GST RETURN FILLING PROCEDURE AND RULES AND FORMATS-GSTR 1/ GSTR 2/ GSTR 2B/ GSTR 2A / GSTR 3

 

GST RETURN FILLING PROCEDURE AND RULES AND FORMATS

GSTR-1

 

Latest Updates on GSTR-1

29th August 2021
Company taxpayers can continue filing GSTR-1 and GSTR-3B using EVC or DSC up to 31st October 2021 via the CGST notification number 32/2021 dated 29th August 2021.

26th August 2021
From 1st September 2021, taxpayers will not be able to file GSTR-1 or use the IFF for August 2021 on the GST portal if they have pending GSTR-3B filings. It applies if GSTR-3B is pending for the past two months till July 2021 (monthly filer) or for the last quarter ending 30th June 2021 (quarterly filer) as per CGST Rule 59(6).


28th May 2021
The GST Council recommended in its 43rd meeting the following: 
(1) The monthly filing of GSTR-1 for May 2021 will be extended from 11th June 2021 to 26th June 2021.
(2) Filing of B2B sales invoices in IFF by QRMP taxpayers for May 2021 is extended from 13th June 2021 to 28th June 2021.
(3) Companies that are GST taxpayers have been given permission to authenticate returns using EVC instead of digital signature up to 31st August 2021.

(4) Late fee has been rationalised for future tax periods as follows:
(i) If the annual turnover in the previous financial year is up to Rs.1.5 crore then the late fee of a maximum of Rs.2,000 per return can only be charged (i.e Rs.1000 each for CGST and SGST).
(ii) If the turnover ranges between Rs.1.5 crore and Rs.5 crore then the maximum late fee of Rs.5,000 per return can only be charged (i.e Rs. 2500 each for CGST and SGST).
(iii) If the turnover is more than Rs.5 crore then a late fee of a maximum of Rs.10,000 (i.e Rs. 5000 per CGST and SGST) can be charged.


1st May 2021
(1) The due date to file GSTR-1 for April 2021 is extended from 11th May 2021 to 26th May 2021.
(2) The time limit to furnish B2B supplies on the IFF (optional facility), for April 2021 has been extended from 13th May to 28th May 2021.

9th January 2021
If a taxpayer with an annual aggregate turnover of Rs.5 crore does not opt into the QRMP scheme, he will be considered as a monthly filer of GSTR-1 and GSTR-3B from the January 2021 tax period onwards. Hence the due date for GSTR-1 shall be the 11th of next month and GSTR-3B shall be the 20th of next month.

Basics of GSTR-1

What is GSTR-1?

GSTR-1 is a monthly or quarterly return that should be filed by every registered GST taxpayer, except a few as given in further sections. It contains details of all outward supplies i.e sales. The return has a total of 13 sections, listed down as follows:

Tables 1, 2 & 3: GSTIN, legal and trade names, and aggregate turnover in the previous year

Table 4: Taxable outward supplies to registered persons (including UIN-holders) excluding zero-rated supplies and deemed exports

Table 5: Taxable outward inter-state supplies to unregistered persons where the invoice value is more than Rs.2.5 lakh

Table 6: Zero-rated supplies as well as deemed exports

Table 7: Taxable supplies to unregistered persons other than the supplies covered in table 5 (net of debit notes and credit notes)

Table 8: Outward supplies that are nil rated, exempted and non-GST in nature

Table 9: Amendments to outward supplies that are taxable and reported in table 4,5 & 6 of the earlier tax periods’ GSTR-1 return (including debit notes, credit notes, refund vouchers issued during the current period)

Table 10: Debit note and credit note issued to unregistered person

Table 11: Details of advances received or adjusted in the current tax period or amendments of the information reported in the earlier tax period.

Table 12: Outward supplies summary based on HSN codes

Table 13: Documents issued during the period.

When is GSTR-1 due?

The due dates for GSTR-1 are based on your turnover. Businesses with sales of up to Rs.5 crore have an option to file quarterly returns under the QRMP scheme and are due by 13th of the month following the relevant quarter. 

Whereas, those taxpayers who do not opt for the QRMP scheme or have total turnover above Rs.5 crore must file the return every month on or before 11th of the next month.

For businesses with turnover	Month/Quarter	Due Date
More than Rs.5 crore*	January 2021	11th February 2021
	February 2021	11th March 2021
	March 2021	11th April 2021
	April 2021	26th May 2021**
	May 2021	26th June 2021**
	June 2021	11th July 2021
Turnover up to Rs.5 crore	Jan-Mar 2021	13th April 2021***
	Apr-June 2021	13th July 2021***

*Upto December 2020 and until QRMP scheme was introduced, the turnover limit was Rs.1.5 crore

*Upto December 2020 and until QRMP scheme was introduced, the turnover limit was Rs.1.5 crore.

**Vide CGST Notification no. 12/2021 dated 1st May 2021 and CGST Notification no. 17/2021 dated 1st June 2021.

***Up to September 2020, quarterly GSTR-1 was due by the last date of the month following the relevant quarter up to September 2020.

Who should file GSTR-1?

Every registered person is required to file GSTR-1 irrespective of whether there are any transactions during the period or not. For nil GSTR-1 filers, there is a facility to file through an SMS that began from the 1st week of July 2020. The following registered persons are exempt from filing the GSTR-1:

Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)

How to revise GSTR-1?

A return once filed cannot be revised. Any mistake made in the return can be rectified in the GSTR-1 filed for the next period (month/quarter). It means that if a mistake is made in GSTR-1 of June 2021, rectification for the same can be made in the GSTR-1 of July 2021.

Late Fees and Penalty

As per the GST law, a late fee for not filing GSTR-1 is Rs. 200 per day of delay (Rs. 100 as per the CGST Act and Rs. 100 as per SGST Act). The late fee will be charged from the date after the due date.

However, after going through the notifications issued up to February 2021, the late fees continue to be levied at a reduced fee of Rs. 50 per day and Rs 20 per day (for nil return). Note that on the GST portal, the late fee on GSTR-1 is currently not being demanded as a part of payment challan in PMT-06 at the time of filing GSTR-3B. 

As per CGST notification 20/2021 dated 1st June 2021, the maximum late fee chargeable from the period of June 2021 onwards. 

Registered persons having no outward supplies in the tax period are liable to a maximum late fee of Rs.500 (Rs.250 per Act). Whereas, registered persons having a total turnover of up to Rs.1.5 crore in the preceding financial year, other than the nil filers are liable to a maximum late fee of Rs.2,000 (Rs.1,000 per Act). On the other hand, the registered persons having an aggregate annual turnover of more than Rs.1.5 crore but up to Rs.5 crore in the preceding financial year, other than the nil filers can be charged a maximum late fee of Rs. 5,000 (Rs.2,500 per Act). There is no change in maximum late fee for taxpayers with total turnover more than Rs.5 crore and it remains Rs.10,000.

However, the tax officer may raise a notice demanding late fee for the period of delay at the time of assessment of returns.

GSTR 2

 

GSTR-2 is a monthly return that allows the taxpayer to declare and summarise the details of inward purchases of taxable goods and/or services. 

However, the GSTR-2 form is currently suspended since September 2017 through amendment to the CGST Rules. In its place, GSTR-3B which is a return in a combined version of GSTR-2 and GSTR-3, is in use. For details about GSTR-3B, read our article “All about GSTR-3B return”

Latest updates on GSTR-2A

28th May 2021
CGST Rule 36(4) to cumulatively apply for April, May and June 2021 while filing GSTR-3B of June 2021.

1st May 2021
The CGST Rule 36(4) restricting provisional ITC claims to 5% of GSTR-2B in GSTR-3B is relaxed for April 2021. The taxpayer can apply this rule cumulatively for both April and May while GSTR-3B for May 2021.

1st February 2021
Budget 2021 update: Section 16 amended to allow taxpayers’ claim of the input tax credit based on GSTR-2A and GSTR-2B. Henceforth, the input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.

15th July 2020
The taxpayers must henceforth use GSTR-2B instead of GSTR-2A from the tax period of August 2020 onwards, for ITC claims in GSTR-3B.

3rd April 2020
The CBIC has notified that taxpayers can claim input tax credit in the GSTR-3B return from February 2020 to August 2020, without applying the rule of capping provisional ITC claims at 10% of the eligible ITC as per GSTR-2A.

While filing the GSTR-3B of September 2020, the taxpayers must cumulatively adjust ITC as per the above rule from February 2020.

 you can also read GSTR 4 guide 

About GSTR-2 and its importance

Until August 2017, every registered taxable person under GST was required to give details of inward supplies, i.e., purchases and Input Tax Credit (ITC) for every tax period in the form GSTR-2.

GSTR-2 contains details of all the purchases transactions of a registered dealer for a month. It also includes purchases on which reverse charge applies. The GSTR-2 filed by a registered dealer would have been used by the government to check with the sellers’ GSTR-1 for buyer-seller reconciliation.

However, since it is currently not in use from September 2017 tax period onwards, it has lost its significance. Instead, the taxpayers must report their eligible ITC in the form GSTR-3B while checking with their GSTR-2B and GSTR-2A.

What is buyer-seller reconciliation?

Buyer-seller reconciliation or invoice matching or is a process of matching taxable sales by the seller with the taxable purchases of the buyer.  It is vital because ITC on purchases will only be available if the details of purchases filed in GSTR-2 (currently in GSTR-3B) return of buyer matches with the details of sales filed in GSTR-1 of their seller. 

For example, Ajay buys 100 pens worth Rs. 500 from Vijay Stationery. Vijay Stationery must show Rs. 500 sales in his GSTR-1. Ajay must show the same Rs. 500 purchase in GSTR-2 (currently GSTR-3B) to claim ITC. Unless the amounts match, Ajay will not be able to claim ITC. 

At present, this reconciliation or matching is done between GSTR-2B and GSTR-3B. Sometimes, the taxpayer may have to refer to the GSTR-2A.

Most of the headings under GSTR-2 are auto-populated from counterparties’ GSTR-1, so it would have involved minimal time.  

also read

Prerequisites to file GSTR-5

When was GSTR 2 due for a month?

As per the Act, the due date for filing GSTR-2 is 15th of next month. There was a 5-day gap between GSTR-1 & GSTR-2 filing given to correct any errors and discrepancies. However, the due date for businesses filing returns on a quarterly basis was never announced. 

What happened if GSTR-2 was not filed?

If GSTR-2 return is not filed then the next return in form GSTR-3 (currently GSTR-3B) could not have been filed. Hence, late filing of GST returns have a cascading effect leading to heavy fines and penalty.

However, currently GSTR-2 and GSTR-3 both are suspended since September 2017.

If one delays the filing, he/she would have been liable to pay interest and a late fee. Interest is 18% per annum. It had to be calculated by the taxpayer on the amount of outstanding tax to be paid. The time period was from the next day of filing (16th of the next month) up to the date of payment. The late fee would have been Rs. 100 per day per Act. So, it is Rs.100 under CGST & Rs.100 under SGST. Total will be Rs. 200/day. The maximum is Rs. 5,000.There is no late fee for IGST. 

Who should file GSTR-2?

Every registered person was required to file GSTR-2 irrespective of whether there are any transactions during the month or not. However, these registered persons do not have to file GSTR 2 as per GST law –

also read how to file gstr 7

Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)

How to revise GSTR 2?

GSTR 2 once filed cannot be revised. Any mistake made in the return can be revised in the next month’s return. It means that if a mistake is made in GSTR 2 of July 2017, rectification for the same can be made in the GSTR 2 of August 2017.

What is GSTR-2A?

When a seller files his GSTR-1, the information is captured in GSTR-2A. GSTR-2A is a purchase-related tax return that is automatically generated for each business by the GST portal. It takes information from every seller’s GSTR-1 for a particular buyer registered under GST. The return is dynamic in nature and can vary with changes or revisions done by sellers in later tax periods. So, GSTR-2B return was introduced.

What is GSTR-2B? 

GSTR-2B is a new static auto-drafted statement for regular taxpayers. It is available month wise and was introduced on the GST portal from the August 2020 tax period onwards. The details of ITC in this return does not get altered for a particular tax period, even if the seller makes revisions. Hence, the taxpayers can refer to the ITC appearing in this return for eligible ITC claims in GSTR-3B for a tax period.

Contents of the form GSTR-2

There are 13 headings in GSTR-2 format prescribed by the government.  Each heading is explained here along with the details required to be reported under GSTR-2. 

1.GSTIN – Each taxpayer will be allotted a state-wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). A format of proposed GSTIN has been shown in the image below. GSTIN of the taxpayer will be auto-populated at the time of return filing.

2.Name of the Taxpayer – Name of the taxpayer including legal and trade name (will be auto-populated)Month, Year – Mention the relevant month and year for which GSTR-2 is being filed.

 

3.Inward Supplies from Registered Taxable Person – Most of the purchases from a registered person will be auto-populated here from GSTR-1 filed by the seller. It will have all details of type, rate and amount of GST, whether ITC is eligible, amount of ITC. However, it will not contain purchases under reverse charge

 

Certain transactions may not be auto-populated because-

Seller did not file GSTR-1

Seller filed GSTR-1 but he missed the transaction

In either case, the buyer can manually add these transactions. The seller will get a notification to accept this addition/modification in his GSTR-1A return. If the supply is received in more than one lot, the invoice must be reported in the return of the month in which the last lot is received and recorded in books of accounts.

4.Inward supplies on which tax is to be paid on reverse charge –

Certain goods and services attract reverse charge, i.e., the buyer is liable to pay GST. A registered dealer purchasing more than Rs. 5,000 per day from an unregistered dealer is liable to pay reverse charge. All purchases on which reverse charge applies, will be reported in this part. 

 

4A.  Under this head, all purchases on which reverse charge specifically applies by law must be mentioned. For example, purchasing cashew nuts from an agriculturist. 4B. This head will list the purchases from unregistered dealers which exceed Rs. 5,000 per day from an unregistered dealer 4C. Under this head, reverse charge GST paid on import of service will be reported.

5.Inputs/Capital goods received from Overseas or from SEZ units on a Bill of Entry –

Any kind of import of inputs (items used to manufacture finished goods) or capital goods received against a Bill of Entry must be reported under this head. Goods received from SEZ are also reported here.

5A. Imports: Any kind of import of inputs (items used to manufacture finished goods) or capital goods received against a Bill of Entry will be reported here. Details of bills of entry, along with 6-digit port codes and 7-digit bill numbers must be mentioned.

5B. Received from SEZ: Inputs or capital goods received from sellers in a SEZ will be reported here. 

 

6.Amendments to details of inward supplies furnished in returns for earlier tax periods in Tables 3, 4 and 5 [including debit notes/credit notes issued and their subsequent amendments] –

A taxpayer cannot revise any GST return once it is filed. Revision is possible only in the next month’s return under this heading. The taxpayer can amend any detail of purchases of goods/services in earlier months. This information can be filled manually. Subsequently, the seller will also get a notification regarding this modification. The seller needs to accept this change in his GSTR-1A return. 

6A. This head will contain all revisions of input goods/services (except imports) 

6B. Any change in amount/tax calculated on imported goods and goods from SEZ can be made under this heading. Here, the taxpayer must mention the changes made in the bill of Entry / Import Report. 

6C. The taxpayer must report all debit and credit notes issued with respect to purchases. Any debit/credit note issued under reverse charge mechanism will get auto-populated here from counter-party GSTR-1 and other applicable returns (eg. GSTR-5 filed by NR). 

6D. Any changes in debit /credit note of previous months will be reported under this heading.

 

7.Supplies received from composition taxable person and other exempt/Nil rated/Non-GST supplies received –

 

This head will include purchases from composition dealers and other exempt/nil/non-GST supplies. Non-GST supplies include items like petrol, diesel which are not covered under GST. Also, both inter-state and intra-state supplies need to be reported here.

8.ISD credit received –

 

Details of the input tax credit received from a registered Input Service Distributor (ISD) (usually a head office which has transferred its ITC to all its branches). This data will be auto-populated from GSTR-6 filed by ISD.

9.TDS and TCS Credit received –

TDS Credit Received – This section will only be applicable in case you engage in specified contracts with specified persons (usually government bodies). The receiver (government) will deduct a certain percentage of transaction value as Tax Deduction at Source. All information will get auto-populated here from GSTR-7 filed by the deductor. 

TCS Credit Received – This heading is applicable for only online sellers registered with e-commerce operator. E-commerce operator is required to collect tax at source at the time of making payment to such sellers. This information will again be auto-populated from GSTR-8 of e-commerce operators. 

10.Consolidated Statement of Advances paid/Advance adjusted on account of receipt of supply –

Any advance payment made during the month will appear here. If you paid advance tax on goods or services received during an earlier tax period, but only received the invoices this month, declare the details here. Advance receipts issued under reverse charge are also covered here. 

Normally the seller issues an advance receipt when he receives any advance payment. In case of purchases attracting reverse charge, the buyer must issue the advance receipt if he pays in advance. 

Part I –

This part will cover the advance amount paid for reverse charge supplies in the current month.

It will also include the advances paid in earlier months against which invoices have been received in current month.

The purchases will be broken up into inter-state and intra-state.

 

Part II will contain changes to above part I in relation to an earlier month.

11.Input Tax Credit Reversal / Reclaim –

ITC can be availed only on goods and services for business purposes. If they are used for non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed. In this heading, the taxpayer must fill in details of ITC that cannot be claimed during the month due to various ITC rules.  

11A. This head will cover all input tax reversal for the current month. It will also include ITC reversal on account of exempt and personal supplies. 

a. Amount in terms of rule 37(2)– ITC will be reversed for invoices which were not paid within 180 days of issue.

b. Amount in terms of rule 39(1)(j)(ii)– This is for ISDs. If a credit note was issued by the seller to the HO then the ITC subsequently reduced will be reversed.

c. Amount in terms of rule 42(1)(m)– This is for businesses which use inputs for both business and non-business (personal) purposes. ITC used in the portion of input goods/services used for personal purpose must be reversed proportionately.

d. Amount in terms of rule 43(1)(h)– This is similar to above except that it concerns capital goods.

e. Amount in terms of rule 42 (2)(a)– This is calculated after the annual return is furnished. If total ITC on inputs of exempted/non-business purpose is more than the ITC actually reversed during the year then the difference amount will be added to output liability. Interest will be applicable.

f. Amount in terms of rule 42(2)(b)– This is the opposite of the above. If total ITC on inputs of exempted/non-business purpose is less than the ITC actually reversed during the year then the difference amount can be reclaimed as ITC.

Read our article on  Input Tax Credit to understand this in detail.

 

11B. The taxpayer can manually amend any details of ITC under 11A of earlier months. He will select the appropriate information from a drop-down menu.

12.Addition and reduction of amount of output tax for mismatch and other reasons –

This section will capture any additional tax liability that can arise due to the corrections made to the GSTR-3 of the previous month.

a) ITC claimed on mismatched/duplication of invoices/debit notes: In case mismatch of invoices, there may be double claiming of ITC. The excess ITC claimed from duplicate purchase invoices will be reversed and added to the tax liability.

b) Tax liability on mismatched credit notes: Incorrect credit notes issued by the taxpayer will also result in incorrect ITC. Extra ITC claimed due to mismatch will now be added to your tax liability.

c) Reclaim on account of rectification of mismatched invoices/debit notes: This is the opposite of point (a). In this case, the mismatch has led to claiming lower ITC. You are entitled to more ITC and so the additional amount will be reduced from the output tax liability.

d) Reclaim on account of rectification of mismatched credit note (Reduce): This is opposite to (b), i.e., lower ITC has been claimed and will work in the same way as (c).

e) Negative tax liability from previous tax periods:This is due to excess tax paid during the previous months and will be reduced from output tax liability of this month.

f) Tax paid in advance in earlier tax periods and adjusted with tax on supplies made in the current tax period (Reduce): This refers to tax paid along with advance payments in earlier months for supplies received during this month.

 

13.HSN summary of inward supplies – This section requires a registered dealer to provide HSN wise summary of goods purchased. It will be entered by the taxpayer.Finally, sign off with a declaration that all information has been declared and is correct.

GSTR 3

 

29th August 2021
1) Time limit to avail GST Amnesty Scheme extended up to 30th November 2021. It continues to apply for GSTR-3B from July 2017 up to April 2021 via CGST notification number 33/2021 dated 29th August 2021.
2) Taxpayers can get extended time up to 30th September 2021 to revoke cancelled GST registration if the last date for the same falls between 1st March 2020 and 31st August 2021. It applies if the GST registration is cancelled under Section 29(2) clause (b) or (c) of the CGST Act via CGST notification number 34/2021 dated 29th August 2021.
3) Company taxpayers can continue filing GSTR-1 and GSTR-3B using EVC or DSC up to 31st October 2021 via the CGST notification number 32/2021 dated 29th August 2021.

26th August 2021
From 1st September 2021, taxpayers will not be able to file GSTR-1 or use the IFF for August 2021 on the GST portal if they have pending GSTR-3B filings. It applies if GSTR-3B is pending for the past two months till July 2021 (monthly filer) or for the last quarter ending 30th June 2021 (quarterly filer), as per CGST Rule 59(6).

28th May 2021
The GST Council recommended in its 43rd meeting the following:
1) The much-awaited GST amnesty scheme was given a go-ahead. As per the announcement, those taxpayers who haven’t filed GSTR-3B for any earlier tax periods between July 2017 to April 2021 can file now between 1st June 2021 up to 31st August 2021 with a reduced maximum late fee as follows:
(a) Maximum late fee has been capped at a maximum of Rs 500 per return (i.e Rs. 250/- each for CGST & SGST) in case of nil GSTR-3B filing
(b) Maximum late fee is Rs 1000 per return ( i.e Rs. 500/- each for CGST & SGST) for other taxpayers
2) Late fee has been rationalised for future tax periods in case of GSTR-3B, as follows:
(a) In case of nil GSTR-3B filing, the maximum late fee charged shall be capped at Rs.500 per return (i.e Rs. 250/- each for CGST & SGST).
(b) In GSTR-1 and GSTR-3B other than nil filing, maximum late fee is fixed based on annual turnover slab, as follows:
(i) If the annual turnover in the previous financial year is upto Rs.1.5 crore then the late fee of maximum Rs 2,000 per return can only be charged (i.e Rs.1000 each for CGST and SGST).
(ii) If the turnover ranges between Rs.1.5 crore and Rs.5 crore then the maximum late fee of Rs.5,000 per return can only be charged (i.e Rs. 2500 each for CGST and SGST).
(iii) If the turnover is more than Rs.5 crore then late fee of maximum Rs.10,000 (i.e Rs. 5000 per CGST and SGST) can be charged.
3) Rule 36(4) of the CGST Rules will apply cumulatively from April to June 2021 while filing GSTR-3B for the tax period of June 2021. It means that one can provisionally claim ITC even if it does not appear in GSTR-2B in their GSTR-3B for April 2021 and May 2021.
4) Companies that are GST taxpayers have been given permission to authenticate returns using EVC instead of digital signature up to 31st August 2021.
5) The interest and late fee relief has been extended for a further period. 

1st May 2021
(1) The CGST Rule 36(4) restricting provisional ITC claims to 5% of GSTR-2B in GSTR-3B is relaxed for April 2021. The taxpayer can apply this rule cumulatively for both April and May while GSTR-3B for May 2021.

(2) The interest and late fee charged for late filing of GSTR-3B have been relaxed as follows:
(a) Turnover is more than Rs.5 crore in the preceding financial year and GSTR-3B is filed on a monthly basis, interest and late fee are relaxed/waived off for April and May 2021 (Due date: 20th May or 20th June) as follows:
Interest reduced to 9% for filing on or before 5th May (4th June), but charged at 18% thereafter. No late fee up to 5th May (4th June).

(b) Turnover is up to Rs.5 crore in the preceding financial year and GSTR-3B is filed on a monthly basis, interest and late fee are relaxed/waived off for April and May 2021 (Due date: 20th May or 20th June) as follows:
No interest for filing on or before 5th May (4th June), interest reduced to 9% for filing between 6th May (5th June) and 20th May (19th June), but charged at 18% thereafter. No late fee up to 20th May (19th June).

(c) Turnover is up to Rs.5 crore in the preceding financial year and GSTR-3B is filed on a quarterly basis, interest and late fee are relaxed/waived off for Jan-Mar 2021 (Due date: 22nd/24th April) as follows:
No interest for filing on or before 7th May (9th May), interest reduced to 9% between 8th May (10th May) and 21st May (23rd May), but charged at 18% thereafter. No late fee up to 21st May (23rd May).

What is GSTR3?

GSTR-3 is a monthly return with the summarized details of sales, purchases, sales during the month along with the amount of GST liability. This return is auto-generated pulling information from GSTR-1 and GSTR-2.

Why is GSTR-3 important?

GSTR-3 will show the amount of GST liability for the month. The taxpayer must pay the tax and file the return.

What happens if GSTR-3 is not filed?

If GSTR-3 return is not filed then the GSTR-1 of the next month cannot be filed.  Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty.

What happens if GSTR-3 is filed late?

If you delay in filing, you will be liable to pay interest and a late fee.Interest is 18% per annum. It has to be calculated by the tax payer on the amount of outstanding tax to be paid. Time period will be from the next day of filing (16th of the month) to the date of payment. Late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. Maximum is Rs. 5,000.There is no late fee on IGST.

Who should file GSTR-3?

Every registered person is required to file GSTR-3 irrespective of whether there are any transactions during the month or not.However, these registered persons do not have to file GSTR-3–

Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)

How to revise GSTR-3?

GSTR-3 once filed cannot be revised. Any mistake made in the return can be revised in the next month’s GSTR-1 and GSTR-2 returns. Direct revision in GSTR-3 is not possible as GSTR-3 is auto-generated without provision for editing.

How will GSTR-3 and GSTR-3B be reconciled?

GSTR 3B is a simple return form introduced by the CBEC for the month of July and August 2017. GSTR-3 will also have to be filed for July & August 2017.On filing the GSTR 3, if actual liabilities are different from those declared in GSTR 3B, the system will update the (difference) between GSTR 3B and GSTR 3 automatically. In case, actual liabilities in GSTR-3 are higher than those declared and paid with GSTR-3B, you will have to pay the extra amount tax along with interest on the extra amount.

Note: GSTR-3 must be filed only after paying entire tax liability otherwise it will not be treated as valid return.If taxpayer has filed an invalid return and later on he wants to pay the remaining liability then he has to file the Part B of GSTR-3 again.

Details to be provided in GSTR-3

There are 15 headings in GSTR-3 format prescribed by the government.  We have explained each heading along with the details required to be reported under GSTR-3.

1. Provide GSTIN 

Provisional id can also be used as GSTIN if you do not have a GSTIN

2. Name of the Taxpayer

Name of the taxpayer including legal and trade name (will be auto-populated)

Month, Year – Mention the relevant month and year for which GSTR-3 is being filed.

There are 2 parts of GSTR-3. Part A is auto-populated from GSTR-1, GSTR-1A & GSTR-2 and Part B must be filled up manually.

PART A (entirely auto-populated)

3. Turnover

This heaindg will include total turnover of all types of supplies. Total turnover will be bifurcated between:

Taxable Turnover [other than zero rated]: This includes the normal sales to both registered and unregistered buyers.

Zero rated supply on payment of tax: This will include exports which are paid by paying IGST (later reclaimed as refund)

Zero rated supply without payment of tax: This will include exports which are paid with bond/LUT.

Deemed exports: These are items sold to SEZ (the goods do not actually leave the country)

Exempted: These are goods/services which do not attract GST.

Nil Rated: These are goods/services which attract 0% GST.

Non-GST supply: These are items like petrol, electricity which are outside the scope of GST.

 

4. Outward supplies

This heading will contain summary of all your sales during the month. The information will be pulled automatically from your GSTR-1.

4.1 Inter-State supplies (Net Supply for the month)

This heading will contain all inter-state sales with the following details

A. Taxable supplies (other than reverse charge and zero-rated supply) [Tax Rate Wise]: Total sales except on those on which reverse charge applies and exports

B. Supplies attracting reverse charge-tax payable by recipient of supply: These are sales on which your buyer will pay GST under reverse charge

C. Zero rated supply made with payment of IGST: These are exports which are paid by paying IGST (later reclaimed as refund)

D. Out of the supplies mentioned at A, the value of supplies made though an e-commerce operator attracting TCS-[Rate wise]: This will contain the portion of sales made through e-commerce (point A has the total sales including e-commerce sales). GSTIN of e-commerce operator will also be displayed.Note:

Zero rated supplies made without payment of taxes, i.e., exports through bond/LUT will not be included.

Amendments of supplies originally made under reverse charge basis will not be included in Table 4.

 

4.2 Intra-State supplies (Net supply for the month)

This is similar to above heading except that this will contain details of intra-state sales.

 

4.3 Tax effect of amendments made in respect of outward supplies

This will contain the changes made to your sales invoice. If the amount is changed, the amount of ITC to claim also changes which impacts the tax payable to the government. It may result in excess or under payment. The information under this heading helps to keep track of invoices on which changes have been made and the impact of the change on the tax amount.

 

Inward supplies attracting reverse charge including import of services (Net of advance adjustments)

This heading will contain your purchases during the month and supplies you received during this month. The information will be pulled automatically from your using the data that you have recorded under the GSTR-2.

5A. Inward supplies on which tax is payable on reverse charge basis:

This includes your purchases where reverse charge is applicable (you the buyer will pay GST). Both inter-state and intra-state sales appear here. Tax liability due to reverse charge is net of invoices, debit/credit notes, advances paid and adjustments of advances

5B. Tax effect of amendments in respect of supplies attracting reverse charge:

This will contain the changes made to your purchases which attract reverse charge. If the amount is changed, the amount of ITC also changes which changes the tax payable. It may result in excess or under payment. The information under this heading helps to keep track of invoices on which changes have been made and the impact of the change on the tax amount.

 

6. Input tax credit

ITC on inward taxable supplies, including imports and ITC received from ISD [Net of debit notes/credit notes]

Part I

This heading will have a summary of ITC available to you during the month. ITC will be shown separately for:

Inputs– Your raw materials

Input Services– Such as consulting fees

Capital Goods– Such as laptop

ITC received from Input Service Distributor (ISD) will also be shown here. All ITC will be shown after adjusting debit/credit notes.

Part II

This part will contain changes made to earlier month’s details and their effect on ITC.

 

7. Addition and reduction of amount in output tax for mismatch and other reasons

This heading will contain the mismatches in ITC and tax liability between the original returns and any changes filed during the current month. This information will be sourced from GSTR-2.

a. ITC claimed on mismatched or duplication of invoices or debit notes:  In case mismatch of invoices, there may be double claiming of ITC. The excess ITC claimed from duplicate purchase invoices will be reversed and added to the tax liability.

b. Tax liability on mismatched credit notes: Incorrect credit notes issued by you will also result in incorrect ITC. Extra ITC claimed due to mismatch will now be added to your tax liability.

c. Reclaim on rectification of mismatched invoices/Debit Notes: This is the opposite of point (a). In this case, mismatch has led to claiming lower ITC. You are entitled to more ITC and so the additional amount will be reduced from the output tax liability.

d. Reclaim on rectification of mismatch credit note: (Reduce): This is opposite to (b), i.e., lower ITC has been claimed and will work in the same way as (c).

e. Negative tax liability from previous tax periods: This is due to excess tax paid during the previous months and will be reduced from output tax liability of this month.

f. Tax paid on advance in earlier tax periods and adjusted with tax on supplies made in current tax period. This refers to tax paid along with advance payments in earlier months for supplies received during this month.

g. Input Tax credit reversal/reclaim: This refers to ITC being reversed or reclaimed due to any other reason.

 

8. Total tax liability

This is the main portion as GST Portal will calculate your tax liability here under different tax heads of CGST, SGST & IGST It will show the following breakup:-

8A. On outward supplies: This is tax payable on your normal sales including inter-state sales.

8B. On inward supplies under reverse charge: This is the tax payable on purchases attracting reverse charge.

8C. On account of ITC reversal or reclaim: This is the additional tax payable/or reduction available due to ITC reversal or reclaim. The information flows from Table 11 of GSTR-2.

8D. On account of mismatch/ rectification /other reasons: This will include tax liability due to any other reason.

 

9. Credit of TDS and TCS

This heading will contain the details of TDS and TCS paid by you. The amounts of TDS/TCS will be deducted from the total liability to arrive at net tax amount you must pay.

 

10. Interest liability (Interest as on ..)

Interest is applicable on delay of payment. Interest is 18% per annum. It has to be calculated by the tax payer on the amount of outstanding tax to be paid. Time period will be from the next day of filing (20th of the month) to the date of payment.This heading shows the reason and the amount of interest applicable. Breakup into CGST, SGST, IGST & Cess will be given.

Output liability on mismatch: Your tax liability has increased due to change in sales invoice and you must pay interest on the increased amount

ITC claimed on mismatch invoice: Your tax liability has increased due to a change in purchase invoice and ITC was claimed on such invoice. You must pay interest on the increased amount.

On account of other ITC reversal: Your ITC claimed was reversed which has increased your tax liability and so interest is payable.

Undue excess claims or excess reduction [refer sec 50(3)]: You have claimed extra ITC and now you are required to pay interest

Credit of interest on rectification of mismatch: You had paid interest on mismatch and now the interest is reversed or credited back.

Interest liability carry forward: You had an interest liability which you have paid partly. The balance amount will be carried forward.

Delay in payment of tax: This is due to late payment/ late filing of return.

Total interest liability: Finally, it will show the total interest payable under CGST, SGST & IGST.

 

11. Late Fee

A late fee is alco applicable along with interest on delayed return filing. Late fee is Rs. 100 per day. Maximum is Rs. 5,000.

 

Note: There is no late fee for IGST.

Part B

This part will be filled up by the taxpayer. The Part A is shown automatically by the GST Portal

12. Tax payable and paid

You will fill up the appropriate columns with the appropriate amounts.For example, if you have a tax liability of Rs. 30,000 and ITC of Rs. 10,000, you can opt to pay Rs. 20,000 in cash (fill up col 3) and Rs. 10,000 through ITC (fill up the appropriate columns under 4,5,6.

Remember to follow the ITC claim rules.

 

13. Interest, Late Fee and any other amount (other than tax) payable and paid

Here, you will fill in the amount payable and the amount paid under interest, late fee with the breakup of tax heads.Note: There is no late fee for IGST.

 

14. Refund claimed from Electronic cash ledger

If it is found that the tax paid is higher than the actual amount then the difference will be refunded to you. Note:

Refund from cash ledger can only be claimed only when all return related liabilities for the month have been discharged.

Refund claimed Table 14 will result in a debit entry in electronic cash ledger on filing of valid GSTR 3.

 

15. Debit entries in electronic cash/Credit ledger for tax/interest payment [to be populated after payment of tax and submissions of return]

This section will be automatically filled in when you pay taxes and submit your returns.

 

Finally sign off with a declaration that all information has been supplied and is correct.