What is GST Nil Return?
Nil GSTR-1 return must be filed by all registered taxpayers compulsorily when there are no sales or supplies during the month or quarter. This guide provides a detailed overview of the Nil return filing process, including the requirements and procedure for filing and the consequences of not filing a NILreturn. It also discusses the importance of maintaining accurate records and the implications of non-compliance with GST regulations. By following the guidelines provided in this guide, taxpayers can ensure the timely and accurate filing of their Nil returns and avoid penalties for non-compliance. Overall, this guide is useful for businesses seeking to maintain GST compliance and avoid potential issues.
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How to file Nil GSTR-1 Return?
Below is a step-by-step guide to filing a Nil GSTR-1 return:
Step 1: Log in to the GST Portal.
Step 2: In the drop-down, go to Services and select the returns dashboard
Step 3: from the drop-down, select the month and year of the filing.
Step 4: Under the GSTR-1 tile, select Prepare Online
Step 5: Select Generate GSTR-1 summary
Step 6: Select the checkbox and click on Preview.
Step 7: Finally, click Submit, and then you can file your return using either DSC or EVC.
Depending on your selection, click “File GSTR-1 with DSC” or “File GSTR-1 with EVC” to submit your Nil GSTR-1. An acknowledgement reference number indicating the return has been filed will be shown once submitted.
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Why Is It Necessary to File a Nil GST Return?
A registered GST dealer must submit a nil return if no outward taxable supplies were made during the month for which the return is being prepared.
A registered taxpayer must fill out several details about his tax liability and outward supplies in filings like GSTR-3B and GSTR-1. However, a person with no sales does not need to fill out all of the information that a typical taxpayer would submit with regard to his returns on the GSTN Network.
Who needs to submit a Nil GSTR-1?
Even if there is no business activity, such as monthly or quarterly sales, taxpayers must submit a GSTR-1 form. Under these circumstances, a dealer must file a Nil GSTR-1. All taxable and exempt items are included in the outward supplies.
Benefits Of Filing NIL GST Return On BUSY
Below are some of the benefits of filing NIL GST return on BUSY
- Compliance: Filing a Nil GST return ensures that the business complies with GST regulations, even when there is no activity or transaction to reporting.
- Avoid Penalties: Non-filing of a Nil return may attract penalties, and filing a Nil return helps avoid such penalties.
- Maintain Records: Filing Nil returns helps maintain accurate records and prevents any discrepancies in the future.
- Easy Transition: Regular filing of Nil returns makes the transition to regular return filing much smoother when the business becomes operational.
- Credit Continuity: Filing Nil returns helps maintain the continuity of Input Tax Credit (ITC), which can be crucial for businesses when they start operating again after a period of inactivity.
- Reputation: Maintaining a good compliance record by regularly filing Nil returns can enhance the business’s reputation among stakeholders and lenders.
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Can One Avoid Filing Nil ITR?
Filing a Nil Income Tax Return (ITR) is not mandatory if your total income is below the basic exemption limit after applying eligible deductions. However, voluntarily filing a Nil ITR can be beneficial. It helps maintain a financial record, supports loan or visa applications, allows you to claim refunds for any excess TDS, and enables you to carry forward certain losses. Even if there is no tax liability, filing a Nil ITR reflects financial discipline and may simplify future compliance or documentation requirements.
GST Return Due Dates in India
GST returns must be filed periodically to report sales, purchases, and tax liability. The key due dates for GST returns in India are:
- GSTR-1:
- Monthly return for outward supplies.
- Due Date: 11th of the following month (for taxpayers with turnover above ₹5 crore).
- Quarterly for small taxpayers (under the QRMP scheme): 13th of the month following the quarter.
- GSTR-3B:
- Monthly summary return for tax payment.
- Due Date: 20th of the following month (staggered deadlines based on state).
- Quarterly for QRMP taxpayers: 22nd or 24th of the following month after the quarter.
- GSTR-9:
- Annual return summarizing yearly transactions.
- Due Date: 31st December of the following financial year.
- GSTR-4:
- Annual return for composition scheme taxpayers.
- Due Date: 30th April of the following financial year.
Timely filing ensures compliance, avoids penalties, and facilitates input tax credit claims. Taxpayers should use automated tools or accounting software for reminders and accurate filing.
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Common Errors When Filing Nil GSTR-1 via SMS
Filing Nil GSTR-1 through SMS is a convenient option for small taxpayers who have not made any outward supplies in a tax period. However, several common mistakes can lead to rejection or failure of the SMS filing process.
Frequent Mistakes to Watch Out For:
- Incorrect SMS Format: Using the wrong syntax while composing the SMS (e.g., missing spaces, incorrect keywords, or wrong return period format) will result in an invalid request.
- Wrong GSTIN: Entering an incorrect or incomplete GSTIN can cause the system to reject the filing. Always double-check the 15-digit GSTIN before sending.
- Unregistered Mobile Number: Only the mobile number registered on the GST portal (linked to the authorized signatory) is allowed to file returns via SMS. Using any other number will lead to an error.
- Taxpayer Not Eligible for Nil Return: SMS filing is allowed only if there are absolutely no outward supplies, amendments, or credit/debit notes for the period. If even one transaction exists, SMS-based Nil return is not permitted.
- Incorrect Return Period Format: The return period in the SMS must follow the correct YYYYMM format (e.g., 202504 for April 2025). Mistakes in this can invalidate the request.
Conclusion
How to fill nil GST returns is an essential compliance requirement for all registered taxpayers under the GST system. It ensures that the tax authorities know the taxpayer has not made any taxable supplies during the given tax period. Failing to file a Nil Return can result in penalties and legal consequences. Therefore, taxpayers should ensure that they file their Nil Returns promptly and accurately, even if they have not made any taxable supplies. This will not only help them avoid any legal implications but also contribute towards a smooth and efficient GST system.
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I am a Chartered Accountant with over 20 years of experience and a finance content writer. I focus on educating people about finance and taxation. I have written many blog posts on finance, taxation, trading, and investment on the BUSY website. My goal is to increase financial understanding by making complex concepts easier to grasp and to support educational programs in India.
Frequently Asked Questions
- Is nil return required under GST?Yes, even if there are no transactions, taxpayers must file nil returns to avoid penalties and maintain compliance.
- Do I have to file Nil GSTR-3B return?Yes, GSTR-3B must be filed even if there are no sales, purchases, or tax liabilities for the month.
- Do I have to file Nil GSTR-1 return?Yes, if no outward supplies are made during the period, a nil GSTR-1 return must be filed.
- Do I have to file Nil GSTR-2 return?No, GSTR-2 is currently suspended, so there’s no requirement to file a nil return.
- Do I have to file Nil GSTR-3 return?No, GSTR-3 is also suspended, so there’s no requirement to file a nil return.
