GSTR-3B- A Comprehensive Overview for Taxpayers
A registered dealer must file Goods and Services Tax (GST) returns under the GST Act. The return should include the purchases, sales, input tax credit (GST paid on purchases), and output GST (GST collected on sales). Filing of returns is a critical compliance procedure for taxpayers, while the Government and the tax authorities use them to estimate tax collected for a particular period. However, it can be cumbersome because a business owner has to file two monthly returns and one annual return, making 25 returns in a year.
In July 2017, Form GSTR 3B was introduced to simplify monthly return filing for small businesses initially. Later in 2020, the GST Council at its 42nd meeting recommended that taxpayers (less than Rs.5 crores) file GSTR 3B & GSTR 1 quarterly. These returns are to be filed electronically, though taxpayers can use various modes. For example, they can file directly on the GST portal. However, the process can be time-consuming for those with huge transactions or a large number of invoices. In this case, they can use offline utilities provided to the GSTIN taxpayers.
What is GSTR-3B?
GSTR 3B is a simplified return that includes a summary of outward supplies, inward supplies, eligible ITC, interest, late fee, payment of tax, etc. The good thing is that it does not need to have invoice-wise data for outward supplies. Here are the essential components of the GSTR 3B summary:
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Tax on outward and inward supplies (reverse charge)- This component includes details of outward supplies (regular taxable sales, nil-rated, zero-rated, and exempted sales). It also covers Inward supplies (Purchases) liable to reverse charge.
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Interstate supplies to unregistered persons and composition dealers
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Eligible ITC including ITC availed from import of goods and services, taxable purchases, and Reverse Charge Mechanism minus the ineligible claimed or paid ITC reversal
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Exempt, nil, and non-GST inward supplies
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Interest and late fee for delay in filing or shortfall of GST payment
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Payment of tax
A separate GSTR-3B has to be filed for every GSTIN even in case of a zero liability, and liability should be paid on or before the due date. Additionally, the GSTR-3B cannot be revised once filed.
Who should file GSTR 3B?
GSTR 3B return filing is to be done by the 20th day of the month succeeding the relevant month. However, the GST council has introduced a few changes in GSTR 3B due date category-wise. These include:
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Input service distributors
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Taxpayers registered under the Composition Scheme
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Non-resident taxable persons
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Non-resident suppliers of OIDAR service
What is the GSTR 3B Due Date?
GSTR 3B return filing is to be done by the 20th day of the month succeeding the relevant month. However, the GST council has introduced a few changes in GSTR 3B due date category-wise. These include:
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Input service distributors
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Taxpayers registered under the Composition Scheme
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Non-resident taxable persons
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Non-resident suppliers of OIDAR service
The government can extend the due date for filing Form GSTR-3B through notification if required.
Group A states- Gujarat, Maharashtra, Goa, Chhattisgarh, Madhya Pradesh, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Telangana, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Andaman, and the Nicobar Islands, Puducherry, or Lakshadweep
Group B states- Chandigarh, Delhi Himachal Pradesh, Punjab, Haryana, Rajasthan, Uttar Pradesh, Uttarakhand, Bihar, Nagaland, Manipur, Mizoram, Sikkim, Arunachal Pradesh, Tripura, Meghalaya, Assam, Jharkhand or Odisha, West Bengal, the Union territories of Jammu and Kashmir, or Ladakh,
Taxpayers must stick with these deadlines every month because late payment can lead to a late fee penalty and interest at 18% per annum. Both late fees and interest will apply if GSTR-3B was filed after the deadline even when the tax was paid within the due date.
GSTR 3B Late Fees and Penalty
Taxpayers have to pay a late fee for not filing GSTR-3B before the deadline. The following are the penalties levied:
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Rs. 50 per day of delay
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Rs. 20 per day of delay (for those with nil tax liability for the month)
Additionally, interest at 18% per annum is charged on the amount of outstanding tax that has to be paid if the GST dues are not paid within the due date.
How to File GSTR 3B?
The GSTN-3B application process is now user-friendly. As a taxpayer, you should still know the steps of the process to avoid chances of inadvertent errors. You can submit it electronically through the GST portal or a Facilitation Centre. If you have a NIL GST return, you can file it through an SMS using your registered mobile number. GSTR 3B returns filing is mandatory even if there is no business activity in a specific month. A NIL return is to be filed for that month.
QRMP (Quarterly returns filing and Monthly payment) of taxes scheme has been implemented from 1st January 2021. The scheme permits eligible taxpayers to file GST returns (GSTR 1 & GSTR 3B) only once a quarter. However, they need to compute the tax liability and pay it in the GST portal monthly using the challan PMT-06. Here is how the taxpayer can pay these taxes:
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Self–Assessed Challan- Computing actual tax liability and making the full tax payment through a manual challan using Challan PMT-06
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35% Challan- Using the GST portal to create automatic challan based on the total taxes paid in the last month/quarter on the basis of the return filing frequency of the taxpayer (usually a flat 35% of tax of the previous filing period)
Why Reconcile GSTR-1 with GSTR-3B?
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Stay GST compliant and improve the compliance rating
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Avoid penalties and interest due to the short payment of tax
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Identify if any invoice is duplicated or missed out
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Enable the recipient to claim an input tax credit based on GSTR-2A & GSTR-2B
Why Reconcile GSTR-1 with GSTR-2A & GSTR-2B?
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Stay GST compliant and improve the compliance rating
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Be informed about missing any genuine input tax credit
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Avoid notices due to excess input tax credit claims
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Nudge suppliers to upload invoice details
Frequently asked questions
Q
Should I file GSTR-3B in a month when I have no sales or purchases?
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Yes, every registered person must file GSTR-3B even if they have no sale or purchase transactions in a month.
Q
What is the difference between GSTR-1 and GSTR-3B?
A
GSTR-1 should have all the sales details, but GSTR-3B requires only summaries of sales, ITC claimed, and net tax payable.
Q
What is the difference between GSTR-3 and GSTR-3B?
A
The government initially planned to implement the GSTR-3 return as an auto-populated one based on GSTR-1 & GSTR-2 data. Later, it kept GSTR-3 on hold due to implementation problems and swapped it with GSTR-3B, which is a self-declared summary return.
Q
Should I provide invoice-wise details on the GSTR-3B return?
A
GSTR-3B does not require invoice-wise breakup. Only consolidated numbers are needed.
Q
Can I file GSTR-3B for both registrations if I have two of them?
A
You will have to file GSTR-3B for every GSTIN separately as they cannot be clubbed.
Q
Is invoice matching done in GSTR-3B?
A
No, invoice matching is not done in GSTR-3B. It is a summarised self-declaration return.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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