What is GSTR-3?
GSTR-3 is a monthly return with the summarized details of sales, purchases, sales during the month as well as the amount of tax liability under GST. This return is auto-generated pulling information from GSTR-1 (filed by the seller) and GSTR-2(filed by buyer).
Who needs to file GSTR-3?
All the regular taxpayers who are registered under GST regime need to file GSTR-3 along with information of inward and outward supplies. But if the person comes under composition scheme of GST regime, then the person will file the GSTR-3 after 18 days after of each such quarter.
What happens if GSTR-3 is not filed?
If GSTR-3 return is not filed then the GSTR-1 of the next month cannot be filed. Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty.
How will GSTR-3 and GSTR-3B be reconciled?
GSTR 3B is a simple return form introduced by the CBEC for the month of July and August 2017. Whereas GSTR-3 will also have to be filed for July and August 2017.
On filing the GSTR 3, if actual liabilities are different from those declared in GSTR 3B, the system will update the (difference) between GSTR 3B and GSTR 3 automatically. In case, actual liabilities in GSTR-3 are higher than those declared and paid with GSTR-3B, you will have to pay the extra amount tax along with interest on the extra amount.
GSTIN and Name of the Entity
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.
PART A (entirely auto-populated)
This section will consist of details of turnover of all types of supplies. Turnover from exempted, nil rated, and Non-GST supplies also needs to be reported here.
- Taxable Turnover [other than zero rated];- It includes regular sales to registered as well as unregistered buyers.
- 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 supply without payment of tax: This will include exports made under a bond or letter of undertaking.
- Deemed exports: Supplies to Special Economic Zones (SEZs) are deemed as exports.
- Exempted goods and services: These are not chargeable to GST. Turnover from a supply of such items is reported here.
- Nil Rated: These are goods/services items which are chargeable to zero rates of tax.
- Non-GST supply: These are items like petrol, electricity which are outside the scope of GST.
- Outward supplies
This heading will contain the summary of all your sales during the month. The information will be pulled automatically from your GSTR-1.
4.1 Inter-State supplies (Net Supply for the month)
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 affecting through an E-commerce operator collecting tax at source.
4.2 Intra-State Net Supplies
Details displayed in this section is similar to above heading. The only difference is that this will contain details of intra-state sales supplies.
4.3 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. If the amount is changed, the amount of Input Tax Credit to claim also changes which impacts the tax payable to the government.It may result in excess or underpayment. In both cases, it is important to keep track of invoices on which changes have been made and the impact of the change on the tax amount.
- Inward supplies attracting reverse charge including import of services (Net of advance adjustments)
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
This heading will have a summary of ITC from inputs, input services, and capital goods.
Inputs– Your raw materials
Input Services– Such as consulting fees
Capital Goods– Such as laptop
It reflects changes made to details furnished in earlier returns and their effect on ITC.
- Addition and reduction of amount in output tax for mismatch and other reasons
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 is the main portion of GST Portal will calculate your tax liability there are different tax heads of CGST, SGST & IGST
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
- Credit of TDS and TCS
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.
- Interest liability (Interest as on ..)
If you did not pay your tax on time, interest at the rate of 18 % per annum. It has to be calculated by the taxpayer on the amount of outstanding tax.Interest will be chargeable from the next day of filling (20th of every month) 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.
- Late Fee:-
This section displays any late fee applicable on late filing of GST Returns. The late fee is Rs. 100 per day. The maximum is Rs. 5,000.
This part will be filled up by the taxpayer. Part A is shown automatically by the GST Portal
- Tax payable and paid
You will fill up the appropriate columns with the appropriate amounts.
For example, if you have a tax liability of Rs. 30,000 and ITC of Rs. 10,000, you can opt to pay Rs. 20,000 in cash (fill up col 3) and Rs. 10,000 through ITC (fill up the appropriate columns under 4,5,6.
- Interest, Late Fee and any other amount (other than tax) payable and paid
Here, you will fill in the amount paid under interest and the amount payable, late fee with the breakup of tax heads.
Note: There is no late fee for IGST.
- Refund claimed from Electronic cash ledger
If it is found that the tax paid is higher than the actual amount then the difference will be refunded to you.
Refund from cash ledger can only be claimed only when all return related liabilities for the month have been discharged.
Refund claimed Table 14 will result in a debit entry in electronic cash ledger on the filing of valid GSTR 3.
- Debit entries in electronic cash/Credit ledger for tax/interest payment [to be populated after payment of tax and submissions of return]
This section will be automatically filled in when you pay taxes and submit your returns.
Finally, sign off with a declaration that all information has been supplied and is correct.