Article on Compliance under GST Regime - Returns ITC Matching

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Goods and Services Tax (GST) is a comprehensive tax regime where all the indirect taxes are subsumed into one tax. The GST regime has brought about many significant changes in the indirect taxation system. One of the major changes is the compliance requirements under the GST regime. In this article, we will discuss the compliance requirements concerning the filing of returns and the matching of Input Tax Credit (ITC).

‍Compliance under the GST Regime

‍Under the GST regime, businesses are required to comply with various tax-related requirements. Compliances under GST include registration, filing of returns, payment of taxes, and availing of Input Tax Credit. Non-compliance with the GST regime may lead to various penalties and fines. The GST regime requires the businesses to file monthly returns and an annual return.

‍Filing of Returns

‍Under the GST regime, businesses are required to file monthly returns in GSTR-1, GSTR-2, and GSTR-3. The GSTR-1 is a monthly return which reflects the sales made by the business during the month. The GSTR-2 is a monthly return which reflects the purchases made by the business during the month. The GSTR-3 is a monthly return which reflects the net tax liability of the business.

‍Input Tax Credit (ITC) Matching

The Input Tax Credit (ITC) is a crucial aspect of compliance. ITC is the credit that a business can avail of to set off its tax liability. However, to avail of ITC, a business must ensure that the ITC claimed by it matches with the ITC declared by the supplier in his GSTR-1. The matching of ITC is done through the filing of GSTR-2A, GSTR-2B, and GSTR-3B.

‍GSTR-2A

‍GSTR-2A is an auto-populated form that reflects the purchases made by a business during a month. The form is generated based on the GSTR-1 filed by the supplier. The ITC claimed by a business will be matched with the ITC declared by the supplier in his GSTR-1.

‍GSTR-2B

‍GSTR-2B is a monthly return that reflects the ITC available to a business based on the purchases made during a month. The GSTR-2B form is generated based on the GSTR-1 filed by the supplier. The GSTR-2B form also reflects the ITC that is not available to a business.

‍GSTR-3B

‍GSTR-3B is a monthly return which reflects the ITC availed by a business during a month. The ITC availed by the business is matched with the ITC declared by the supplier in his GSTR-1.

‍Conclusion

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Compliance under the GST regime is crucial for businesses to avoid any penalties and fines. The GST regime requires businesses to file monthly returns and an annual return. Besides, the matching of ITC is a vital aspect of compliance under the GST regime. To avail of ITC, a business must ensure that the ITC claimed by it matches with the ITC declared by the supplier in his GSTR-1. Businesses must comply with the GST regime to avoid any legal consequences.
Under the GST regime, businesses are required to comply with various tax-related requirements. Compliance under GST include registration, filing of returns, payment of taxes, and availing of Input Tax Credit. The GST regime requires the businesses to file monthly returns and an annual return. To avail of ITC, a business must ensure that the ITC claimed by it matches with the ITC declared by the supplier in his GSTR-1. The matching of ITC is done through the filing of GSTR-2A, GSTR-2B, and GSTR-3B.