GSTR-3 is a monthly return that needs to be filed by registered taxpayers under the GST Regime. It requires the details of all inward and outward supplies made during the month. It is a summary of all inward and outward supplies made during the tax period along with the input tax credit availed and the tax liability. It serves as a consolidated statement for taxpayers to declare their GST liabilities. Here we have explained the various components of GSTR-3 return, including details of the taxpayer, details provided in GSTR-3 and prerequisites for it.
GSTR-3 is a GST Return that includes information on all transactions made throughout the month, including stock transfers between states, sales, and purchases. This return is automatically prepared based on the data in the GSTR-1 and GSTR-2 filed for the same tax period.
All GST-registered taxpayers who have chosen neither the composition scheme nor a Unique Identification Number must submit this return (UIN). Non-resident taxpayers are also not eligible to file this return.
Regardless of whether there were any transactions during the month or not, every registered individual is required to file GSTR-3. However, specific registered individuals are exempt from submitting GSTR-3:
Since the form is automatically generated and has limited room for amendments, it is impossible to make changes after the GSTR 3 filing is complete. If there are any changes or errors, these can be corrected in the GSTR 1 and GSTR 2 forms for the next month.
For the months of July and August 2017, the CBEC adopted GSTR 3B, a straightforward return form. Additionally, GSTR-3 forms must be submitted for July and August 2017. If actual liabilities differ from those stated in GSTR 3B when GSTR 3 is filed, the system will automatically update the (difference) between GSTR 3B and GSTR 3. If the actual liabilities reported in GSTR-3 are greater than those reported and paid using GSTR-3B, you will be required to pay the difference in tax and interest.
Missing the GSTR 3 filing deadline might have significant consequences. The taxpayers won’t be able to file the GSTR 1 form if they don’t file the GSTR 3 for a month. Following that, the taxpayer will face fines and penalties.
If there is a delay in submitting the GSTR 3 returns, the taxpayers will be responsible for paying a late fee with an interest of 18% per year. The taxpayer will determine the ultimate sum based on the entire amount still owing that must be paid. The period is from the following day or the 16th of the month until the payment date.
Each Act will incur a late fee of Rs. 100 per day. According to this, the late cost is implied to be Rs. 100 for CGST and Rs. 100 for SGST, for a total of Rs. 200 per day. The most that can be levied as a late fee is Rs. 5000. IGST, however, does not impose late fees.
The following are the prerequisites for filing GSTR-3:
After filing GSTR-1 and GSTR-2 returns, GSTR-3 return is submitted. Most of the data required for the returns will be pre-populated depending on the submission of GSTR-1 and GSTR-2. Only a small portion of the data will require taxpayer verification, editing, or addition.
If you don’t already have one, you can use your provisional ID as your GSTIN.
The taxpayer’s legal and business names (will be auto-populated). Mention the month and year that GSTR-3 is being filed for.
GSTR-3 consists of two sections. GSTR-1, GSTR-1A, and GSTR-2 automatically fill out Part A, whereas Part B needs to be filled out by hand.
The overall turnover of all types of supplies will be included in this section. The division of total turnover will be between:
This heading will include an overview of all of your monthly sales. The data will be automatically retrieved from your GSTR-1.
Inter State Supplies (Net Supply for the month)
All interstate sales will be listed under this section with the following information.
Total sales excluding those to which reverse charge applies and exports; taxable supplies (other than zero-rated and reverse charge supplies).
Services attracting a reverse charge-tax that the service recipient must pay: These are purchases your customer will make using the reverse charge for GST.
Exports paid for by IGST are considered zero-rated supplies (later reclaimed as a refund).
The supplied value through an e-commerce operator enticing TCS-(rate-wise) out of the supplies listed under a will includes the proportion of sales made through e-commerce. Additionally, the e-commerce operator’s GSTIN will be shown.
Similar to the previous heading, but with information on intra-state sales instead.
The modifications to your sales invoice will be included in this. If the sum varies, the ITC to be also claimed changes, which affects the amount of tax that must be paid to the government. It could lead to overpayment or underpayment. This section’s data aids in keeping track of invoices that have had changes made to them as well as how those changes have affected the tax amount.
Inward supplies are subject to the reverse charge, including services imported (Net of advance adjustments)
Your monthly purchases and received supplies will be included under this heading. The data that you have entered under the GSTR-2 will be used to pull the information from your records automatically.
Inward supplies on which tax is payable on a reverse charge basis:
Your purchases that qualify for reverse charge are included in this (you, the buyer, will pay GST). Here, both intra-state and interstate sales are listed. Net of invoices, debit/credit notes, advances paid, and revisions of advances, the tax liability resulting from the reverse charge
Tax effect of amendments in respect of supplies attracting reverse charge:
This will include any alterations to your purchases that result in a reversal charge. If the amount changes, the ITC amount will also change, which will alter the tax due. It could lead to overpayment or underpayment. This section’s data aids in keeping track of invoices that have had changes made to them as well as how those changes have affected the tax amount.
ITC on inward taxable supplies, including imports and ITC, received from ISD (Net of debit notes/credit notes)
You will have access to a monthly overview of ITC under this title. ITC will be displayed independently for:
This page will also display the ITC received from Input Service Distributor (ISD). After changing the debit and credit notes, ITC will be displayed.
This section will mention the updates to the earlier month’s details and how they affected the ITC.
The ITC and tax liability discrepancies between the initial returns and any modifications submitted this month will be included in this section. This data will be obtained from GSTR-2.
This section is the most important since the GST Portal will use it to determine your tax liability under the various CGST, SGST, and IGST tax heads. It will display the split as follows:
The TDS and TCS information that you paid will be listed under this section. To determine the net tax amount you must pay, the TDS/TCS amounts will be subtracted from the total amount of responsibility.
The total amount of interest you owe the government for various reasons (mismatches in tax liability, ITC claimed, ITC reversal or delay in tax payments or filing returns).
Any late fees under various tax heads must be paid (central, state and union territory GST).
You must enter the proper amounts in the correct columns.
If your tax liability is Rs. 30,000 and your ITC is Rs. 10,000, for instance, you can choose to pay Rs. 20,000 in cash and Rs. 10,000 through ITC.
The amount due and the amount paid for interest, late fees, and the breakdown of tax headings should be included here. The IGST has no late fees.
If it is determined that the tax paid was higher than the actual amount, you will receive a refund for the difference.
This section is auto-populated once taxes are paid and returns are submitted.
Last, you must sign and validate GSTR-3 return before filing it, either using a digital signature certificate (DSC) or an Aadhar-based signature verification process.
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