GST Returns

GSTR 6: Return Filing, Format, Eligibility and Rules

With digitization of the entire process, taxpayers now have access to online modes to file their returns, and everything is just a click away. The auto-population of data has further made it easier for suppliers and receivers to furnish details of commercial transactions. To further streamline the entire return filing process and lower the compliance burden, the authorities have formulated various forms. These forms are required to be filed by taxpayers within the stipulated time to avoid penalties or any adverse consequences. One such form is GSTR-6, which has been mandated to be filed by taxpayers who are registered as Input Service Distributors. In this article, we will briefly highlight who these Input Service Distributors are and further delve into the procedural technicalities and issues involved while filing form GSTR-6.

GSTR-6

GSTR-6 is a monthly return filed by every Input Service Distributor who has registered under the GST and encompasses in it the details of invoices that essentially pertain to the details of inward supplies received from other registered taxpayers under the GST and the details of the manner of Input Tax Credit (ITC) disbursed. It is furnished after amending, correcting, and modifying the details provided in GSTR-6A.

Purpose of GSTR-6

GSTR-6 is an essential form while filing returns as it contains detailed information regarding the distribution of Input Tax Credits. It further contains the details of the tax invoices on which such input tax credit has been received, which helps to keep track of the ITC so disbursed.

NIL GSTR-6

In case no business transaction has been recorded by the registered entity during a particular month, then, in that case, such a service distributor is required to file a NIL GSTR-6.

Who is required to file GSTR-6?

GSTR-6 is a monthly return that is required to be filed by every taxpayer registered as an Input Service Distributor (ISD) under GST, barring the following:

• Taxpayers registered under the Composition Scheme
• Non-Resident Taxable Persons
• Persons responsible for Tax Collection at Source (TCS)
• Persons responsible for Tax Deduction at Source (TDS)
• Suppliers of Online Information and Database Access or Retrieval Services (OIDAR), who are responsible for directly remitting taxes according to Section 14 of the IGST Act.

Input Service Distributor

Before discussing the technicalities of GSTR-6, let us also have a look at who is an Input Service Distributor (ISD). The concept of ISD was very much in existence even before the advent of GST. It is an old concept that existed under the Service Tax Regime and thereafter was adopted under the GST regime as well. An Input Service Distributor is a type of taxpayer under GST who receives tax invoices for the receipt of input services and is responsible for distributing the Input Tax Credit (ITC) to the branch offices.

Definition under the law

Input Service Distributor has been defined u/s 2(61) of CGST Act as under:

“Input Service Distributor” means an office of the supplier of goods or services or both that receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office”.

In simpler words, it distributes the tax paid to the branches of the same business on a proportional basis by issuing an ISD Invoice. These branches may have different GSTINs, but they must have the same PAN. For the purpose of distributing ITC, an ISD has to issue an ISD Invoice as specified by Rule 54 of the CGST Rules, 2017. The purpose of an ISD is to simplify the entire credit-taking process and further the seamless flow of credit. An ISD is required to file monthly returns in the form of GSTR-6.

Registering ISD under GST

An Input Service Distributor is required to register under the GST as ISD is a distinct office and it exists merely to distribute the input tax credit to one or more units or branches of the same business. It is a facility for businesses having a large share of common expenditures and where payments are made using a centralized location. Therefore, apart from registering as a taxpayer under GST, an ISD is also required to register as an “ISD”, and then only they will be able to distribute the input tax credit.

Mandatory Requirements for Filing GSTR-6

In order to file GSTR-6, the following requirements must be met:

• The taxpayer must be registered as an ISD under the GST.
• The taxpayer must have a valid GSTIN.
• The return must be filed by an ISD.
• The non-resident taxpayers are exempted from the mandate of this form.
• The business must have a turnover of at least Rs. 20 Lakhs.
• All purchases made on behalf of the business and its branches must be documented.
• It must be noted that Credit Distribution of services is possible only through this form.
• The ISD is required to furnish a valid credit distribution document in order to facilitate credit distribution.

Due Date for Filing GSTR-6

The due date for filing GSTR-6 is within 13 days after the end of the month of the taxation period.

Consequences for the delay in filing GSTR-5A

A delay in filing of GSTR-6 attracts adverse consequences and the following pecuniary penalties (which now has been reduced):

Type of Return	Penalty
Normal Return	Rs. 50/ day
NIL Return	No Penalty

Revision of GSTR-6

GSTR-6, once filed, cannot be revised, and any error or mistake made in such a return can only be corrected in the GSTR-6 of the following month.

A step-by-step guide to file GSTR-06

In order to file GSTR-6, the registered ISD may undertake the following steps:

• Log in to the GST Portal¹ by entering your credentials.
• Navigate to “Services” and Click on “Returns”.
• Click on “Return Dashboard”
• Enter the relevant Financial Year from the drop-down menu for which GSTR-6 is required.
• Once the relevant financial year is selected, choose the relevant return filing period for which the GSTR-6 has to be filed and eventually click on “Search.”
• A “Return for Input Service Distributor GSTR-6” tile will be displayed on the screen; click “Prepare Online.”
• At the bottom of the page, click on “Generate GSTR-6 Summary”. This will auto-populate the details of GSTR-6A in GSTR-6 Return.
• After this, click on the tile titled ” Input Tax Credit received for distribution”, where a list of vendors from whom the ISD has made purchases will be displayed to you.
• Click on each such vendor to verify the invoice details. You are also allowed to accept, modify, or reject the invoices.
• As a next step, click on the title titled “Total ITC available and Eligible ITC Ineligible /ITC distributed”. Click on “Calculate ITC”, and the total eligible and ineligible ITC will be displayed to you.
• Next, click on tile 5 “Distribution of Input Tax Credit of ISD Invoices & Credit Notes”, navigate to “Add Documents,” and enter the required information.
• Post this simply Preview and Submit the return. The status will change to “Filed” after the return has been filed successfully.

Details to be provided in GSTR-6

The government authorities have clearly prescribed GSTR-6 format, and it mainly consists of 11 distinct sections, which are required to be filed as follows:

Section	Details to be provided
GSTIN Submission	As a taxpayer, you are required to provide your PAN-based 15-digit GSTIN.
Particulars of the taxpayer and Month and Year (period)	The particulars of the registered taxpayer are to be provided here, which includes the legal name and trade name, if any. This also gets auto-populated when you file the return.The taxpayer must choose the month and year from the drop-down menu to select the tax period for which the return is being filed.
Details Of Input Credit Received	The details pertaining to the inward supplies get auto–populated from the corresponding GSTR-1 and GSTR-5. This contains details of inputs received to be distributed as ITC.
Total ITC or Eligible ITC or Ineligible ITC to be dispersed for the tax period.	The details of the total ITC which is to be dispersed by the ISD shall be further classified into the total amount of eligible ITC and ineligible ITC. This information may also get auto-populated.
Dispersal of input tax credit reported in Table 4	The ISD is required to report in detail the entire ITC, which is dispersed to the various units under various heads of CGST, SGST, and IGST, as this information will help the dealer to whom the credit is distributed to claim ITC.
Amendments in the information furnished in earlier returns in Table No. 3	In case a mistake is made in the invoices for inward supplies, that can be modified and corrected here. Thus, the details of the changes made are to be provided here.
Input tax credit miss-matches and reclaims to be distributed in the tax period	In case of a mismatch or reclaim of ITC on modification of such mismatch, any required changes, adjustments, or modifications can be made here.
The distribution of input tax credit reported in Tables No. 6 and 7	If any changes are required to be made to the amount of credit dispersed to dealers, on the basis of information provided in Table 6 or 7, such changes can be made here.
Redistribution of ITC distributed to the wrong recipient	In case any improper and incorrect dispersal of ITC has occurred in the previous returns, such details can be mentioned here.
Late Fees	Late Fee, if any, for the delay in filing of the return by the taxpayer is to be entered here.
Refund claimed from electronic cash ledger.	The details of the refund to be claimed from the electronic cash ledger are to be provided here.

In the end, the ISD is required to sign the form electronically to declare that the information furnished by it is correct and true to its knowledge.

Conclusion

GSTR-6 is an essential document required to be furnished by the Input Service distributors on a monthly basis. It further contains the details of the tax invoices on which such input tax credit has been received. It furnishes an overall detail of the Input Tax Credit distributed to the various branches of the same business. They may have different GSTINs, but they must have the same PAN. Thus, in order to be able to file the return and GSTR-6, such an ISD is required to get registered under the GST separately mandatorily, and there is a threshold limit for such registration. It must be noted that there is no provision for modifying the GSTR-6 so filed, so due diligence and proper care must be exercised while filing GSTR-6. With auto-population, the concerned authorities have attempted to make the return filing process seamless for taxpayers; however, if you are still caught in the web of intricate web taxation, you may take expert advice or hire professional help.

If you wish to know anything regarding GST Returns, then you may contact Enterslice.

FAQs:

1. https://www.gst.gov.in/