Enforcing the GST Act has made transparency possible in tax administration departments. With the help of GST filing, it has become possible to bring the tax-on-tax impact on goods and services to an end by bringing all indirect taxes under its wings.
While filing tax returns, one of the most crucial forms is the GSTR 1 form, as the GSTR 1 filing process will act as a base to auto-populate all the other forms. The proprietor or the supplier submits the outward supply of goods accounts for the quarter or year with this form.
GSTR 1 filing process can be pursued in two ways:
1. Monthly GSTR 1 filing- has to be done in the 11th month of the financial year
2. Quarterly GSTR 1 filing- has to be done on the last day of the month that is succeeding the quarter
To be able to file GST returns, it is necessary to have GST-compliant invoices for the sales and purchases made during the current quarter or financial year.
Is GST Tax Filing a success or not quite?
There are many factors that need to be considered when evaluating GST implementation and the good it’s done in the last four years.
- Technology boost- The entire process of return filing and registration has accelerated because it is now technologically driven.
- Reduced compliances- The introduction of GST has greatly reduced compliances. E.g., monthly or quarterly filing depends on the nature of the holding.
- Cost reduction- Reduction on costs of logistics, relief from export taxes and refunds are giving a considerable boost to manufacturing activities.
The pre-GST period had seen a substantial cascading effect of taxes, which could be successfully eliminated because of the introduction of GST. GST has become the backbone of the government’s initiative to boost manufacturing in the last four years while implementing reforms and reducing unnecessary costs.
Could GST be significant in the future?
While it is too early to say if GST will prove to be a success or failure, the initial signs show initiative and describe the problem areas that the government needs to focus on. GST tax filing could be a part of the larger tax-policy challenge in the future, and here is what needs to be focused on:
- GST has been pitched to enable cross-state credit on all taxes, which was previously not possible because of VAT/CST tax.
- The key to making it a success in the future will also rely on prioritising its objectives and not attempting to do a lot with just one instrument.
- Parallelly, the government could also achieve curbing black money objectives while promoting tax compliance practices.
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