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Goods and Services Tax (GST) is an Indirect Tax in India on the supply of goods and services. It is a multistage, destination-based tax as it is imposed at every step in the production process. Goods and services are divided into five tax slabs - 0%, 5%, 12%, 18% and 28%.

The tax came into effect from July 1, 2017, through the implementation of One Hundred and First Amendment of the Constitution of India. The tax rates, rules, and regulations are governed by the GST Council which consists of the finance ministers of the center and all the states.

India follows the dual form of GST. At the intra-state level, where goods and services are sold within the state, CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) is levied. When selling goods and services into other states (inter-state), IGST (Integrated Goods and Services Tax) is levied.

Evolution of GST in India

In February 2006, the then Union Finance Minister in his Budget for 2006-07 proposed that GST would be introduced from 1st April 2010. The Empowered Committee of State Finance Ministers (EC), which had formulated the design of State VAT was requested to come up with a road map and structure for the GST. Based on discussions within and between it and the Central Government, the EC released its First Discussion Paper (FDP) on GST in November 2009. The FDP spelled out the features of the proposed GST and has formed the basis for the present GST laws and rules.

Before the implementation of Goods and Service Tax (GST), the Indian taxation system was a farrago of central, state, and local area levies. By subsuming more than a score of taxes under GST, the road to a harmonized system of indirect tax has been paved making India an economic union.

HSN Code

HSN (Harmonized System of Nomenclature) is a 4 to 8-digit code for identifying the applicable rate of GST on different products.

GST Registration

GSTIN refers to the unique GST Identification Number that every business is allotted. Every taxpayer is allotted a state-wise, PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). Having PAN is mandatory for register under GST.

GST Returns

In the GST regime, any regular business has to file two monthly returns and one annual return. This means total 26 returns in a year.

  • GSTR-1 (Monthly or Quarterly): Details of outward supplies of taxable goods and/or services affected.

  • GSTR-2 (Suspended): Details of inward supplies of taxable goods and/or services effected claiming the input tax credit.

  • GSTR-3 (Suspended): Monthly return based on finalization of details of outward supplies and inward supplies along with the payment of tax.

  • GSTR-3B (Monthly): Simple Return in which a summary of outward supplies along with Input Tax Credit is declared and payment of tax is affected by the taxpayer.

  • GSTR-9 (Annually): Annual Return for a Normal Taxpayer.

  • GSTR-10 (Once): Final Return when GST Registration is canceled or surrendered.

All taxpayers, except those registered under the Composition scheme, are required to file return FORM GSTR-3B and pay tax on a monthly basis. Every person who has registered for GST must file the return GSTR-3B including nil returns. The GSTR-3B for a particular month should be filed by the 20th of the following month. For example, GSTR-3B for July should be filed by the 20th of August, and the GSTR-3B for August should be filed by the 20th of September and so on.

Taxpayers with turnover up to Rs. 1.5 crore are required to file information in FORM GSTR-1 on a quarterly basis. Other taxpayers would have to file FORM GSTR-1 on a monthly basis.

The forms for the annual returns are FORM GSTR-9 and reconciliation statement in FORM GSTR-9C.

New Return System

The new return system is simple with two main annexures. One for reporting details of outward supplies (FORM GST ANX-1) and the other for availing input tax credit (FORM GST ANX-2) based on invoices uploaded by the supplier.

From October 2019 onwards, FORM GST ANX-1 is made compulsory. Large taxpayers (having aggregate turnover of more than Rs. 5 crores in the previous year) are to file FORM GST ANX-1 on a monthly basis whereas small taxpayers file first FORM GST ANX-1 for the quarter October 2019 to December 2019 in January 2020.

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GSTR-3B is a monthly return. You can file your return online on the GST Portal. GST liability is calculated after submitting the return. The GSTR-3B is divided into six sections.

1. GSTIN

2. Legal Name of the Registered Person

3.1 Outward supplies and inward supplies on reverse charge

For each of these, you have to provide the total taxable value (total amount which has been invoiced). Then, break this up into IGST, CGST, SGST, or UTGST and cess if any. Here, you do not have to provide invoice level details. Only the consolidated values for the month have to be provided. Also, you do not have to provide a GST rate; only the total tax values.

(a) Outward taxable supplies: Do not include supplies that are zero-rated, or have a nil rate of tax or are exempt from GST. These must be provided separately. You have to include only those supplies on which GST has been charged by you.

Value of Taxable Supplies = value of invoices + value of debit notes – value of credit notes + value of advances received for which invoices have not been issued in the same month – the value of advances adjusted against invoices

(b) Outward taxable supplies (zero-rated): Here, include only those supplies on which the GST rate is zero. Zero-rated supplies are exports or supplies made to SEZ.

(c) Other outward supplies (nil rated, exempt): Here, include supplies that are exempt from GST or are nil rated. Nil rated supplies are those for which the GST rate is nil. Or which have been kept exempt from GST. For example, salt, puja samagri, curd, lassi, fresh milk. These goods are exempt from the GST.

(d) Inward supplies (liable to reverse charge): Here, provide details of purchases made from unregistered dealers on which reverse charge applies. In such cases, you have to prepare an invoice for yourself and pay the applicable GST rate of tax.

(e) Non-GST outward supplies: Here, provide the details of any supplies made by you kept wholly out of GST. For example, alcohol and petroleum products.

3.2 Of the supplies shown in 3.1(a) above, details of inter-state supplies made to unregistered persons, composition taxable persons, and UIN holders.

Here, you have to mention the inter-state supplies which are made to

  • unregistered person
  • composition dealers
  • those who hold a UIN (UIN holders mean those who have a Unique Identification Number instead of a GSTIN. These are specialized agencies of the UNO (United Nations Organisation) or an embassy)

4. Eligible ITC

This is the detail required for an input tax credit. It must be provided separately for IGST, CGST, SGST, UTGST, and Cess. Only total values have to be reported and invoice level information is not required.

(A) ITC Available (whether in full or part): This information must be broken down into ITC on:

  • import of goods
  • import of services
  • inward supplies on reverse charge (other than on import of goods and services reported above)
  • inward supplies from your Input Service Distributor (ISD)
  • all other ITC

(B) ITC Reversed

(1) The CGST rules require that input credit must be reversed for goods and services, where they have been used partly for business and partly for other purposes, to the extent not used for business. Similarly, input credit reversal is also required where supplies include taxable, exempt, and nil-rated supplies. In the same manner, input credit related to capital goods used for business and other purposes, for taxable, exempt, nil rated supplies must also be reversed to the extent not used for business.

(2) Others - Any other ITC which has been reversed by you.

(C) Net ITC available: This is (A) – (B).

Ineligible ITC

(1) As per Section 17(5) - Report credit which is entirely not available to you.

(2) Others

5. Provide values of exempt, nil rated, and non-GST inward supplies: Here, you have to report any purchases made by you of goods or services, which are from a composition dealer, are exempt, nil rated, or not covered by GST at all. This information must be broken down into inter-state and intra-state.

6. Payment of Tax

Under this section, you have to report the final tax payable by you on taxable supplies made by you, which will match with 3.1.(a). The amount is separately reported under IGST, CGST, SGST, or UTGST. Also, report the credit which has been availed against these. This amount is under 4(C). The balance tax must be deposited by you.

Guide for Filing GSTR-3B on GST Portal

Step 1: Log in to GST Portal.

Step 2: Go to - Services > Returns > Returns Dashboard.

Step 3: Select the Financial Year and Return Filing Period for which you want to file the return from the drop-down list. Then, click the SEARCH button.

Step 4: On the "Monthly Return GSTR-3B" tile, click the PREPARE ONLINE button.

Step 5: Enter values in each tile. You need to enter the total values under each head. Also, fill in Interest and Late Fees, if applicable.

Step 6: Click the SAVE GSTR-3B button at the bottom of the page after all the details are added. A success message is displayed on the top of the page.

Step 7: After all the details are saved, the SUBMIT button is enabled. Click the SUBMIT button to submit the finalized GSTR-3B return.

A success message is displayed at the top of the page. After you submit the form, the added data is frozen. No changes in any field can be made after this. The ITC and Liability ledger will also get updated on submission. Status of the GSRT- 3B will be changed to "Submitted".

Step 8: Now, the "Payment of Tax" tile is enabled after the successful submission of the return. To pay the taxes and offset the liability:

  • Click the "Payment of Tax" tile.
  • Tax liabilities as declared in the return along with the credits, get updated in the ledgers and are reflected in the ‘Tax payable’ column of the payment section. Credits get updated in the credit ledger and the updated balance is seen when hovering on the specific headings in the payment section.
  • Click the CHECK BALANCE button to view the balance of cash and credit. This functionality enables the taxpayers to check the balance before making the payment for the respective minor heads.
  • Click the OK button to go back to the previous page.
  • Provide the amount of credit to be utilized from the available credit (in the separate heads) to pay off the liabilities.
  • Click the OFFSET LIABILITY button to pay off the liabilities. A confirmation message is displayed. Click the OK button.

Step 9: Select the checkbox for declaration. From the "Authorised Signatory" drop-down list, select the authorized signatory. Click the FILE GSTR-3B WITH DSC or FILE GSTR-3B WITH EVC button.

Step 10: Click the PROCEED button. 

On successful filing, a message is displayed. Click the OK button. The status of GSTR-3B return will now have changed to "Filed". You can click the VIEW GSRT-3B button to view the GSRT-3B return.

FAQs

1. I have no sales or purchase in a month. Should I still file GSTR-3B?

Yes, GSTR-3B has to be filed by every registered person even if there are no transactions in a month.

2. Should I provide invoice-wise details on the return?

Only consolidated numbers are required in GSTR-3B. An invoice-wise breakup is not required.

3. I have two GSTINs for different states. Can I file one GSTR-3B for both the registrations?

No. GSTR-3B has to be filed for every GSTIN separately. The returns cannot be clubbed.

4. Will there be any invoice matching in GSTR-3B?

Invoice matching is not done in GSTR-3B. This return is more of a self-declaration.

5. Do I have to file other returns even after filing GSTR-3B?

GSTR-1 has to be filed on a monthly or quarterly basis depending on the turnover. You have to file GSTR-3B every month.

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GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies (sales). This return has a total of 13 sections.

Businesses with sales up to Rs. 1.5 crore have to quarterly returns. Other taxpayers with sales above Rs. 1.5 crore have to file monthly return.

The return once filed cannot be revised. Any mistake made in the return can be rectified in the next period (month or quarter) return.

Guide to Gile GSTR-1 on GST Portal

Step 1: Log in to the GST Portal.

Step 2: Go to the Services > Returns > Returns Dashboard.

Step 3: From the drop-down, select the financial year and the month for which you want to file the return. Click on the SEARCH button. 

Step 4: Click on the PREPARE ONLINE button.

This will take you to the details of outward supplies of goods or services.

Step 5: 4A, 4B, 4C, 6B, 6C - B2B Invoices

All B2B invoice details are required to be entered inside this tile. Click on the ADD INVOICE button.

  1. Select the checkbox for Deemed Exports, SEZ Supplies with Payment, or SEZ Supplies Without Payment, if applicable.
  2. Enter the receiver's GSTIN or UIN. After this, the Name, POS, and Supply Type are auto-populated.
  3. Enter the Invoice No., Invoice Date, and Total Invoice Value.
  4. In case the supply attracts a reverse charge or supply is through e-commerce operator selects the checkbox.
  5. Enter the Taxable Value of supplies made in the taxable value field. Based on inter-state or intra-state transactions, CGST and SGST or IGST will appear under the amount of tax.
  6. The amount of tax is auto-calculated based on the taxable value entered.
  7. Click on the SAVE button.

You will be redirected to a page where you can see the summary of all the invoices entered. You can edit or delete the invoices here.

Click the BACK button to go back to the Invoices. Click on the BACK button to go back to the GSTR-1 page. You will see that the B2B invoices tile reflects the number of invoices added along with Total Invoice value, Total taxable value, and Total Tax Liability.

Step 6: 5A, 5B - B2C (Large) Invoices

All outward supplies made to a consumer where the invoice value is more than Rs 2.5 lakh have to be entered in this tile.

Step 7: 9B - Credit / Debit Notes (Registered)

This tile is used to add the Credit and Debit Note issued to registered dealers.

Step 8: Credit / Debit Notes (Unregistered)

This tile is used to add the Credit and Debit Note issued to unregistered dealers.

Step 9: 6A - Exports Invoices

Invoices for supplies exported has to be added in this section.

Step 10: 7- B2C Others

The details of those invoices that are B2C and the amount is less than Rs 2.5 lakh, have to be entered here.

Step 11: 8A, 8B, 8C, 8D - Nil Rated Supplies

All supplies made which attract the nil rate of GST should be entered in this tile.

Step 12: 11A(1), 11A(2) - Tax Liability (Advances Received)

All the supplies for which advances were received from the receiver of supplies but the invoice was not raised will be entered here.

Step 13: 11B(1), 11B(2) - Adjustment of Advances

Details of all the invoices raised in the month for which the return is being filed but the advance was received and tax was already paid in the previous months has to be entered here.

Step 14: HSN-wise summary of outward supplies

The GSTR-1 return requires a dealer to provide an HSN-wise summary of outward supplies and rate wise along with quantitative details.

Step 15: 13 - Documents Issued

Every taxpayer is required to provide details of the total document issued during a month.

FAQs

1. Should I file GSTR-1 even if there are no sales in a month or quarter?

Yes, filing GSTR-1 is mandatory. If your total sales for a year is less than Rs 1.5 crore, then you need to file the return on a quarterly basis.

2. Can I upload the invoice only while filing the return?

You can upload invoices anytime. Ideally, you should upload invoices at regular intervals during the month to avoid bulk upload at the time of filing return. This is because bulk upload can take a lot of time.

3. Can I change a bill uploaded on GST?

After uploading bills, you can make changes multiple times. There is no restriction on changing invoices after uploading them. But you can change an invoice only before submitting a return. Once submitted, the numbers are frozen.

4. Should I file GSTR-1 even after filing GSTR-3B?

GSTR-3B is a simple return to be filed on a monthly basis. You still need to file the return on a monthly or quarterly basis.

5. I have opted for a composition scheme. Should I file GSTR-1?

GSTR-1 should not be filed by you. GSTR-4 on a quarterly basis has to be filed by a taxpayer opting for a composition scheme.

6. Should I make GST payment after filing GSTR-1?

GSTR-1 is a return where details of sales are filed with the government. No tax has to be paid after filing this return. The tax has to be paid at the time of filing GSTR-3B.

7. My annual sales are below Rs. 1.5 crore. Should I file a quarterly or monthly return?

You need to file a quarterly return.

8. Can amendments be made to details already filed in GSTR-1? If yes, then what will be the filing period to make amendments?

Yes, you can make amendments to an already filed GSTR-1 of a particular tax period by declaring the amended details in the return.

9. What should the Revised date be in the amended invoice?

The Revised date to be mentioned in an amended invoice must be not later than the last date of the original invoice tax period.

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