1.5 crore have to file monthly return.

Here are the due dates for the return until March  2018.

Period	Due date
Apr-Jun 2018	31st July 2018
Jul-Sept 2018	31st Oct 2018
Oct-Dec 2018	31st Jan 2019
Jan-Mar 2018	30th Apr 2019

If your turnover is greater than Rs. 1.5 crore a return should be filed for every month.

October 201811th November 2018November 201811th December 2018

Period	Due date
June 2018	10th July 2018
July 2018	11th August 2018
August 2018	11th September 2018
September 2018	11th October 2018

c. Who should file GSTR-1?

Every registered person is required to file GSTR-1 irrespective of whether there are any transactions during the month or not.

The following registered persons are exempt from filing the return:

• Input Service Distributors
• Composition Dealers
• Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)
• Non-resident taxable person
• Taxpayer liable to collect TCS
• Taxpayer liable to deduct TDS

d. How to revise GSTR-1?

Return once filed cannot be revised. Any mistake made in the return can be rectified in the next periods (month/quarter) return. It means that if a mistake is made in September GSTR-1, rectification for the same can be made in October’s GSTR-1.

e. Late Fees and Penalty

Late Fees for not filing GSTR-1 is Rs. 200 per day of delay (Rs. 100 as per CGST Act and Rs. 100 as per SGST Act. The late fees will be charged from the date after the due date.

1. Security

Needless to say, in today’s digital world security is one of the most critical assurances. A secure software will protect confidential business information and avoid any kind of compromise that may pose threat to your business. We have witnessed how the Wannacry virus has recently hit computer systems across the globe and hackers have asked users for payment in bitcoins against retrieval of data. Hence, you need to ensure that the GST software you buy is robust not only in return filing but also from data security point of view as well.

2. Multi-Platform Adaptability

Under the new regime, every business has to be compliant – there is little choice of an alternative. The concept of invoice matching has been introduced which will ensure that every taxable person in the value chain files his/her GST Returns on time. This will directly affect the compliance rating of businesses. Thus, to keep up with these compliance requirements the GST software your purchase should be enabled on multiple platforms and must be accessible from desktop, tablets or mobile phones at any point in time, increasing the ease of online return filing.

3. Flexibility

Many large companies are already using some version of an Enterprise Resource Planning (ERP) Software to manage their business operations and record or report processes. Even small and medium businesses for that matter have accounting tools for book-keeping. In such an environment, setting up new master data in a new application (GST Software) is not a feasible option. The GST software must be flexible enough to integrate with existing systems and provide a seamless experience. Multiple standalone systems operating in silos will only inflate the operating cost of businesses.

4. Cognizance

Under the GST regime, a normal taxpayer registered in one state will have to file twenty-five returns during a financial period. If we look into the dynamics of today’s businesses, most brands are pan-India or have a global client base. Taking the example of a single online seller who operates all over the country, we see that he may have to file 25*29 (29 states)= 725 returns in a single year. That is an average of almost two returns a day! Well, this is why any GST software that you evaluate must have the intelligence to communicate the user of all possible events coming. This will ensure that no deadline is missed and your business remains up and running!

5. User Interface and Reporting

Having discussed all the features above, one key feature which is universally appreciated is a beautiful user interface. For any typical business person, this ‘beauty‘ means informative dashboards and Informative Reports (MIS). This will enable quick decision making and transparent operations. Real-time information may help you avoid over/under stocking and may save on working capital. Also, for many businesses, an evaluation criterion for new software is the number of clicks to perform a particular task. A good GST software must accommodate such requirements as well and operate on a minimum user interface principle.

 software offers this Advanced Reconciliation Tool that comes with smart features. This tool helps you reconcile your purchase data with GSTR-2A in a 5X speed. This tool assures 100% of the ITC claim, intelligence to auto-identify and match invoices in the purchase data with the GSTR-2A downloaded from GSTN portal.

Features of Advanced Reconciliation tool introduced by  :

1. Download Multi-Month GSTR-2A in one go

2. Intelligent and smart suggestion to link an invoice with the GSTR-2A data

3. Claim maximum ITC

4.  buckets to identify data match, mismatch type –

a. Matched – Shows in this section when purchase invoices uploaded by you and GSTR-2A data downloaded from the GSTN portal matches based on default and suggestions

b. Mismatch In Values – Shows in this section when purchase invoices uploaded by you and GSTR-2A data downloaded from the GSTN portal doesn’t match which is highlighted in red on the software

c. Missing In My Data – Shows in this section when you have not uploaded purchase invoices but data is present on 2A side

the goods and services tax

The constraints which any regulatory agency has in fixing the goods and services tax (GST) rates in a country include the fact that it should be low enough to ensure compliance as well as not cause inflation, and high enough to generate revenue for the government. The concerns which led the GST Council to initially prescribe multiple rates was primarily to generate the same revenue as before, and in that light, keep the effective indirect tax rate on the commodity as close as in the previous jurisdiction. Rate rationalizations over a period of time have tried to bring down the rates in sectors to boost economic activity and move from a high rate of 28% to 18% for most commodities.
In the most recent rate rationalization, the highest tax bracket of 28% has been rationalized further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners and lithium-ion batteries, being lowered to 18%. For the number of consumer durables like a refrigerator, washing machine, small screen TV, storage water heaters, paints and varnish, the rate has been reduced from 28% to 18%. Then some products like sanitary napkins have been exempted completely while for others like handmade carpets, the rate has been reduced to 5%.
The impact of the reduction of tax rates would be to reduce the price of these commodities. Since most of these are consumer items, this will impact household budgets in a positive way. However, where there is a complete exemption, those goods will not be able to enjoy the credit of input goods and services, which will become a cost and hence, the reduction in prices may not be commensurate with the percentage reduction in GST rates.
The impact of this rate rationalization would be multi-fold. There will be a revenue loss to center and states because of these rationalizations. The total reduction would be roughly 35% (10% of 28%) of the GST collected on these items. However, given that these cuts would need to be passed on to the customer, due to anti-profiteering provisions, the demand and hence the sale of those commodities would increase, following a simple demand-supply curve. Individual commodities may have varying elasticities and the quantum might vary, yet, overall sales of these items would increase. This will give a boost to economic activity in the country leading to an increase in GST and income tax revenue from other sources. For example, a factory starts manufacturing more products, it may need more contract labor, more supply for canteen services, may be hiring more vehicles to ferry and hence, more GST on these supplies. Similarly, paints are a major component of the capital expenditure by government and by corporates and individuals.
A number of items still remain within the 28% bracket, including air conditioners, certain vehicles, engines, etc. The rate structure in the next few years should move towards lower rate brackets, minimum exemptions and if any industry needs to be really benefitted in respect of a particular sector, then instead of exemption, either the goods need to be zero-rated or a minimum rate should be levied to recover the credits accruing in the cost.

TAX CALCULATIONS

To help fund public works and services and to build and maintain the infrastructures used in a country, the government usually taxes its individual and corporate residents. The tax collected is used for the betterment of the economy and all living in it. In the US and many other countries in the world, taxes are applied to some form of money received by a taxpayer. The money could be income earned from salary, capital gains from investment appreciation, dividends received as additional income, payment made for goods and services, etc. A percentage of the taxpayer’s earnings or money is taken and remitted to the government. Payment of taxes at rates levied by the state is compulsory, and tax evasion - the deliberate failure to pay one's full tax liabilities - is punishable by law. Most governments utilize an agency or department to collect taxes; in the United States, this function is performed by the Internal Revenue Service (IRS).

There are several very common types of taxes:

• Income Tax - a percentage of individual earnings filed to the federal government
• Corporate Tax - a percentage of corporate profits taken as tax by the government to fund federal programs.
• Sales Tax - taxes levied on certain goods and services
• Property Tax - based on the value of land and property assets
• Tariff - taxes on imported goods imposed in the aim of strengthening internal businesses
• Estate tax - rate applied to the fair market value of a property at the time of death

Tax systems vary widely among nations, and it is important for individuals and corporations to carefully study a new locale's tax laws before earning income or doing business there.  

Like many developed nations, the United States has a progressive tax system by which a higher percentage of tax revenues are collected from high-income individuals or corporations rather than from low-income individual earners. Taxes are imposed at federal, state and local levels. Generally speaking, the federal government levies income, corporate and payroll taxes; the state levies sales taxes; and municipalities or other local governments levy property taxes. Tax revenues are used for public services and the operation of the government, as well as the Social Security and Medicare programs. As baby boomer populations have aged, Social Security and Medicare have claimed increasingly high proportions of the total federal expenditure of tax revenue. Throughout United States history, tax policy has been a consistent source of political debate.

Capital gains taxes are of particular relevance for investors. Levied and enforced at the federal level, these are taxes on income that results from the sale of assets in which the sale price was higher than the purchasing price. These are taxed at both short-term and long-term rates. Short-term capital gains (on assets sold less than a year after they were acquired) are taxed at the owner's normal income rate, but long-term gains on assets held for more than a year are taxed at a lower rate, on the rationale that lower taxes will encourage high levels of capital investment.

gst

GST rates revised for 66 items when the  GST Council met on 11th June 2017 (Sunday).

There have been countless recommendations from states and industries to reduce the rates on certain items. Finance Minister Arun Jaitley said that the rates were revised because the main idea behind GST rates was to maintain the rates as close to the original taxes. In some cases, this was not occurring. In some items, the reduction was required because of the changing nature of the economy and changes in consumer preference.

These items were earlier placed under high rates of GST (18-28%). On studying the list, it can be found that these items are necessities and not luxuries and so the GST council has reduced the tax rate on these essential items. For example, items like spectacles, exercise books and note books are a part of everyday life and cannot be placed in the highest tax bracket of 28% along with cars and cigarettes.

Composition Scheme

Composition scheme threshold has also been increased to 75 lakhs from 50 lakhs. Now, more businesses can opt for composition scheme and enjoy reduced taxes and lesser compliance. However, it is still not applicable for service providers. There is no clarification yet on whether the increased turnover limit for Composition levy will also apply in case of Special Category States.

GST Rates Revised for Certain Items

Item	Earlier GST rate	New GST rate	Impact
Food items
Cashew nut	12%	5%
Cashew nut in shell	12%	5%(Reverse charge)
Preparations of vegetables, fruits, etc. such as pickle, murabba, chutney, jam, jelly	18%/12%	12%	Jams and pickles are a part of staple diet of the masses and certainly not a luxury
Ketchup & sauces including mustard sauces	18%	12%	Ketchups and mustard sauces are a part of everyday food and cannot be treated as a luxury
Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings (Fancier sauces)	18%	12%
Ice and snow	12%	5%
Salt, all types	5%	0%	Common salt is not excisable goods.However, GST does not subsume Salt Cess (14 paise per 40 kgs of salt produced) However, GST does not subsume Salt Cess (14 paise per 40 kgs of salt produced)
Fuel
Bio gas	12%	5%	Bio gas is an important source of alternative fuel especially in the villages
Children
Exercise books and notebooks	18%	12%
Children’s’ picture, drawing or colouring books	12%	Nil
Paper punchers, Staplers, Pencil sharpeners	28%	18%
Kites	12%	5%
Baby carriages	28%	18%
Playing cards, board games such as chess, carom ludo, etc. [other than video game consoles and machines]	28%	12%	These are the games for masses and cannot be considered as luxury items (like play stations)
Swimming pools and paddling pools	28%	18%
Entertainment
Movie tickets costing below Rs. 100	28%	18% with Full ITC	This will not affect moviegoers in big cities who watch movies in multiplexes
Medical items
Glasses for corrective spectacles and flint buttons	18%	12%	Spectacles and artificial lenses are a necessity for many with poor vision and suffering from eye problems
Intraocular lens (replace the eye’s natural lens when it is removed during cataract surgery)	28%	12%
Spectacles, corrective	18%	12%
Insulin	12%	5%	This is an essential drug for diabetic patients and now taxed at 5% along with other life-saving drugs
Dental wax	28%	18%
All diagnostic kits and reagents	18%	12%	Rates have been reduced as these are essential for medical treatments.
House & kitchen
Kajal [other than kajal pencil sticks]	28%	Nil	Kajal has been made 0 rated like Kumkum & alta
Kajal pencil sticks	28%	18%
Agarbatti	12%	5%	Taxes have been lowered to put them almost at par with puja samagri (0%)
Plastic beads	28%	12%
Plastic Tarpaulin	28%	18%
Bags- School satchels and bags (not leather or composition leather) Toilet cases Hand bags and shopping bags (excluding wicker work or basket work) Vanity bags	28%	18%
Cutlery (Spoons, forks, ladles)	18%	12%
Aluminum foil	28%	18%
Bamboo furniture	28%	18%
Coir mats, matting and floor covering	12%	5%
Muddhas made of sarkanda (stools) Phool bahari jhadoo (brooms)	5%	0%
Computers and electronics
Printers [other than multifunction printers]	28%	18%
Set top Box for TV	28%	18%
Computer monitors not exceeding 17 inches	28%	18%
CCTV	28%	18%	GST rate has been reduced as it is now an essential item to protect security of citizens
Static Convertors (UPS)	28%	18%
Other items
Postage or revenue stamps, stamp-post marks, first-day covers, etc.	12%	5%
Headgear and parts thereof	28%	18%	Rates are reduced to bring down prices of many headgear especially protective helmets
Rough precious and semi-precious stones	3%	0.25%	Rates on these items have been reduced

GST Rates Revised for Industry and Machine Items

Item	Earlier GST rate	New GST rate	Impact
Job Work Textile yarns & textile fabrics (not artificial fabrics) Jewelry making (gold and other precious metal jewelry whether plain or with diamonds, precious and semi-precious stones) Printing books (including braille books), newspapers, magazines- remains unchanged Processing leather	18% with Full ITC	5% with Full ITC	Based on industry demand, GST Council decided to lower the levy on jobwork for these industries from 18% to 5%. This is good news for those involved as it will reduce the tax burden. However, printing of newspapers remain unchanged at 5% GST.
Industry items and machine parts
Fly ash blocks	28%	12%
Pre-cast concrete pipes	28%	18%
Salt glazed stone ware pipes	28%	18%
Fixed speed diesel engines	28%	12%
Weighing machinery[not electric or electronic weighing machinery]	28%	18%
Ball bearing, roller bearings, parts & related accessories	28%	18%	These are essential parts of most machines and cannot be classified as luxury items.
Transformers industrial electronics & electrical transformer	28%	18%
Two-way radio (Walkie-talkie) used by defence, police and paramilitary forces etc.	28%	12%	These are mainly used by security forces
Tractor components	28%	18%
Electrical filaments or discharge lamps	28%	18%
Winding wires	28%	18%
Coaxial cables	28%	18%
Optical fiber	28%	18%	Used mainly in providing high speed internet
Instruments for measuring length by hand (measuring rods and tapes)	28%	18%	Measuring tapes are used in the textile and garment making industry which is a major chunk of India’s economy

GST Rates RevisedGST Rates Revised

GST rates revised for 66 items when the  GST Council met on 11th June 2017 (Sunday).

There have been countless recommendations from states and industries to reduce the rates on certain items. Finance Minister Arun Jaitley said that the rates were revised because the main idea behind GST rates was to maintain the rates as close to the original taxes. In some cases, this was not occurring. In some items, the reduction was required because of the changing nature of the economy and changes in consumer preference.

These items were earlier placed under high rates of GST (18-28%). On studying the list, it can be found that these items are necessities and not luxuries and so the GST council has reduced the tax rate on these essential items. For example, items like spectacles, exercise books and note books are a part of everyday life and cannot be placed in the highest tax bracket of 28% along with cars and cigarettes.

Composition Scheme

Composition scheme threshold has also been increased to 75 lakhs from 50 lakhs. Now, more businesses can opt for composition scheme and enjoy reduced taxes and lesser compliance. However, it is still not applicable for service providers. There is no clarification yet on whether the increased turnover limit for Composition levy will also apply in case of Special Category States.

GST Rates Revised for Certain Items

Item	Earlier GST rate	New GST rate	Impact
Food items
Cashew nut	12%	5%
Cashew nut in shell	12%	5%(Reverse charge)
Preparations of vegetables, fruits, etc. such as pickle, murabba, chutney, jam, jelly	18%/12%	12%	Jams and pickles are a part of staple diet of the masses and certainly not a luxury
Ketchup & sauces including mustard sauces	18%	12%	Ketchups and mustard sauces are a part of everyday food and cannot be treated as a luxury
Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings (Fancier sauces)	18%	12%
Ice and snow	12%	5%
Salt, all types	5%	0%	Common salt is not excisable goods.However, GST does not subsume Salt Cess (14 paise per 40 kgs of salt produced) However, GST does not subsume Salt Cess (14 paise per 40 kgs of salt produced)
Fuel
Bio gas	12%	5%	Bio gas is an important source of alternative fuel especially in the villages
Children
Exercise books and notebooks	18%	12%
Children’s’ picture, drawing or colouring books	12%	Nil
Paper punchers, Staplers, Pencil sharpeners	28%	18%
Kites	12%	5%
Baby carriages	28%	18%
Playing cards, board games such as chess, carom ludo, etc. [other than video game consoles and machines]	28%	12%	These are the games for masses and cannot be considered as luxury items (like play stations)
Swimming pools and paddling pools	28%	18%
Entertainment
Movie tickets costing below Rs. 100	28%	18% with Full ITC	This will not affect moviegoers in big cities who watch movies in multiplexes
Medical items
Glasses for corrective spectacles and flint buttons	18%	12%	Spectacles and artificial lenses are a necessity for many with poor vision and suffering from eye problems
Intraocular lens (replace the eye’s natural lens when it is removed during cataract surgery)	28%	12%
Spectacles, corrective	18%	12%
Insulin	12%	5%	This is an essential drug for diabetic patients and now taxed at 5% along with other life-saving drugs
Dental wax	28%	18%
All diagnostic kits and reagents	18%	12%	Rates have been reduced as these are essential for medical treatments.
House & kitchen
Kajal [other than kajal pencil sticks]	28%	Nil	Kajal has been made 0 rated like Kumkum & alta
Kajal pencil sticks	28%	18%
Agarbatti	12%	5%	Taxes have been lowered to put them almost at par with puja samagri (0%)
Plastic beads	28%	12%
Plastic Tarpaulin	28%	18%
Bags- School satchels and bags (not leather or composition leather) Toilet cases Hand bags and shopping bags (excluding wicker work or basket work) Vanity bags	28%	18%
Cutlery (Spoons, forks, ladles)	18%	12%
Aluminum foil	28%	18%
Bamboo furniture	28%	18%
Coir mats, matting and floor covering	12%	5%
Muddhas made of sarkanda (stools) Phool bahari jhadoo (brooms)	5%	0%
Computers and electronics
Printers [other than multifunction printers]	28%	18%
Set top Box for TV	28%	18%
Computer monitors not exceeding 17 inches	28%	18%
CCTV	28%	18%	GST rate has been reduced as it is now an essential item to protect security of citizens
Static Convertors (UPS)	28%	18%
Other items
Postage or revenue stamps, stamp-post marks, first-day covers, etc.	12%	5%
Headgear and parts thereof	28%	18%	Rates are reduced to bring down prices of many headgear especially protective helmets
Rough precious and semi-precious stones	3%	0.25%	Rates on these items have been reduced

GST Rates Revised for Industry and Machine Items

Item	Earlier GST rate	New GST rate	Impact
Job Work Textile yarns & textile fabrics (not artificial fabrics) Jewelry making (gold and other precious metal jewelry whether plain or with diamonds, precious and semi-precious stones) Printing books (including braille books), newspapers, magazines- remains unchanged Processing leather	18% with Full ITC	5% with Full ITC	Based on industry demand, GST Council decided to lower the levy on jobwork for these industries from 18% to 5%. This is good news for those involved as it will reduce the tax burden. However, printing of newspapers remain unchanged at 5% GST.
Industry items and machine parts
Fly ash blocks	28%	12%
Pre-cast concrete pipes	28%	18%
Salt glazed stone ware pipes	28%	18%
Fixed speed diesel engines	28%	12%
Weighing machinery[not electric or electronic weighing machinery]	28%	18%
Ball bearing, roller bearings, parts & related accessories	28%	18%	These are essential parts of most machines and cannot be classified as luxury items.
Transformers industrial electronics & electrical transformer	28%	18%
Two-way radio (Walkie-talkie) used by defence, police and paramilitary forces etc.	28%	12%	These are mainly used by security forces
Tractor components	28%	18%
Electrical filaments or discharge lamps	28%	18%
Winding wires	28%	18%
Coaxial cables	28%	18%
Optical fiber	28%	18%	Used mainly in providing high speed internet
Instruments for measuring length by hand (measuring rods and tapes)	28%	18%	Measuring tapes are used in the textile and garment making industry which is a major chunk of India’s economy

The full list of the items with revised GST rates is available on CBEC website.

The Council will meet on June 18 to discuss lottery taxes and the e-way bill.