Understanding GST Return Filing for Smaller Businesses with Turnover Under 1.5 Crore

As a smaller business owner, navigating the realm of Goods and Services Tax (GST) can be overwhelming. Specifically, if your turnover is expected to be less than 1.5 crore, you might wonder if this decision impacts your monthly or quarterly GST return filing obligations. In this article, we will guide you through the essentials and help you make an informed choice.

Option for Quarterly Filing

For businesses with an annual aggregate turnover of up to 1.5 crore (either in the previous financial year or expected in the current financial year), there is the flexibility to opt for quarterly GST return filing. This option is optional; you can choose to file monthly if you prefer. However, it is crucial to understand the implications and considerations associated with this choice.

Currently, the government has proposed a new return format, which includes:

RET-1 – For general returns. RET-2 Sahaj – Specifically for Business-to-Consumer (B2C) supply. RET-3 Sugam – Useful for small taxpayers with a turnover up to 5 crore.

Eligibility and Composition Scheme

The choice between monthly and quarterly filing is also influenced by whether you are eligible and have opted for the Composition Scheme. If you have opted for the Composition Scheme, the GST return is required to be filed on a quarterly basis. If not, you will need to file monthly.

Monthly Filing Obligations

GSTR1 by 11th of the succeeding month GSTR3B by the 20th of the succeeding month

Quarterly Filing Advantages

Choosing to file GST returns quarterly can offer several benefits, especially for businesses with lower turnovers:

Reduced administrative burden due to less frequent filings Easier to manage and allocate resources, as return filing is spread over a longer period Potentially less immediate financial strain on the business, as payments of GST are spread over three months

Government Proposals for Simplified Return Formats

The government has proposed simplified return formats (RET-1, RET-2 Sahaj, RET-3 Sugam) to make the filing process more manageable for small businesses in the 5 crore turnover bracket. These formats are designed to streamline the submission of GST returns:

RET-1 – For general returns. RET-2 Sahaj – Specifically for B2C supply. RET-3 Sugam – Useful for small taxpayers with a turnover up to 5 crore.

Conclusion

Your choice between monthly or quarterly GST return filing, especially when your turnover is below 1.5 crore, depends on various factors, including the nature of your business and your preference for administrative convenience. It is advisable to consult with a tax expert to understand the best options for your specific situation. If you have any further questions or require assistance, feel free to inbox us or contact us via email.

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