In India, registered businesses are required to file GST returns to report their taxable supplies and pay the corresponding taxes. The following are some of the main reasons for filing GST returns
- Legal obligation: GST registration is mandatory for businesses whose turnover exceeds the prescribed limit and once registered, they must file GST returns regularly. Failing to file GST returns can result in penalties and legal consequences.
- Reporting taxable supplies: Businesses are required to report all taxable supplies, including sales and purchases, through the filing of GST returns.
- Calculating GST liability: GST returns are used to calculate the GST liability of a business, which includes the tax due on sales and the input tax credit claimed on purchases.
- Maintaining records: Filing GST returns helps businesses maintain accurate records of their taxable supplies, which can be useful for auditing and tax compliance purposes.
- To claim input tax credit: Businesses can claim input tax credit on eligible purchases by filing GST returns, which helps reduce their overall tax liability.
- Demonstrate compliance: Filing GST returns demonstrates a business's compliance with the tax laws and regulations in India. This can enhance the business's reputation and improve its credibility with customers, suppliers, and government authorities.
- Facilitate tax refunds: In some cases, businesses may be eligible for tax refunds, which can be claimed by filing accurate GST returns.
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