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What is GSTR-1, GSTR-2 and GSTR-3B- How to File Return Explained

What is GSTR-1, GSTR-2 and GSTR-3B- How to File Return Explained

What is GSTR-1, GSTR-2 and GSTR-3B and How to File Return Explained

To comply with the GST regulations, individuals and businesses must submit GST returns periodically. These returns are crucial for obtaining a comprehensive understanding of income details that aid in computing the annual tax owed to the government.

There are three significant types of GST returns that businesses may need to file, based on their type of operation. To assist newcomers, we have provided essential information about each of these reports to make the filing process easier.

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GST Returns- GSTR-1, GSTR-2 and GSTR-3B Explained:

Having knowledge of your tax liability and the possibility of any GST returns is crucial. To this end, the GST report or return serves as a means of summarizing the GST received and paid by you, providing insight into how your GST was calculated, and ensuring credit flow to the appropriate recipient.

GST returns are classified into various categories, including GSTR-1, GSTR-2, GSTR-3, GSTR-4, GSTR-5, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, and GSTR-11. While some of these GST returns may be subdivided, this article focuses primarily on GSTR-1, GSTR-2, and GSTR-3B.

GST returns are mandatory filings that taxpayers are required to submit to the government on a periodic basis, detailing their business activities and the taxes they owe. Here’s an overview of the three main types of GST returns in India:

  1. GSTR-1: This return is filed to furnish details of all the sales or outward supplies of goods and services made by a taxpayer in a given period. GSTR-1 must be filed by the 11th day of the following month. The following details must be reported in GSTR-1:
  • Invoice-wise details of all the outward supplies
  • GSTIN of the recipients
  • Total taxable value and taxes charged on the supplies
  • Details of any exports made or deemed exports
  1. GSTR-2: This return is filed to furnish details of all the purchases or inward supplies of goods and services made by a taxpayer in a given period. GSTR-2 is auto-populated based on the details furnished by the counterparty (seller) in their GSTR-1. The taxpayer can make changes to this return. GSTR-2 must be filed by the 15th day of the following month.
  2. GSTR-3B: This return is filed to summarize the details of all the outward and inward supplies made by a taxpayer and to determine the net tax liability for the month. GSTR-3B must be filed monthly by all registered taxpayers, except for those who have opted for the composition scheme. It must be filed by the 20th day of the following month. The following details must be reported in GSTR-3B:
  • Total sales or outward supplies
  • Total purchases or inward supplies
  • The amount of tax payable
  • The amount of tax paid
  • The balance tax liability

Also Read-GSTR9 and GSTR9C: All You Need to Know About GST Returns

Difference between GSTR-1, GSTR-2 and GSTR-3B:

Here is the key differences between GSTR-1, GSTR-2, and GSTR-3B:

GST Return Purpose Filing Frequency Details Captured
GSTR-1 Details of all outward supplies Monthly (by 11th of the following month) Invoice-wise details, GSTIN of recipients, taxable value and taxes charged on supplies, export details
GSTR-2 Details of all inward supplies Monthly (by 15th of the following month) Auto-populated based on seller’s GSTR-1, taxpayer can make changes
GSTR-3B Summary return of both outward and inward supplies Monthly (by 20th of the following month) Total sales/outward supplies, total purchases/inward supplies, amount of tax payable, amount of tax paid, balance tax liability

About GSTR1 Reporting of Sales;

GSTR-1 is a type of GST return that captures details of all outward supplies or sales of goods and services made by a taxpayer in a given period. The taxpayer is required to furnish this return monthly, by the 11th day of the following month.

The following details must be reported in GSTR-1:

  • Invoice-wise details of all the outward supplies
  • GSTIN of the recipients
  • Total taxable value and taxes charged on the supplies
  • Details of any exports made or deemed exports

GSTR-1 is a crucial return as it forms the basis for other returns such as GSTR-2A and GSTR-3B. It enables the recipient of goods or services to claim input tax credit (ITC) and ensures credit flow to the proper recipient. It also helps in the reconciliation of data between suppliers and recipients.

It’s important for taxpayers to file GSTR-1 accurately and on time to avoid penalties and interest charges. Any errors made in GSTR-1 can lead to mismatched data between GSTR-1 and GSTR-2A, causing delays in ITC claims and refund processing.

The frequency of filing GSTR-1 depends on the turnover rate of the taxpayer; those with a turnover rate above Rs.1.5 crores file it monthly, while those with a turnover rate below that amount file it quarterly.

There are a few exceptions to the requirement to file GSTR-1, including composition dealers, input service distributors, non-resident taxable persons, and those liable to collect either TCS or TDS.

Failure to file GSTR-1 on time may result in a penalty of Rs.50 and Rs.20 per day. Therefore, it’s important for taxpayers to file their returns accurately and on time to avoid penalties and ensure smooth credit flow.

How to File GSTR1 Online:

To file GSTR-1, follow these steps:

  1. Login to the GST portal with your username and password.
  2. Go to the ‘Services’ tab and select ‘Returns’.
  3. Select the financial year and the tax period for which you want to file the return.
  4. Click on ‘Prepare Online’ under the GSTR-1 tab.
  5. Fill in the details of your outward supplies, including the invoice number, date, and value of supplies made to registered taxpayers, unregistered taxpayers, and exports.
  6. Upload the invoices in the specified format.
  7. Preview the details and make any necessary corrections.
  8. Click on ‘Generate GSTR-1 Summary’ to generate a summary of your outward supplies.
  9. Reconcile the details of your outward supplies with your books of accounts.
  10. Sign and submit the return using a digital signature certificate (DSC) or an electronic verification code (EVC).

Once you have submitted your GSTR-1 return, you will receive an acknowledgement with a unique reference number. You can track the status of your return by logging into the GST portal and checking the ‘Returns’ tab. It is important to file your GSTR-1 return on time to avoid penalties and interest.

GSTR-2 or Purchase Report:

GSTR-2 or Purchase Report is an important component of GST returns filing. It is a monthly inward supply report that deals with the details of purchases made by a registered taxpayer of taxable goods or services, including reverse charge transactions. In this article, we will take a closer look at what GSTR-2 is, who needs to file it, how to file it, and its significance in the GST return filing process.

What is GSTR-2 or Purchase Report?

As mentioned earlier, GSTR-2 is a monthly return that captures the inward supplies made by a registered taxpayer of taxable goods, services, or both. It is used to reconcile the details of inward supplies mentioned in GSTR-2 with the outward supplies mentioned in GSTR-1. In simpler terms, it helps in buyer-seller reconciliation, also known as invoice matching.

Significance of GSTR-2 in the GST return filing process:

GSTR-2 is a crucial component of the GST return filing process, as it helps in reconciling the details of inward supplies mentioned in GSTR-2 with those mentioned in GSTR-1. This ensures that the input tax credit claimed by the recipient matches the output tax declared by the supplier, thereby preventing any tax evasion or discrepancies.

GSTR-3B or Tax Summary Report:

GSTR-3B is a monthly tax summary report that must be filed by all registered taxable persons in India. It is a non-revisable tax return that provides a summary of the taxes payable and paid under the Goods and Services Tax (GST) regime. In this article, we will take a closer look at what GSTR-3B is, who needs to file it, and the consequences of not filing it on time.

Who Needs to File GSTR-3B?

Every taxpayer with a GST registration is required to file GSTR-3B, except for those who are registered under the composition scheme, non-resident taxable persons, and TDS deductors. It is mandatory to file the tax return even if there are no transactions in a particular month. Failure to file GSTR-3B on time can attract a penalty of Rs.50 per day for normal taxpayers, while the penalty for those with nil tax liability is Rs.20.

How to File GSTR-3B?

The GSTR-3B return can be filed online through the GST portal. The process involves the following steps:

  1. Log in to the GST portal using your registered credentials.
  2. Navigate to the ‘Services’ tab and select the ‘Returns’ option.
  3. Select the ‘GSTR-3B’ option from the list of available returns.
  4. Fill in the required details such as the GSTIN, period of return, and details of outward and inward supplies.
  5. Reconcile the tax liability and the amount paid and make the payment of the balance tax due.
  6. Submit the return and download the acknowledgment receipt for future reference.

GSTR-3B is a crucial tax return that helps the government track the tax liability of registered taxpayers under the GST regime. Filing the tax return on time is essential to avoid late fees and other penalties. With the help of the GST portal and other online tools, taxpayers can easily file their GSTR-3B returns and stay compliant with the GST laws.

Frequently Asked Questions (FAQs) about GSTR1, GSTR2, and GSTR3B:

Q: What is the difference between GSTR1, GSTR2, and GSTR3B?

A: GSTR1 is a monthly or quarterly tax return filed by registered taxpayers that provides details of outward supplies of taxable goods and services. GSTR2 is a monthly return filed by registered taxpayers that provides details of inward supplies of taxable goods and services. GSTR3B is a monthly non-revisable tax summary report that must be filed by all normal and casual taxpayers.

Q: Who needs to file GSTR1, GSTR2, and GSTR3B?

A: All registered taxpayers must file GSTR1 except for composition dealers, input service distributors, non-resident taxable persons, and persons liable to collect either TCS or TDS. GSTR2 is applicable to almost every registered person except the non-residential taxable person, input distributor, and e-Commerce operator. GSTR3B must be filed by all normal and casual taxpayers.

Q: What are the due dates for filing GSTR1, GSTR2, and GSTR3B?

A: The due date for filing GSTR1 is the 11th of the following month for monthly filers and the last day of the following month for quarterly filers. The due date for filing GSTR2 is the 15th of the following month. The due date for filing GSTR3B is the 20th of the following month.

Q: What happens if I do not file GSTR1, GSTR2, or GSTR3B?

A: Failure to file GSTR1 or GSTR2 can result in a penalty of Rs.50 per day for normal taxpayers and Rs.20 per day for taxpayers with nil tax liability. Failure to file GSTR3B can result in a penalty of Rs.50 per day for normal taxpayers and Rs.20 per day for taxpayers with nil tax liability.

Q: Can I revise my GSTR1, GSTR2, or GSTR3B after filing?

A: GSTR1 and GSTR2 can be revised in the following tax period. However, GSTR3B cannot be revised as it is a non-revisable tax summary report need to take effect of revision in next GSTR3B.

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