Since GST has been implemented in the country, it has transformed the way individuals and businesses pay taxes. But there are various aspects of GST that people aren’t familiar with, such as how to search and verify GSTIN and what are different parts of GSTR 3B filing & returns. One of the most essential facets of filing returns is the form GSTR 3B.
GSTR 3B Meaning: What is GSTR 3B?
The GSTR-3B is a combined summary of the return of sales and purchase of supplies that the Government of India has introduced to relax the requirement for businesses.
It is a monthly summary return filed by taxpayers by the 20th of the next month. GST3B helps in the disclosure of supplies made during the month along with the payment of GST, input tax credit claims, reverse charge on specific purchases, and so on.
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What is the last day for GSTR-3B filing?
The GSTR-3B for a month should be submitted by the 20th of the next month. For instance, GSTR-3B for August is required to be filed by the 20th of September, and the GSTR-3B for the month of September should be filed by the 20th of October and so on.
Prerequisites for GSTR 3B Filing
- GSTR-3B should be filed by businesses liable to file the monthly returns GSTR-1, GSTR-2, and GSTR-3.
- GSTR-3B can be filed online, through the GSTN portal. The tax can be paid online or via challans in banks.
- Users either need a digital signature certificate or an OTP from their registered phone to verify the return using an EVC (electronic verification code). Users can also file their GST returns using an Aadhar based e-sign.
What’s the Procedure of GSTR 3B Filing?
There are eight simple steps that a taxpayer needs to follow in order to file GSSTR 3B every month. We have broken down the process into seven simple steps for a better understanding of the whole filing procedure:
1. On the GSTR-3B, taxpayers will have to provide their GSTIN
2. Next, they need to provide their legal name and fill other sub-sections such as:
3.1. Details of sales and purchases which are liable for reverse charge:
In this section, taxpayers need to enter their total taxable value, i.e., the full value of items and services on invoices + debits - credits + advance tax received, along with taxes collected under different tax segments (IGST, CGST, SGST/UTGST, and Cess) for the following:
a) Sales supplies (zero-rated supplies - including goods and services exported from overseas, listed exports or those traded to SEZ units or developers).
b) Sales supplies (except zero-rated, nil rated and exempted) - including all regular taxable sale of goods and services.
c) Other supplies such as nil-rated and exempted supplies. It’s crucial to keep in mind that nil-rated and exempted products and services under GST are two different sections. While nil-rated goods are not levied at the time of sale, input tax credit can still be claimed for them. Exempted products and services are not collected at the PoS, and no input tax credit can be claimed in this case.
d) Purchase goods liable for a reverse charge (transactions where the taxpayer is liable to pay the tax to the government on behalf of a supplier who may/may not be registered under GST).
e) Non-GST sales supplies
f) Cess is applicable to a few sectors, such as tobacco. If a business is not involved in sales of such products, cess-related details aren’t required.
3.2. Details of interstate sales made to unregistered buyers, buyers registered under the composition scheme, and Unique Identification Number holders:
In this section, taxpayers need to provide details about the location of supply (the location of the customer/business where goods and services are to be delivered), total taxable amount, and IGST levied for the following interstate sales types:
- Supplies made to unregistered individuals/businesses
- Supplies made to Composition Taxable businesses
- Supplies made to Unique Identification Number holders
4. Eligible Input Tax Credit (ITC): Final tax payment and credits will be calculated based on the business’s income tax credit. In this section, the taxpayer needs to fill details about the following:
- ITC available (whether in whole or partial): Taxes related to import of goods and services, inward supplies accounted for a reverse charge, inward supplies from input service distributors, and all miscellaneous Input Tax Credits which haven’t been counted under subsections (1) & (2) of section 4A.
- ITC Reversed (according to sections 42 and 43 of CGST rules): Under this, taxpayers need to furnish details of goods and services that have been exploited for non-business purposes. The ITC against such items and services will be made unavailable to the taxpayer since legally, taxpayers can only claim the input tax credit on taxable goods and services by selling them or for business-related activities.
- Net ITC available: This can be calculated by subtracting the reversed ITC (B) from the available ITC (A).
- Ineligible ITC (according to section 17(5) and others): This involves blocked credits, which happen when specific services are involved. A taxpayer isn’t not allowed to claim ITC on services such as transportation (unless they’re made for supplying goods), health services, food, transport services for employees, and beauty services.
5. Amount of nil-rated, exempt, & non-GST inward supplies: Under this, the taxpayer should enter tax details for intrastate and interstate purchases. This includes goods bought from a supplier, purchase of products and services that are either exempt from GST, nil-rated or non-GST supplies.
5.1. Interest and Late fee payable: This might be applicable for individual businesses that have some additional tax liabilities imposed on them (due to failure of compliance with one or several GST regulations). If this applies to a business, then they are required to declare the aggregate amount of interest along with the late fee applicable on taxable items that may or may not draw tax on reverse charges under different taxable provisions such as IGST, CGST, SGST/UTGST, and Cess.
6. Payment of tax: A business has to pay the GST they owe to the government before filling up this section since, it covers the total tax amounts paid for CGST, SGST, IGST, and cess. The taxpayer needs to include the overall tax payable, tax paid through ITC (by offsetting the amount paid on inputs as tax), tax paid against TDS/TCS credits, and cess that was paid in cash (including those amounts paid as interest and late fee).
7. TDS/TCS credit: Whenever a customer deducts or collects tax at source, then the business receives credit against it. If the taxpayer has accumulated similar credits during a specific month (known as TDS/TCS credits), they are put under this section under different tax brackets such as IGST, CGST, SGST/UTGST.
And finally, after filling in all the aforementioned details, the authorised taxpayer needs to sign the GSTR-3B form and can be submitted.
Who needs to go for GSTR 3B filing?
GST mandates the filing of GSTR 3B return to every eligible individual/business, including taxpayers with nil returns. GST3B needs to be filed monthly as a self-declaration form by all taxpayers irrespective of the returns.
What details to be furnished?
The details that are needed to be furnished include:
- Details of purchases and sales made by the taxpayer.
- Liable Tax
- Liable Input Tax Credit
- Tax Paid
GSTR 3B Format
1. GSTIN: GSTIN is a 15-digit GST identification number. This column will already be filled by default.
2. Registered Name: Like GSTIN, this field will also remain filled by default at the time when the user logs-in to the GST Portal. The trade name needs to be provided separately.
3. Details of Outward Supplies (Exports) (Part A): Here, the entire taxable value needs to be filled with total tax.
- Taxable Exports (Zero Rated)
- Export towards: Nil Rated and Value Exempted
- Import to be paid based on reverse charge
- Export for Non-GST values
4. Inter-state supplies made to unregistered individuals/dealers, businesses and UIN holders (Part B): This section shows the break-down of the export of supplies made to unregistered individuals or dealers, businesses and UIN Holders. This section needs to be calculated state‐wise/union territory‐wise holistically with taxable value, and gross IGST levied on the supplies.
5. Details of eligible Input Tax Credit: Here is the summary of eligible Input Tax Credit (ITC) available and the ITC reversals to arrive at the Net ITC:
- ITC Availability (whether in whole or partial): Mention the bifurcation of inward supplies on which ITC is being claimed. These details are needed to be considered:
a) Inward supply of Goods: Tax credit of IGST paid on the import of goods.
b) Import of Service: Tax credit of IGST paid on the import of services.
c) Imports liable to reverse charge: GST paid on inward supplies needs to be mentioned which are liable for reverse charges such as, sponsorship services. other than import of goods or services.
d) Inward Supplies from ISD: Input tax credit from Input Service Distributor (ISD).
e) Other ITC: Apart from the ones mentioned above, ITC of other inward supplies needs to be mentioned in this section.
- ITC to be reversed: ITC reversible on the usage needs to be mentioned for the goods and services used for non‐business purposes, or partly used for exempt supplies. In addition, if the deduction is claimed on taxable components of capital goods and machinery, then the ITC will not be allowed.
- ITC available as reported: When the amount of ITC is reversed, the resultant balance becomes ITC which is eligible for claiming.
- Ineligible ITC: GST paid on inward supplies filed as negative aren’t eligible for ITC.
6. Details of nil‐rated, exempt and non‐GST inward supplies: In this field, the value of imports pertaining to transactions with suppliers under the nil rated, composition scheme, Non-GST supplies, and exempt supplies need to be provided during the tax period.
7. Payment of tax: In this section, declaration of the self-ascertained tax payable has to be made. This is based on the details of export and import of supplies, liable to be paid on reverse charge. The tax-wise bifurcation of tax payment by utilization of ITC and cash deposit needs to be filled.
Frequently Asked Questions (FAQs) on GSTR 3B
- I have no sales or purchases for a particular month. Do I still need to file GSTR-3B?
Yes, even if no sales have been made for a particular month, GSTR-3B has to be filed by every registered person/business.
- Do I need to provide invoice-wise details while filing the return?
Only total monthly figures are required in GSTR-3B. An invoice-wise breakup is not needed.
- I have 2 GSTINs, one in Chandigarh and another in West Bengal. Can I file 1 GSTR-3B for both registrations?
No. GSTR-3B needs to be filed separately for every GSTIN. Returns cannot be clubbed together.
- Will there be any invoice verification in GSTR-3B?
Invoice verification isn’t conducted in GSTR-3B. This return is a self-declaration by the taxpayer.
- Do I need to file GSTR-1, GSTR-2, and GSTR-3 after filing GSTR-3B?
GSTR-1 has to be filed monthly or quarterly depending on the turnover of your business. Due dates and filing of GSTR-2 and GSTR-3 need to be filed separately, while you need to file GSTR-3B every month.