GSTR 3 Return Filing: Format, Eligibility & Rules

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Published Date:  13-02-2024   Author:   yash-elwadhi
gstr return filing format eligibility rules

GSTR-3 is the third in a series of forms introduced by the government, facilitating taxpayers in fulfilling their tax obligations based on various criteria. This blog will delve into the format, eligibility criteria, and regulations governing the filing of GSTR-3. Additionally, we shall underscore the significance of adhering to GSTR-3 filing requirements and elucidate the repercussions of non-compliance.

Understanding GSTR-3

GSTR-3 is a monthly return that taxpayers must file, wherein they report details of inter-state movement of goods, sales, purchases for the month, and their corresponding tax liability. This return is auto-generated, drawing information from GSTR-1 and GSTR-2 forms.

This filing requirement applies to all taxpayers registered under GST who have not opted for the composition scheme. Additionally, it extends to taxpayers without the Unique Identification Number (UIN).

Who Should and Should Not File GSTR 3?

Regardless of the volume of transactions or absence thereof within a given month, every GST-registered taxpayer is mandated to submit GSTR-3.

Who Should File GSTR 3?

  • Taxpayers registered under GST
  • Individuals or entities engaged in taxable supplies

Who Should Not File GSTR 3?

  • Input Service Distributors
  • Persons liable to deduct TDS (Tax Deducted at Source)
  • Composition Dealers
  • Persons liable to collecting TCS (Tax Collected at Source)
  • Non-resident taxable persons
  • OIDAR suppliers (Providers of Online Information and Database Access or Retrieval Services)

Consequences of Late Filing and Non-filing of GSTR-3

Late Filing:

If GSTR-3 is filed after the due date, the taxpayer will be subject to interest and late fees. The interest rate is 18% per annum, calculated by the taxpayer on the outstanding tax amount from the day following the filing deadline (16th of the month) until the payment date. Additionally, late fees amount to Rs. 100 per day per Act, totaling Rs. 200 per day under CGST and SGST. The maximum late fee is capped at Rs. 5,000. No late fee is applicable for IGST.

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Non-Filing:

Failure to file GSTR-3 results in the inability to file GSTR-1 for the subsequent month. Consequently, late filing of GST returns initiates a chain of cascading effects, leading to severe fines and penalties.

GSTR 3 filing requirements

  • The individual must be registered under GST with a 15-digit PAN-based GSTIN.
  • Additionally, the individual must ensure the filing of their GSTR-1 and GSTR-2 returns.
  • Before proceeding with the filing of the GSTR-3 form, it is essential for the individual to settle any outstanding GST dues with the government.
  • Information regarding this can be accessed within the GSTR 3 summary generated on the GST portal before filing returns in GSTN.
  • The individual should also have their OTP (One-Time Password) ready, which they will receive on their registered phone number.
  • This OTP is necessary if the individual opts for filing through the EVC (Electronic Verification Code) option or by using a DSC (Digital Signature Certificate).
  • Alternatively, they can utilize Aadhar-based electronic signatures to file the returns.

Input tax credit in GSTR 3

In GSTR-3, Input Tax Credit (ITC) is crucial in offsetting tax liabilities. Here’s how ITC is utilized:

Part I: Summary of ITC Availability

This section presents an overview of the ITC available in a given month, categorized as follows:

  • Inputs: This category includes raw materials used in business operations.
  • Input Services: It comprises services like consulting fees that contribute to business activities.
  • Capital Goods: This encompasses items such as laptops, which are considered long-term assets.
  • ITC from Input Service Distributor (ISD): Any ITC received from ISD is also accounted for here. All ITC amounts are adjusted for debit/credit notes.

Part II: Changes to Previous Month’s Details

This segment outlines any amendments made to the details from earlier months and their impact on the Input Tax Credit (ITC).

Format of GSTR 3 return

1. GSTIN

A unique GSTIN  is given to each registered taxpayer. A provisional ID can be used if GSTIN is not available.

2. Name of the Taxpayer, Month, Year,

Legal name of the taxpayer, and trade, along with the relevant month and year for filing GSTR-3.

3. Turnover (Part A)

Summary of various types of turnover, including taxable turnover, zero-rated supply, exempted supplies, and non-GST supplies.

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4. Outward Supplies (Part A)

Details of inter-state and intra-state supplies, including taxable supplies attracting reverse charge and zero-rated supplies.

5. Inward Supplies Subject to Reverse Charge, Including Import of Services (Adjusted for Advance Payments)

Summary of inward supplies on which tax is payable under reverse charge mechanism, including imports of services.

6. Input Tax Credit (Part I)

Summary of Input Tax Credit available during the month, categorized into inputs, input services, capital goods, and ITC received from ISD.

7.Adjustments to Output Tax for Discrepancies and Other Causes

Details of any adjustments made to output tax liability due to mismatches or invoice rectifications.

8. Total tax liability

Breakdown of total tax liability under different tax heads, including outward supplies, inward supplies under reverse charge, and ITC reversal or reclaim.

9. Credit of TDS and TCS

Details of Tax Deduction at Source (TDS) and Tax Collected at Source (TCS) paid by the taxpayer.

10. Interest liability (Interest as on )

Calculation of interest payable due to delays in payment of taxes, with a breakup into CGST, SGST, IGST, and Cess.

11. Late Fee: The penalty for delayed return filing is capped at Rs. 5,000, with no late fee for IGST.

12. Part B (Filled manually by the taxpayer)

Manual entry of tax payable and paid amounts, following ITC claim rules.

13. Interest, Late Fee, and any other amount (other than tax) payable and paid

Declaration of amounts payable and paid as interest or late fee, with a breakdown of tax heads.

14. Refund claimed from Electronic cash ledger

Claiming a refund for excess tax paid, subject to fulfillment of return-related liabilities.

15. Entries in Electronic Cash/Credit Ledger for Tax/Interest Payment

Automatic population of entries upon tax payment and return submission by the taxpayer

Also Read: What Is the Difference Between ITR Filing and GST Filing?

Conclusion

Importance of GSTR 3 filing cannot be overstated. GSTR-3 filing is an essential aspect of GST compliance. It is a monthly return that summarizes the month’s sales, purchases, and tax liability. The filing of GSTR-3 is mandatory for all registered individuals, regardless of transaction activity during the month. This return is vital as it reflects the monthly GST liability, which taxpayers must settle and report. Failure to file GSTR-3 on time incurs significant fines and penalties. Therefore, timely submission by the 20th of each month is imperative to avoid such consequences.

Frequently Asked Questions 

What are the consequences of non-compliance with GSTR-3 filing?

Non-compliance with GSTR-3 filing can result in penalties and fines. Late filing attracts a late fee of Rs. 50 per day of delay, subject to a maximum of Rs. 5,000. Additionally, it may lead to loss of input tax credit and legal repercussions.

What are the eligibility criteria for filing GSTR-3?

Regardless of the transaction volume, any entity registered under GST must file GSTR-3. It is essential for maintaining GST compliance and fulfilling statutory obligations.

What should be included in the GSTR-3 compliance checklist?

The GSTR-3 compliance checklist should ensure accurate turnover reporting, reconciling outward and inward supplies, timely payment of tax liabilities, proper documentation of input tax credit, and adherence to GST laws and regulations.

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Yash Elwadhi

Yash Elwadhi is a highly skilled and experienced finance content writer with a proven track record of providing insightful and engaging content to a wide range of clients in the financial industry. He has collaborated with prominent financial institutions, fintech companies, and wealth management firms, and is known for his ability to convey complex financial concepts in a clear and engaging manner. Yash is committed to delivering high-quality content that adds value to his clients' target audience and helps them achieve their financial goals.

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