A Guide to GSTR-3B

What is GSTR-3B?

The Government of India has introduced GSTR-3B, a consolidated summary return of inward and outward supply, to ease the obligations for businesses that have recently switched to GST.

Since many small and medium-sized firms have relied on manual accounting techniques, it would have been challenging for many of these companies to file returns by the deadlines in July 2017. Therefore, tax payments from July 2017 to June 2018 were based on a simplified form known as the GSTR-3B.

Who needs to file GSTR-3B?

All taxpayers registered under GST, including those with nil returns, are eligible to file the GSTR-3B form. There are a few exceptions, though:

• Input services distributors and dealers in composition

• Suppliers of OIDAR ( Online Information Database Access and Retrieval Services)

• Non-resident taxpaying individual

Format of GSTR-3B

The general GSTR-3B form entails the following format:

1. GSTIN number

2. The legal name of the business

3. Details of sales and purchases for which you are accountable for reverse charge

4. Details of Inter-state sales made to buyers under the composition scheme, unregistered buyers, and UIN holders. 

5. Eligible input tax credit

6. Value of nil-rated, non-GST, and inward supplies

7. Interest rate and late fee

8. Tax payment

9. TCS or TDS credit

Prerequisites for filing GSTR-3B

The prerequisites for filing GSTR-3B are: 

1. Any entity required to file the GSTR-1, GSTR-2, and GSTR-3 monthly returns must submit the GSTR-3B form.

2. Through the GSTN portal, it is simple to file the GSTR-3B form online. Online payments or bank challans are two ways to pay the tax due.

3. To validate your return using an EVC (electronic verification code) or a digital signature certificate, you must either have an OTP from your registered phone. Aadhar-based e-signs are another option for filing GST returns.

How to file GSTR-3B?

Follow the steps below to file GSTR-3B:

Step 1: Log in to the GST Portal. On the home page, you will see the status of the last five tax periods' returns that have been filed.

Step 2:  Go to ‘Services’ and click on ‘Returns.’ Under the Returns option, click on  ‘Returns Dashboard.’

Step 3: The "File Returns" page appears. From the drop-down list, choose the "Financial Year" and "Return Filing Period" for which you want to file the return. Select "SEARCH" from the menu.

Note that if you file quarterly returns, you must also submit Form GSTR-3B for the year's last month. The form GSTR-3B tile won't work if you select the first or second month of the quarter.

Step 4: Select the "PREPARE ONLINE" button on the "Monthly Return GSTR-3B" tile.

Step 5: Select "NEXT" after responding to a series of questions. Choose yes in the first question if you want to file a "Nil" return. Then, proceed to step 10 to finish the filing.

Otherwise, select "Yes" or "No" for each question. As a result, the appropriate tables and fields must be made available for the next step's data entry.

Details from tables 3 and 4 that were automatically filled in from form GSTR-1 into form GSTR-3B are provided on this page. Then, click the "CLOSE" button to continue.

Step 6: Enter values into each shown tile as necessary. Under each heading, totals must be entered. Fill out Interest and Late Fees, if applicable.

The tab "SYSTEM GENERATED GSTR-3B" allows you to confirm the information automatically generated for GSTR-3B. Click that button to download and examine system-computed details from forms GSTR-1 and GSTR-2B in form GSTR-3B (monthly or quarterly). The auto-populated values can then be modified by the taxpayers if necessary. However, taxpayers are free to proceed with their filings using the revised amounts without any restrictions from the system.

The details in PDF are created monthly if you have chosen to file both GSTR-1 and GSTR-3B quarterly, filed GSTR-1, and have chosen to or not to file the IFF for the first two months of the quarter.

When filing a GSTR-3B return, one or more of the following details must be entered into the tiles:

1. A summary of the inbound and outbound supplies subject to a reverse charge with taxes Notably, only table 3.1(d) has data automatically pulled from GSTR-2B.

2. Information about interstate sales made to unregistered individuals, taxable composition individuals, UIN holders, and taxes must be entered in accordance with the location of the supply. Although this table's data is automatically generated from GSTR-1, it can still be changed later.

3. A summary of claimed eligible input tax credits reversed eligible input tax credits and ineligible input tax credits.

4. A summary of the inbound supplies that are exempt, nil, or not subject to GST and are either intra-state or inter-state supplies.

5. Information on Interest and Late Fees for IGST, CGST, SGST/UTGST, and Cess under each tax head. The system calculates the late charge based on the number of days since the filing deadline.

Step 7: When all the information has been entered, click the "SAVE GSTR-3B" button at the bottom of the page. Additionally, you can store the data input at any time by clicking the "SAVE GSTR3B" button on the GSTR-3B home page and making changes later.

A notification at the top of the page confirms the successful data saving.

Step 8: Once all the details are saved, the ‘SUBMIT’ button at the bottom of the page is enabled. The completed GSTR-3B return can be submitted by clicking the "SUBMIT" button.

At the top of the page is a success message. The newly inserted data is frozen once you submit the form. After this, no changes can be made to any fields.

Upon submission, the ITC and Liability ledgers will also be updated. The GSRT-3B's status will now read "Submitted."

Step 9: Go to the bottom of the page. Selecting "PREVIEW DRAFT GSTR-3B," you can view the draught GSTR-3B return. The 'Payment of Tax' tile will also be shown after the return has been successfully submitted. Follow these actions to pay the taxes and reduce your liability:

Select the "Tax Payment" tile.

The ledgers are updated to reflect the tax liabilities reported in the return and the credits and are recorded in the "Tax payable" column of the payment section. Credits are changed in the credit ledger, and the revised balance is visible when you hover over particular payment section headings.

Click the 'CHECK BALANCE' option to display the cash and credit balance. The taxpayers can use this functionality to check their account balance before paying the relevant minor heads.

To return to the previous page, click the "OK" button.

Enter the amount of credit used to pay off the liabilities from the available credit (in the different headings).

Please follow the credit utilisation guidelines when supplying the inputs; otherwise, the system won't permit the liability offset.

To settle the liabilities, click the 'OFFSET LIABILITY' option. It displays a confirmation message. Select "OK" from the menu.

Click the "CREATE CHALLAN" button if the cash balance in the Electronic Cash Ledger is less than what is required to pay off the liabilities.

Click the "MAKE PAYMENT/POST CREDIT TO LEDGER" button if the cash balance in the electronic cash ledger is greater than the amount required to pay off the liabilities.

Click the "MAKE PAYMENT/POST CREDIT TO LEDGER" button if the cash balance in the electronic cash ledger is more than the amount required to offset the obligations but offset is not permitted due to the ITC utilisation principle.

Select the declaration checkbox in step 10. The approved signatory should be chosen from the drop-down list labelled "Authorised Signatory." To file GSTR-3B with DSC or EVC, select the appropriate button.

Step 11: Select "PROCEED" from the menu.

A message is shown following a successful filing. Select "OK" from the menu.

The GSTR-3B return's status will now read "Filed." To examine the GSRT-3B result, click the 'VIEW GSRT-3B' button.