Introduction Of  Returns under Goods and Services Tax and Matching of Input Tax Credit :

A return is a statement of specified particulars relating to business activity undertaken by the taxable person during a prescribed period. Return is a very critical aspect of any tax administration since it is the formal mode for submission of information important for administration of tax in a structured and time bound manner. Return provides a framework for working out the tax that becomes payable in the prescribed period applying the legal principles laid down in the tax law to the transactions during the period. A taxable person has a legal obligation:

(i) to declare his tax liability for a given period in the return;

(ii) furnish details about the taxes paid in accordance with that return; and

(iii) file correct and complete return within stipulated time frame.

The submission and processing of return is an important link between the taxpayer and tax administration as it is an important tool for:

(i) Compliance verification program of tax administration;

(ii) Providing necessary inputs for taking policy decision;

(iii) Management of audit and anti-evasion programs of tax administration;

(iv) (Finalization of the tax liabilities of the taxpayer within stipulated period of limitation.

GST is a self-assessed destination based taxation system. It is a transaction based tax and the unit for calculation of tax liability is individual transaction, both outward as well as inward. This document explains the legal provisions with respect to returns, the underlying principles and the processes involved. Returns in GST are totally electronic without any requirement of physical submission. The effort has been to make it as transaction based as possible so that once the tax payer gives the details of transactions, most part of the return is auto generated from details of underlying individual transactions. There shall be one common return for IGST, CGST and SGST that shall be submitted on the GST Common Portal and tax departments will pull the return data relevant to them from the portal for further processing and analysis.