Compliance and reporting hold great significance in the world of taxation. India’s tax system dramatically changed in 2017 with the implementing the Goods and Services Tax (GST) regime. To preserve compliance and transparency, businesses must file different GST returns under this approach. GSTR-3B is one of these returns and is essential to simplifying the process of submitting GST. Regular taxpayers must file a Form GSTR-3B return, even if they want to participate in the QRMP system. Although it is a monthly summary return, QRMP taxpayers may file it once every three months.
We shall examine what is GSTR-3B, operation, and importance in the Indian tax system in this post.
What Do You Mean by GSTR 3B?
GSTR-3B means that it is a monthly self-declaration that registered dealers must submit alongside GSTR-1 and GSTR-2 forms. It serves as a consolidated summary of both incoming and outgoing supplies and was introduced by the Government of India to provide some relief to businesses transitioning into the GST system.
In simpler terms, GSTR-3B offers a simplified approach for declaring the summarized GST liabilities for a specific tax period. It’s important to understand that any revisions or amendments cannot be made to GSTR-3B. Dealers are required to file separate GSTR-3B returns for each of their GSTINs. Additionally, they must ensure the payment of the tax liability indicated in GSTR-3B by the deadline for filing this return, typically at the end of the same month.
All GST registrants, without exception, are obligated to file GSTR-3B returns, even if they have no taxable activity to report (referred to as ‘NIL’ returns). However, specific categories of registrants are exempt from filing this particular self-declaration. These exempt categories include:
- Suppliers of OIDAR (Online Information Database Access and Retrieval Services)
- Non-resident taxable individuals
- Input service distributors and composition dealers
- Small taxpayers
- Non-resident taxable individuals
Components of GSTR-3B
Part A – Tax Details:
- In this area, taxpayers must provide essential data such as the financial year for which the return is filed and their Goods and Services Tax Identification Number (GSTIN).
- In addition, the taxpayer must report all of their supplies—internal and outward—including those exempt, zero-rated, and not subject to GST.
Part B – Details of Tax Liability:
- Taxpayers determine their tax due on their supply in this section. They are required to give distinct information on the Union Territory GST (UTGST), State GST (SGST), and Central GST (CGST).
- This report includes adjustments such as the input tax credit (ITC). A taxpayer’s ability to claim an input tax credit (ITC) on taxes paid for goods and services utilised in their firm is known.
Part C – Details of Payment:
- Taxpayers must specify in this section how they intend to pay their tax due for the applicable tax period. They indicate how much is to be paid with ITC and how much, if any, has to be paid in cash.
- In this part, the net tax liability is also summarised and computed.
Part D – HSN-wise Summary of Outward Supplies:
- Taxpayers must provide the Harmonised System of Nomenclature (HSN) code based summary of outgoing supplies. This aids in comprehending the kind of products and services being offered.
Part E – Documents and Tax Payable:
- Taxpayers report the specifics of their owed taxes, the Internal Technology Credit (ITC), and any late fees, interest, or penalties in this area.
- This section also includes refunds and interest claims.
Part F – Late Fee and Interest:
- A taxpayer may declare the late charge and interest owed in this section if they failed to file their GSTR-3B return by the deadline.
Part G – Tax Paid:
- In this part, taxpayers are required to state the amount of tax paid. It contains information on the credit and cash used to make the payment.
Importance of GSTR-3B
GSTR-3B is essential for the GST system for a number of reasons.
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Interim Return
To enable companies to comply with the new GST system while the more extensive GSTR-1 and GSTR-2 forms were being simplified and implemented, GSTR-3B was established as an interim return.
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Simplified Compliance
The purpose of the return’s simplification is to make it simpler for taxpayers to comprehend and correctly complete their tax returns. Businesses now have less of a regulatory burden as a result.
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Timely Reporting
The monthly filing requirement for GSTR-3B guarantees regular and prompt reporting of tax-related data. In turn, this facilitates effective tax revenue collection for the government.
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Payment of Tax
It enables tax payments and acts as a statement of the taxpayer’s tax burden. Ensuring that companies pay their debts on time helps the nation’s tax collection.
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Input Tax Credit (ITC) Claims
Taxpayers who have paid taxes on inputs and services are eligible to claim the ITC. The smooth adjustment of ITC against tax obligations is made possible by GSTR-3B.
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Transparency and Accountability
Businesses are held responsible for their tax payments, and tax reporting is made more transparent by the frequent filing of GSTR-3B forms.
Filing GSTR-3B: The Process
Although filing GSTR-3B is simple, it’s important to ensure appropriate reporting is done and the deadlines are met. Here is a detailed guide to filing GSTR-3B:
- The GST portal requires taxpayers to sign in with their GSTIN and password.
- To access GSTR-3B, navigate to ‘Returns’ under the ‘Services’ page, then choose ‘GSTR-3B’.
- Decide on the tax period and financial year for which you wish to file the return.
- Fill out the GSTR-3B form, including all required fields for your payments, taxes, and supplies.
- Verify again that all the information submitted is accurate and complies with GST requirements.
- Click “Submit” once you’ve verified. You won’t be able to edit it after it’s submitted.
- Following submission, the tax liability will be shown to you. As your Part C statement states, pay the taxes owed in cash or via ITC.
- You can file the return using a digital signature or an Electronic Verification Code (EVC). A one-time password known as an EVC is texted to the registered cellphone number.
- Following filing, you’ll get a reference number as an acknowledgment. It is best to keep this acknowledgment on file for further use.
When to File GSTR 3B?
The 20th day of the subsequent month is the deadline for filing the monthly form GSTR-3B. For example, the deadline for submitting GSTR 3B for November 2019 was December 20, 2019.
Additionally, taxpayers need to be aware of the following:
- In addition to paying a late fee of Rs 50 per day of delay, late filing of GSTR-3B results in interest charges of 18% per year on the amount of tax owed.
- Even if they file GSTR-1 quarterly, they still need to pay taxes and file GSTR-3B every month.
- They will incur interest and late fines even if they are able to pay taxes by the deadline but file their GSTR-3B after it has passed.
Remarkably, the late charge amount is determined by the number of days that taxpayers fail to pay. There is a late fine of Rs. 20 for taxpayers without tax due for a given month.
Due Dates for Filing GSTR-3B
Knowing when GSTR-3B filing deadlines are approaching is essential to timely compliance. Usually, the deadline falls on the twentieth of the subsequent month. The GSTR-3B for the month of October, for instance, must be submitted by November 20. It’s best to visit the official GST portal or speak with a tax expert for the most recent due dates, as they are subject to change.
Late Filing and Penalties
Interest and late fee for GSTR 3B may be levied for filings submitted after the deadline. For Central and State taxes, the late charge for a delayed filing is usually fifty rupees every day of delay, for a total of one hundred rupees per day. Typically, this charge is limited to Rs. 5,000.
Interest is levied on the unpaid tax amount in addition to late costs. Depending on the reason for the delay and the taxpayer category, the interest rate may change. It is essential to be mindful of these fees and fines to prevent needless financial strain.
Conclusion
A vital part of India’s Goods and Services Tax (GST) system, GSTR-3B meaning is intended to make tax filing easier and guarantee accurate and timely reporting of tax liabilities. It is essential for encouraging openness, expediting tax compliance, and empowering companies to claim input tax credits successfully.
Businesses may navigate the GST system more effectively and avoid fines for late or inaccurate filing by being aware of the parts of the GSTR-3B and how to file it. GSTR-3B is a crucial component of India’s tax system, as successful GST compliance in the nation depends on being informed and meeting deadlines.
FAQs
Q1. What is GSTR 3B?
GSTR 3B is a simplified monthly tax return summarizing your outward and inward supplies, tax liability, and payments made. It needs to be filed by the 20th of next month.
Q2. Who needs to file GSTR 3B?
All regular GST registered businesses have to file GSTR 3B monthly, except for those who have opted for the Composition Scheme.
Q3. What details need to be furnished in GSTR 3B?
It includes your outward & inward supply summary, eligible & ineligible ITC, values of exempt, nil-rated, non-GST supplies and your tax liability for the month.
Q4. How is GSTR 3B different from GSTR 1?
GSTR 1 has just your outward supply invoices. GSTR 3B includes inward supplies and input tax credit for your net tax liability.
Q5. Do I need to provide invoice-wise details in GSTR 3B?
No, only summary values of various sales, purchases and ITC must be provided in GSTR 3B. No invoice-level details required.
Q6. What are the key points to remember while filing GSTR 3B?
Ensure all auto-drafted values are correct, report accurate input tax credit, enter tax liability, fill all mandatory fields and reconcile with books of accounts.
Q7. When does the tax payment need to be made?
Tax payment date is generally 20th of next month. Delayed filing attracts late fees.
Q8. How do I revise a filed GSTR 3B?
You can revise GSTR 3B of a particular month in the next month’s GSTR 3B. Revisions can be done multiple times.