Introduction of GST has introduced a brand new return filing process. There are a lot of GST returns but not every return is for everyone. GSTR 3 is one of the many returns.
Have questions about GSTR 3 and don’t know how to file it? Find answers to all your questions here along with a step-by-step filing guide.
What is GSTR 3?
GSTR 3 is an auto-generated monthly return. It captures information from GSTR 1 (filed by seller) and GSTR 2 (filed by buyer). It contains a summary of sales and purchases during the month as well as the amount of tax liability under GST.
Who needs to file it?
All regular taxpayers who are registered under GST need to file it. However, the following persons have separate returns for them and they do not need to file GSTR 3.
- Input Service Distributors
- Composition Dealers
- Non-resident taxable person
- Persons liable to collect TCS
- Persons liable to deduct TDS
- Suppliers of OIDAR
Further, it is compulsory to file GSTR 3 even if there were no transactions during the month.
What is the last date for filing GSTR 3?
The last date for filing GSTR 3 has been extended to 10th November 2017 for the month of July.
Earlier due date for the month of August was 15th October which has been scrapped. The revised due date for the month of August and onward is yet to be notified.
What details do I need to provide?
There are two parts in GSTR 3. Part A consists of Columns 3 to 11 and it completely auto-populated from GSTR 1 and GSTR 2. Part B consists of Columns 12 to 15.
Below you can find detailed information about every section of GSTR 3 return.
GSTIN and Name of the Entity
Here you need to fill the GSTIN.
GSTIN stands for Goods and Services Taxpayer Identification Number. It is a PAN based number which is auto-populated at the time of return filing. The Legal Name and/or Trade Name will auto-populate from the GSTIN.
This section is auto-populated from GSTR 1, 1A, and 2.
This section will consist of details of turnover from different activities. Turnover from exempted, nil rated, and Non-GST supplies also needs to be reported here.
Taxable supplies include regular sales to registered as well as unregistered buyers.
The second item is zero-rated supply on payment of tax. This means exports on which IGST has been paid (which is later claimed as a refund).
Zero-rated supplies without payment of tax are exports made under a bond or letter of undertaking.
Supplies to Special Economic Zones (SEZs) are deemed as exports.
NIL rated items are chargeable to zero rate of tax.
Non-GST items are outside the purview of GST and turnover from supply of such items also needs to be reported here.
Below is a list of Non-GST items.
Inter-State Net Supplies
The next section displays the net inter-state supplies for the month. Supplies include regular taxable supplies, supplies on a reverse charge basis and zero-rated supplies with payment of IGST.
There is a separate section indicating sales effecting through an E-commerce operator collecting tax at source.
Intra-State Net Supplies
Details displayed in this section are the same as the previous section. The only difference is that the details are in respect of intra-state supplies.
Tax Effect of Amendments in Respect of Outward Supplies
The main aim of this section is to keep track of any changes to invoices and the resulting changes in the tax liability.
Any changes to sales invoice will also change the amount of Input Tax Credit which may lead to excess payment of tax or even underpayment of tax.
In both cases, it is important to keep track of the changes in tax liability which is precisely what this section does.
Purchases on Reverse Charge Basis (including imports)
The first part reflects inter-state, as well as intra-state purchases and the second part reflects changes to these purchases (if any) and the resulting changes to tax liability.
Input Tax Credit
Part I displays ITC from inputs, input services, and capital goods. Part II reflects changes made to details furnished in earlier returns.
Adjustments to Output Tax
This section will display any mismatches in Input Tax Credit and tax liability. These mismatches can occur due to various reasons which are listed in the section itself. Any excess claim in ITC will be added to the tax liability and if the ITC available is more than the tax liability, the difference will be reduced from the tax liability.
Total Tax Liability
This section displays the tax liability by breaking up into the following sections.
- Outward Supplies (Sales)
- Inward Supplies (Purchases) attracting reverse charge
- Tax Liability due to reversal or reclaim of Input Tax Credit
- Tax liability due to mismatch/rectification or any other reason
TDS and TCS Credit
This section reflects the amount of TDS and TCS credits which will be adjusted from the total tax liability to arrive at the net amount of tax payable.
If you did not pay your tax on time, interest at the rate of 18 % per annum is payable on the amount of outstanding tax. Interest will be chargeable from the next day of the due date of payment (20th of every month in this case) and will continue till the tax is actually paid.
This section shows a break-up of CGST, IGST, SGST, and cess along with a break up of various reasons for charging interest on outstanding tax amount.
This section displays any late fee applicable on late filing of GST Returns.
This is the part where you need to fill in the details manually.
Tax Payable and Paid
In this column, you need to fill the amount of tax due from you and tax paid by you. You need to fill the amount of tax paid in cash and through availing ITC.
Interest, Late Fee and any other amount other than tax
Here, you need to fill any interest, late fee or any other amount due from you along with details of payment. Interest is applicable on late payment of outstanding tax and late fee is applicable on late filing of returns.
Refund Claimed from Electronic Cash Ledger
If payment of tax is for an amount higher than the actual tax liability, you can claim a refund of the difference here. However, please note that you can claim a refund from cash ledger only if you have paid all amounts due from you.
Debit Entries in Electronic Cash or Credit Ledger
You don’t need to fill any details here. This section will auto-populate after you pay all taxes due from you and also file your GST Return.
The last step in filing GSTR 3 is to sign off the verification declaring that all information in the return is correct and does not conceal anything.
Is GSTR 3B a part of GSTR 3?
GSTR 3B is a temporary return which needs to be filed for the months of July and August.
It exempts the taxpayer from the requirement of filing 3 returns every month for the initial months of July and August.
GSTR 3B simplifies things a little and brings down the number of monthly returns from 6 to 2 for the initial 2 months. This gives considerable relief to the taxpayer.
It essentially combines the details to be filled in GSTR 1, 2, and 3 and familiarizes the taxpayer with the new return filing system.
Everyone who is liable to file GSTR 1, 2, and 3 need to file GSTR 3B.
Moreover, even after filing GSTR 3B for the months of July and August, you still need to file GSTR 3 for these two months.
If there is a difference between the liabilities declared in GSTR 3B and actual liabilities as per GSTR 3, the system will automatically update the difference. If the amount of actual liability is higher than the amount declared in GSTR 3B, then the taxpayer will need to pay this difference in amount along with interest.
How to file GSTR 3?
At present, there are two ways to file GSTR 3.
Online Filing through GST Portal
You can do this by logging onto your account on the GST common portal.
It’s an easy 4 step process.
Log in to your account on the GST common portal.
Fill the relevant information according to the type of return.
Verify auto-populated information and add or edit details, if necessary.
Digitally sign the return using a digital signature of the authorized person.
GST Suvidha Providers (GSPs)
The Suvidha Provider will prepare and upload your return using any of the above methods. You need to provide all relevant details to the Suvidha Provider to facilitate the filing of returns.
Can I revise GSTR 3?
It is not possible to revise any of the GST Returns. If there is any correction or revision, you can do it while filing the return for the next tax period. You need to make these revisions/corrections in next month’s GSTR 1 and GSTR 2 respectively.
GSTR 3 is an auto-populated return and it is not possible to make any edits to it.
What if I don’t file GSTR 3?
If you fail to file GSTR 3 on time, there is a penalty of Rs. 100 per day. Combine CGST and SGST and this penalty will reach Rs. 200 per day. There is no penalty in respect of IGST and the maximum chargeable penalty is Rs. 5000.
In case of non-filing of GSTR 3, you may also receive a default notice under section 46 of the CGST Act and will be liable to pay the tax amount along with interest on the outstanding amount.
Not only this, if you do not file GSTR 3, filing GSTR 1 for the next month will not be possible.
So, don’t be late in filing your GSTR 3 and don’t be a defaulter. Now when the due date
has been extended even further, there is plenty of time and opportunity to file your
GSTR 3 within time and with all available details.
Filing timely returns is beneficial for both you and your business. Your business gains credibility and you gain peace of mind by not having to worry about being a tax defaulter.
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