All about GST ITC-04 Return

All about GST ITC-04 Return
6 min read

GST ITC-04 Return: A Complete Guide

Introduction

India’s indirect tax system has been greatly simplified thanks to the Goods and Services Tax (GST), which has also undergone major tax reform. The possibility for businesses to claim Input Tax Credits (ITC) to offset the taxes they have paid on their purchases is an important feature of the GST. In particular, the GST ITC-04 return focuses on the laborers who are essential to sectors like textiles, gems & jewelry, and vehicle production. The significance of the GST ITC-04 return and its effects on job employees will be discussed in this article.

What is the GST ITC-04 Return?

To provide information about the commodities they provide to job employees and receive back from them, major manufacturers or suppliers must complete the GST ITC-04 return, which is a crucial return. In addition to allowing smooth transactions between the principle and the job worker, this return assures appropriate accounting of products undergoing additional processing or job work and ensures compliance with GST requirements.

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Who Needs to File the GST ITC-04 Return?

Registered taxpayers who engage in manufacturing, trading, or job work activities are required to submit the GST ITC-04 return. This return must be filed by taxpayers who send items for employment or get products back from employment. It is applicable to companies that are GST (Goods and Services Tax) registered in India. The return records important details such as the commodities delivered for work, the goods returned after processing, and any instances of shortages or damage that happened throughout the procedure.

Important Information for the GST ITC-04 Return

The GST ITC-04 return requires the inclusion of the following crucial information:

1. Details of Goods Sent for Job Work: In this part, the goods sent to job workers for processing are described, as well as their quantities and values.

2. Specifics of commodities Returned: This section of the return should list the names, amounts, and values of the commodities that were returned to the job employees after processing.

3. Information on Goods Sent Directly from Job Workers: Job workers occasionally send processed goods to consumers directly. This part includes pertinent information on the supplies created by the job worker.

4. Information on products Lost, Destroyed, or Damaged: The GST ITC-04 return must include information on any products that were lost, destroyed, or damaged as well as the causes of the loss or damage.

The Procedure for Filing the GST ITC-04 Return

Filing the GST ITC-04 return involves the following steps:

1. Log in to the GST Portal: Go to the GST Portal’s official website (www.gst.gov.in) and enter your login information (GSTIN and password).

2. Find the Returns Dashboard: After signing in, select “Returns” from the section drop-down menu and then “Returns Dashboard.”

3. Choose the GST ITC-04 Return: Locate and choose the GST ITC-04 return from the list of available returns.

4. Fill in the Details: Complete the return form with the necessary information. Information about the items that were sent for job work, received for job work, and kept in stock on behalf of others is included in this. Make sure the quantity and value of the goods are filled accurately.

5. Verify and submit the return: Verify that all required fields have been correctly filled out before submitting the return. Correct any mistakes or discrepancies before continuing. Submit the return on the GST portal after it has been validated.

6. Confirmation and Acknowledgement: A confirmation message will be shown on the portal following the submission of the return. For future use, a specific acknowledgment number will be generated.

7. Submit GSTR-2A Reconciliation: Reconciling the information provided in the GST ITC-04 return with the purchase-related information found in GSTR-2A is advised. This makes it easier to find any errors or incompatibilities and fix them before to the filing deadline.

8. Pay Any Applicable Tax: Make the payment using the authorized mode of payment on the GST site if there is any tax due or input tax credit (ITC) reversal resulting from the GST ITC-04 return. Create the challan, then make the appropriate payment.

9. Keep Copies: For your records and future use, keep copies of the filed return, acknowledgment number, and payment receipt.

It is crucial to submit the GST ITC-04 return before the deadline in order to comply with GST requirements and avoid fines. For comprehensive instructions and precise requirements, it is advised to seek the advice of a tax expert or to examine the official GST guidelines.

Consequences of Non-filing or Incorrect Filing

Businesses may suffer negative effects if their GST ITC-04 returns are not filed or are filed incorrectly:

1. Penalties and Interest: In accordance with GST legislation, failure to file the return or the submission of inaccurate information may result in penalties and interest. These fines may be severe and have a negative effect on a company’s bottom line.

2. Loss of Input Tax Credit: Input tax credits claimed on goods sent for employment work may be denied if paperwork is incomplete or submitted incorrectly. This may lower the company’s ability to compete in the market and raise its tax obligations.

Conclusion

The proper operation of the job work sector is greatly dependent on the GST ITC-04 return. It helps main producers or suppliers to keep accurate records and submit claims for input tax credits on products delivered for employment. Businesses can reconcile their input tax credit, adhere to GST rules, and support a fair and accountable tax system by appropriately filing the GST ITC-04 return.

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Ishita Ramani 2
EbizFiling.com is a motivated and progressive concept conceived by like –minded people, which helps small, medium and large businesses to fulfill all compliance...
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