GSTR-3 Filing: GSTR -3 Monthly Compliance

Ashish M. Shaji

26 Oct, 2020

After successful GST Registration, every taxpayer is required to do GSTR-3 filing by 20^th day of the following month under the GST Act. GSTR-3 will contain complete detail of inward and outward supplies made in a month.

GST Monthly Compliance – GSTR-3 Filing (Monthly Return)

In our previous article, we have discussed the GSTR-1 for detail of outward supply and also discussed GSTR-2 detail of inward supply under the GST Act. Now, we need to learn about the GSTR-3 filing.

GSTR-3 is combined return of sales and purchase. Every normal taxpayer registered under the GST Act requires filing monthly GSTR-3 by 20^th of the following month. It would automatically capture the aggregate level of outward and inward supply data from GST Portal which will be auto-populated through earlier filled GSTR-1 and GSTR-2.

In GST regime, GST will create ITC Ledger, cash ledger and Tax liability ledger would be updated in real time basis. During the filing of tax returns, the tax payment against tax heads like CGST, SGST/UGST, IGST and Additional tax shall be populated from cash/ Credit ledger. Separate liability ledger has to be maintained for a penalty or late payment or interest payment under the GST Act.

GSTR-3 Filing: Who should file GSTR-3?

All registered person must file this type of form regardless of whether there is any transactions during the month or not.

 However, it may be noted that the following persons are exempted:

• Input Service Distributors;
• Non-Resident Taxable person;
• Composition Dealer;
• Person liable to deduct TDS;
• Person liable to collect TCS.

Key Components for GSTR-3 Filing 

• GSTIN – Each registered taxpayer will have a 15-digit pan based GST no. This will be used while filing monthly returns.
• Name of registered Taxable Person: – Name of the registered taxpayer will auto-populated from Portal.
• Registered Address – Business address of the registered taxable person in the state will get auto-populated in GSTR-3.
• Period of Tax returns – While filing tax returns, a taxable person has to select the return period from the drop-down option.
• Turnover Details – Under this heading the taxable person has to provide a breakdown of all type of supply made in a month.

1. Taxable Turnover
2. 0% rated and Exempted Turnover
3. Export Turnover
4. Non-GST Turnover
5. Total Turnover (Including all)

• Details of Outward Supplies- In the GSTR-3 detail of outward supplies shall be auto-populated from GSTR-1 and there are headings which a taxpayer should review before the filing of monthly returns. Separate details of goods and services have to be provided:

1. IGST Supplies of goods to Registered Taxable Person
2. CGST Supplies to Registered Taxable Person
3. Inter-stateB2C supplies
4. Intra-State B2C supplies
5. Exports (including deemed export)
6. Details of Credit note or debit note
7. Total Tax Liability on Outward Supplies of goods or services

• Inward Supplies- In GSTR-3, every registered person is required to verify the detail of inward supplies in a month. The detail of the input supply shall be auto-populated from GSTR-2. Following heads of inward supply has to be verified by the registered taxpayer.

1. IGST domestic Supplies Received
2. CGST Supplies Received
3. Imports of goods (IGST)
4. Credit Notes or Debit Notes for revision in purchase
5. Total Tax Liability on Inward Supplies on Reverse Charge
6. ITC Reversal

• Total Tax Liability for the month –In the GST filing system, once Outward and inward supplies are verified system will automatically calculate the tax liability under different head like CGST, SGST & ISGT for both goods and service separately.

• TDS credit received during the month – Whatever TDS credit available of a previous month shall be auto-populated from GSTR-2.
• TCS credit received during the month – In case taxable person is a merchant^[1] working with E-commerce marketplace sellers then TCS collected by E-commerce operator shall be auto-populated from GSTR.
• ITC received during the month – System will calculate a total amount of Input tax credit available for Set-off or C/f.
•  Tax, Interest, Late Fee and Penalty Paid – In this head system will calculate Separate liability for IGST, CGST& SGST. Based on tax payment considering other factors of GST Return system will calculate Interest and late penalty, if any, similar to the current income tax return (ITR-6).The taxable person has the option to debit cash ledge or credit ledger tax liability under any heads after set-off of an available input tax credit.
• Refunds Claimed from Cash Ledger – In some case, an input tax credit will be higher than output tax liability, in such circumstances a taxpayer can claim a refund of amount showing in this header. After submitting the necessary details correctly, a taxpayer has to sign return digitally or by Aadhar verification system.
• Proper posting of Tax amount in the books of Accounts – A taxpayer has to ensure that proper posting of outward and inward supplies have been made in the books of account. Corresponding Input tax ledger, Cash Ledger & output tax ledger of the taxpayer has to be maintained in the books of accounts of the taxpayer.

Note: As per the decision taken in 23rd GST Council Meeting, currently GSTR-3 filing is suspended until any further notice from the department.

Conclusion

It may be noted that once GSTR-3 is filed, it can’t be revised. In case of any mistake in the GSTR-3 filing, then it may be revised in the next months’ GSTR-1 and GSTR-2.

Read our article: GST for Companies under CIRP as per IBC, 2016