Calculation of Tax Liability in GSTR-5

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A comprehensive indirect tax system was created after the implementation of GST in India, bringing coordination and efficiency to the tax system in the country. GST is applicable to the supply of goods and services, and all taxpayers are required to follow the procedures and compliances specified under the GST Act. Tax Liability in GSTR-5 is for Non-resident taxpayers who supply goods and services in India as they also come under the purview of GST and are required to register, pay taxes, and file returns. There is a separate set of rules and procedures for non-resident taxpayers conducting business transactions in India.

Tax Liability in GSTR-5 for Non-Resident Taxpayers: Filing Returns and Payment of Tax

Filing returns and paying tax within the prescribed timeline is a crucial part of compliance with GST. Non-filing, late filing, or incorrect filing can lead to liabilities, including late fees, interest, and other penalties. So, to calculate tax liability and file returns accurately and on time, it is very important for all taxpayers, including non-resident taxpayers, to understand the method of tax calculation while filing returns.

GSTR-5 is a mandatory return that has to be furnished through the GST portal by non-resident taxpayers on or before the 20th of the month succeeding the particular tax period or within seven days after the end of the validity period or registration, whichever is earlier. The applicable amount of tax, interest, fees, and penalty have to be calculated and paid while filing GSTR-5.

Advance Deposit during Registration

All non-resident taxpayers are required to pay a deposit of estimated tax, interest, late fees, cess, etc., at the time of registration, which gets credited in the electronic cash ledger of the taxpayer. This deposit can then be used for any GST payments that are to be made by him during the filing of GSTR-5 later.

Prerequisites for Filing GSTR-5

The prerequisites for filing GSTR-5 for non-resident taxpayers are as follows:

  • The taxpayer should be registered as a non-resident taxpayer with GSTIN, a valid user ID, and a password on the GST portal for filing the returns online. Returns can also be filed through a tax facilitation center.
  • The non-resident taxpayer should have a temporary registration under GST for the period to carry out their business in India. They do not have a permanent business establishment in India.
  • A digital signature or electronic verification code is necessary for validating GSTR-5 on the portal.

Also, check out our blog on ‘Requirements and Eligibility for GSTR-5 Registration‘.

Calculation of Tax and Filing of GSTR-5

The following six main steps are involved in the calculation of tax liability and filing of GSTR-5 electronically in the GST portal for non-resident taxpayers:

Step 1: Login and go to the GSTR-5 page: In this step, the taxpayer has to login and go to the GSTR-5 return page. After entering the GSTIN, Tables 1 and 2 get auto-filled with the name and validity period of the taxpayer’s registration.

Step 2: Enter Relevant Details: In this step, the taxpayer has to enter the relevant details in the tables by clicking on the tiles representing the tables. To enter related details, he has to click on the tile names.

  • Table 3: Details of Taxable Supplies: The taxpayer has to add details of inputs and capital goods received from overseas (import of goods), as well as other details like CES paid, rate of tax, and ITC available.
  • Table 4: Amendments The details of amendments to previous returns are to be added to this table. Here, taxpayers can make changes to the earlier returns filed.
  • Table 5: Outward Supplies: The taxpayer has to add details of taxable outward supplies made to registered persons, including UIN holders.
  • Table 6: B2C Large Invoices: The taxpayer has to enter details of interstate taxable outward supplies to unregistered persons where the value of the supplies is more than Rs. 2.5 lakhs.
  • Table 7: Taxable Supplies: The taxpayer has to enter details of taxable supplies to unregistered persons where the value of the supplies is less than Rs. 2.5 lakhs.
  • Table 8: Amendments to Outward Supplies: The taxpayer has to enter details of amendments to taxable outward supplies pertaining to returns of earlier tax periods in tables 5 and 6, including debit notes, credit notes, and invoices.
  • Table 9: Amendments to Outward Supplies to Unregistered Persons: The taxpayer has to enter details of amendments to taxable outward supplies to unregistered persons from earlier returns pertaining to Table 7.
  • Table 10: Total Tax Liability: In this table, the total tax liability is auto-populated from the values entered in the above tables. There is a subheading that shows the tax liability details for outward supplies for the present month.
  • Table 11: Tax under IGST, CGST, and SGST: This table shows the details of the total tax to be paid under IGST, CGST, and SGST during the month. The information is auto-populated from the above sections. The taxpayer can make payments through the electronic cash ledger.
  • Table 12: Interest, Late Fee, and Other Penalties: The amount of interest, late fee, and any other amount payable under CGST, IGST, or SGST due to late return filing are shown in this table.

Step 3: Preview of GSTR: In this step, the taxpayer has to click on the ‘Download Summary (PDF)’ button. The summary page of GSTR-5 is displayed.

  • Table 13: Refund Claimed under Electronic Cash Ledger: The details of refund amounts received in the electronic cash ledger are reflected in this table. The taxpayer has to choose the bank account in which he will receive the refund. The field is auto-populated if any refund amount is received from the electronic cash ledger.
  • Table 14: Debit Entries in the Electronic Cash Ledger: This table shows the debits in the electronic cash ledger, which are populated after payment of tax and submission of the return.

Step 4: Payment of Tax: When the taxpayer clicks the ‘Payment of Tax’ tile, The tax liabilities along with credits get updated in the ledgers and show up in the ‘tax payable’ column of the payment section. Credits get updated in the credit ledger, and the updated balance is shown. When the ‘offset liabilities’ button is clicked, the tax liability is offset, and a confirmation message is displayed. Partial payments are not allowed.

Step 5-File GSTR-5: After the declaration and authorized signatory boxes are selected, the ‘File GSTR-5’ option is enabled. When this is clicked, a warning page appears where the taxpayer has to select a file with DSC or EVC. The taxpayer has to select either one and click on proceed. After verification, the return is filed, and the successful return filed message is displayed.

After the filing process is completed, the status of the GSTRN-5 return changes to ‘Filed’, and the taxpayer gets an SMS if an Indian mobile number is provided, and an email with the acknowledgement is also sent to them.

Step 6: View GSTR-5 Status The taxpayer has to go to the File Returns page, select the return filing period of the return filed above, and click on the search button. The status of the GSTRN-5 return shows ‘Filed’.


Non-resident taxable persons who supply goods and services in India are required to register in the GST portal, pay tax, and file returns within the specified time as per the rules laid down in the GST Act. Non-compliance can lead to interest, fees, and other penalties. The GSTR-5 filing is important for the non-resident taxpayer because it contains details of outward and inward supplies and other information with regard to their transactions in India. The calculation of tax liability is done automatically in the portal, which has made it easy and error-free for non-resident taxpayers. But they have to ensure that the information provided in the tables with regard to outward and inward supplies, the reverse charge mechanism, and amendments is accurate. Seeking the help of professional advisors is safe when the taxpayer is unsure and confused.

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Vidya Sagar Freelance Writer
Vidya Sagar has post graduate and Law graduate qualifications. She has worked in the finance industry for many years. She is passionate about writing and keen on writing articles related to tax, accounting, audit, and other finance related topics. She likes to simplify complex financial matters to help her readers understand easily. She reads a lot in her spare time and keeps herself updated with the latest financial news. She likes helping people in all their financial and compliance requirements

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