How to File Tax Return for Small Business with GST

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The economy in India witnessed its biggest ever tax reformation with the introduction of GST (or Goods and Services Tax), which is necessarily a destination-based tax reporting structure. Under this tax regimen, business has to report every transaction of goods and services through the last mile, with a common invoice identifiable to both sellers and recipients.

Since its introduction, the processes of calculating GST and filing tax returns with GST has been simplified to encourage small and medium businesses to streamline their operations and finances.

Are You Liable to File GST File Return?

While large businesses have resources at their disposal to manage their tax-related matters, small businesses often don’t have enough resources to maintain adequate accounting information and tax liability. Keeping this in mind, the Income Tax Department has introduced a more straightforward method known as a presumptive method, where your income is calculated as per gross receipts of your business.  

Moreover, small business owners who have turnovers less than Rs. 2 crores and have opted for the presumptive income scheme depicted under Section 44AD, Section 44ADA and Section 44AE, have to file their return through the ITR-4 Form. On the other hand, business owners who have not opted for presumptive income scheme and have profits exceeding Rs 2 crores, will have to file the ITR-3 form.

Also, businesses must provide a record of their expenses, split between payments made out to GST registered and non-registered entities. The turnover/gross receipt as per GST and GSTIN must be reported while filing ITR-4. Further, details of both CGST and SGST/IGST paid on purchases, sales and expenses must be specified under profit and loss account, by business owners who are filing their returns under ITR-3, ITR-5 and ITR-6.

That said, any amount of input tax credit remaining unclaimed as of 31st of current year must be specified under 'Schedule OI' (Other Information) of the relevant ITR form. Overall, any regular business must file one return and two monthly returns. Also, composition dealers and other similar cases have to fill out separate returns. For AY 2019-20, the following tax slab rates are applicable:

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