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Does a proprietor doing export business using GSTIN require to file tax every month or quarterly ?

mack (Thinking-to-start-business) (154 Points)

19 November 2022

As a Sole Proprietorship doing Export Business requires Import & Export Code (IEC) and for that GSTIN is mandatory regardless of turnover.

So my question is, does a proprietor having less or below 50 Lakh profit/earning (not turnover) requires to file GST every month or every quarterly?

Or the filing of tax for a Sole Proprietor even having a GSTIN and filing GST for export business earing require once every year. And frequent filing (monthly or quarterly) only applies to Pvt ltd or legal entity, but not to proprietorship. Correct me if I am wrong.

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9 Replies

CA Raj Doshi (Practising CA) (8924 Points)
Replied 20 November 2022

GST return filing required monthly if Turnover above 5 crores else can opt for quarterly filing irrespective of type of entity viz proprietor or pvt ltd Co.. Practically, due to gst refunds in case of exports, monthly return filing is advisable.

Income Tax in the form of advance tax needs to be paid four times during the year based on estimated income.
Tax Audit is required in case Turnover exceeds 1 crore ( however in case cash Income and expenses are upto 5% of Turnover, then no audit upto 10 crore ). Due date for filing tax audit report is 30th Sept 2023.
The final tax return along with any self assessment tax needs to be filed by 31st July 2023 for FY 2022-23 ( and so on ) in case audit is not applicable.
If audit is applicable, tax return to be filed by 31st October 2023

raj @ rcdco.in

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sabyasachi mukherjee (27574 Points)
Replied 20 November 2022

Filing of gstvreturns is on the basis of nature of dealer. that's the first step.

mack (Thinking-to-start-business) (154 Points)
Replied 23 November 2022

Hello Raj,

I am confused about the second paragraph:-

you have written, "Income Tax in the form of advance tax needs to be paid four times during the year based on estimated income." But what if I don't have enough money and who decides this "Estimated income figure government or me as a proprietor ?"

1) If I am opening a sole proprietorship to run an export business then the entire profit belongs to the individual/Proprietor (Me) and as I am the only member of the proprietorship no other, so either I have to pay GST or only Income tax but not both ?. correct me if my understanding is wrong ?

2) if turnover is less than 1 Crore but holding a GSTIN (as in export it is mandatory to get GSTIN) do I still need to pay GST ?. If No, which means I will be paying only "Income Tax" (not GST) ? . correct me if my understanding is wrong ?

3) and if turnover is more than 1 Crore then I will be only paying GST but not "Income Tax"

Correct me if my understanding is wrong ?

CA Raj Doshi (Practising CA) (8924 Points)
Replied 23 November 2022

You decide the estimated income. If you do profitable business, then you will have some surplus money. Part of the profits will go to the government in form of taxes.

1. You are liable for GST as well as income tax. GST is an indirect tax leviable on sales whereas Income tax is a direct tax levied on profits

2. In your case, since you are only going to do exports so your sales will have zero GST but your purchases will have gst levied. So you will have to apply for GST refund of those paid on purchases

3. GST is applicable from Re. 1 ( there is no exemption in your case as you will be applying voluntarily before operational start of business )

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mack (Thinking-to-start-business) (154 Points)
Replied 28 November 2022

What type of accounts do I need to maintain for GST Audit and Income tax audit ? if I am a Sole Proprietor doing export business (making or purchasing products from India and then selling to other countries either through visiting at that country's trade fair or transporting the product directly to that country's retail shops.)

example : cost A/c, or ledger A/c or P&L + B/S A/c or something else ? I want to know the names of those accounts which are mandatory for the audit report.

"These are the only two type of Audit which are send or upload to MCA portal" or there is 3rd category of audit which is a general transaction not only focused to tax but all sales and purchases and balance sheet ?

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CA Raj Doshi (Practising CA) (8924 Points)
Replied 28 November 2022

Due to the length of queries,please email your contact details on raj @ rcdco.in

We shall be happy to serve you.

Thanks.

mack (Thinking-to-start-business) (154 Points)
Replied 28 November 2022

I have shortened the question, you need to only mention account names. It will be a great help and I will be very thankful. please help me out by answering this question.

CA Raj Doshi (Practising CA) (8924 Points)
Replied 29 November 2022

Books of Accounts - Ledger accounts, Profit and Loss, Balance Sheet.

Only (Income)Tax Audit for Proprietor to be uploaded on income tax portal.

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mack (Thinking-to-start-business) (154 Points)
Replied 29 November 2022

want to clarify on your response:-

"In your case, since you are only going to do exports so your sales will have zero GST but your purchases will have gst levied. So you will have to apply for GST refund of those paid on purchases "

You are saying that "refund on those paid on purchases" but on other post people are telling that for the purchase part you have to pay GST but for the export part (selling) you can claim for a refund. (logically you are telling right because consumption of goods is not happening in India then no GST for Export and GST refund on Paid on purchase )

here is the link to that post where people are telling that on a purchase you have to give and for selling/export you can claim

https://www.caclubindia.com/forum/where-does-igst-applies-for-a-proprietor-doing-export-business--594993.asp

May be I am misunderstanding the entire picture and the reality is that first I will be paying GST on purchase to the seller in India then I will add that GST to my selling price of the product to sell in other countries and that Buyer will pay that GST and then later I will claim that GST as the consumption of goods happens at another country.

Or I will not add the GST portion which I paid on purchase and then sell the product excluding the GST to the other country and then later claim the refund of GST which I paid when I purchase the goods (added in the purchasing price) ?