GSTR-3B is a key component return and filing GSTR-3B is mandatory for all registered businesses in India. The self-declaration summary return provides details of all inward and outward supplies and tax liabilities, thereby providing the businesses the option to assess the correct tax due and pay the taxes on time. It helps businesses to claim the input tax credits and adjust them against their output tax liability, thus reducing the overall tax liabilities.
It is important to file the GSTR-3B returns within the stipulated time so as to avoid penalties and be compliant with tax regulations. Filing the GSTR-3B returns on time and accurately helps businesses gain a good reputation in the industry which is crucial for the businesses to grow. Therefore, understanding the components of GSTR-3B is important for any business to navigate the GST landscape efficiently. Here we discuss in detail the components of GSTR-3B so that the business can file accurate returns on time:
Components of GSTR-3B
GSTR 3B is a simple document with the summary of outward supplies, inward supplies, eligible input tax credits (ITC), taxes to be paid etc. It does not require the details of every invoice of the outward supplies. GSTR 3B has to be filed on the 20th of every month following the month the transactions have occurred. Following are the components of GSTR-3B:
The GSTR-3B has two parts:
Part A: This part consists of details of the taxpayer like GSTIN, legal name, trade name, and address, the tax period, that is the month for which the return is filed.
Part B: This part consists of the details of the taxpayer’s transactions. It is divided into the following sections:
- Outward Supplies: In this section, details of all taxable supplies made by the taxpayer, both within and outside the state are included, along with rate of tax, taxable value and amount of tax. Taxpayers need to include zero rated supplies such as exports to Special Economic Zones (SEZs) and also the exempt supplies made during the reporting period. Exempt supplies are those supplies that are not liable for GST. Details of inter-state supplies made to unregistered persons, composition taxable persons and UIN holders are also included in this section.
- Inward Supplies: In this section, details of all purchases made by the taxpayer, both within and outside the state are included. These purchases include inputs like raw materials, goods for resale etc., as well as input services like consultancy, transportation etc. It also includes the details of GSTIN of the supplier, the rate of tax, the taxable value, and amount of tax. Both inter-state and intra-state purchases are included in this section.
- Input Tax Credit: This is a crucial component of GSTR-3B which allows taxpayers to offset the GST paid on purchases against their GST liability. It includes GST paid on raw materials, machinery, furniture, equipment etc. The eligible input tax credit claimed on capital goods which are long term assets that are used for business are also reflected in this section. The eligible input tax credit claimed on input services like legal fees, accounting services, advertising etc., are also reflected in this section.
- Tax Payable and Paid: In this section, the overall tax amounts of CGST, SGST,IGST and cess are captured. Taxpayers need to pay the calculated tax by the due date and before filing the GSTR-3B. This payment can be made through online or other approved methods.
- Late Fee and Interest: This section includes details of any late fees or interest that is applicable for late filing or late payment of taxes.
- TDS/TCS Credit: When a customer or e-commerce deducts or collects tax at source, the taxpayer receives a credit against it. Such credits accumulated during the month are captured in this section, under different tax heads like IGST, CGST, SGST, UTGST.
Steps to File GSTR 3B
The steps involved to file GSTR 3B are as follows:
Step 1: The taxpayer has to login to the GST portal with the GSTIN and password
Step 2: On the ‘Returns Dashboard’, the taxpayer has to select GSTR 3B
Step 3: Details such as tax period, and the taxpayer’s details have to be entered
Step 4: In Part B, details of outward supplies, inward supplies, ITC, tax payable and paid are reflected. The taxpayer has to ensure correctness of the values therein.
Step 5: After all the details are filled, ‘Save GSTN’ button has to be clicked
Step 6: After reviewing the details, the ‘Preview’ button has to be clicked and all the details in the form have to be checked and accuracy ensured before filing.
Step 7: After confirming the accuracy of all the details, the taxpayer has to click on the submit button
Step 8: The taxpayer has to pay the tax due and late fee if applicable, then click on ‘File GSTR 3B button.
- What are the consequences of not filing GSTR within the due date?
Answer: Late fees of Rs.50/- per day (Rs.20/- for taxpayers with nil tax liability) until the date of filing, subject to a maximum of Rs.5000/-and Rs.2000/-respectively is applicable for late filing of the returns. Further if the taxpayer fails to file the returns continuously for more than two months, they are liable to have their registration canceled.
- How to rectify the errors in GSTR 3B returns?
Answer: GSTR-3B cannot be revised after it is filed, but the errors can be rectified in the return of the month in which the error is noticed.
Related Read: Common Errors and Mistakes in GSTR-3B Filing
GSTR 3B is used to calculate the accurate tax liability of a registered taxpayer. It helps the taxpayer to claim input tax credit (ITC) and calculate and pay the correct amount of tax. The form also helps the government to keep track of the monthly transactions of the taxpayer and ensure compliance, and help in curbing tax evasion. Understanding the components of form GSTR 3B is important because it helps the taxpayers to calculate and pay the correct amount of tax within the prescribed time limit. This helps in avoiding complications like penalties and interest and in extreme cases cancellation of GST registration. By following the steps correctly, taxpayers can ensure that they are GST compliant and avoid unnecessary consequences.