What is GSTR-3B?: Key Purposes of GSTR-3B Filing
- Payment of tax: GSTR-3B serves as a self-assessment or self-declaration of the tax payable by the taxpayers. Through GSTR-3B, taxpayers can calculate their tax liability for a particular month and make payment accordingly. This helps the government in the timely collection of tax revenue and ensures that taxpayers are meeting their tax obligations regularly.
- Compliance with the law: Under the GST regime, every registered taxpayer is required to file GST returns, including GSTR-3B, within the prescribed time frame. GSTR-3B is an important compliance requirement that helps taxpayers avoid penalties for non-compliance. Failure to file GSTR-3B on time can lead to interest charges, late fees, and other penalties.
- Input Tax Credit (ITC) reconciliation: Another key purpose of filing GSTR-3B is to reconcile the input tax credit (ITC) claimed by the taxpayer with the data provided by their suppliers in GSTR-1 and GSTR-2. This helps to prevent ITC mismatch and ensures that taxpayers are claiming only the ITC that they are entitled to. Any difference in the ITC claimed by the taxpayer and that reported by their suppliers can be corrected through GSTR-3B.
- GST return filing: GSTR-3B is an interim return that taxpayers must file every month, before the due date of GSTR-1 and GSTR-2. GSTR-1 is the monthly return that taxpayers file to report their outward supplies of goods and services, while GSTR-2 is the return that taxpayers file to report their inward supplies of goods and services. Filing GSTR-3B on time is a prerequisite for the filing of other GST returns, making it an essential part of the GST compliance process.
- Record keeping: GSTR-3B serves as a record of the taxpayer’s tax liabilities, ITC, and other details. It helps taxpayers keep track of their tax compliance and ensure accurate reporting of their GST transactions. GSTR-3B data is used by the government to assess taxpayer compliance and can also be used by taxpayers for their own internal record-keeping purposes.
GSTR-3B Eligibility & Exemptions
GSTR-3B for Monthly vs Quarterly GST Returns
Exemptions for GSTR-3B Filing
Details and Documents Required for Filing GSTR-3B
|List of Documents
Every GST-registered person in India is assigned a unique 15-digit GSTIN, which is required to file GSTR-3B.
Taxpayers are required to provide the details of their taxable supplies, exempt supplies, and exports made during the month.
Input Tax Credit details
Taxpayers are required to report the ITC availed on their purchases, including details of invoices received, tax paid, and any adjustments made for ineligible credit.
Payment of Tax
Taxpayers are required to pay the tax due on their outward supplies and report the same in GSTR-3B. They can utilize the ITC available in their electronic credit ledger to pay the tax due.
Taxpayers may also be required to provide other details such as the type of tax payment (self-assessment or payment through TDS/TCS), any late fees or interest payable, and details of any previous adjustments made.
When Should You File GSTR-3B?: GSTR-3B Due Date
Penalty For Late Filing of GSTR-3B
- Late fee: If a registered person fails to file GSTR-3B by the due date, a late fee of Rs. 50 per day of delay (Rs 20 for taxpayers with nil tax liability) is charged for each day of delay. The maximum late fee if the aggregate annual turnover is up to Rs.1.5 crores, will be Rs.2,000 (Rs.500 for taxpayers with nil tax liability), if the turnover is up to Rs.5 crores will be Rs.5,000, and if the turnover is beyond Rs.5 crores will be Rs.10,000.
- Interest: If the tax liability is not paid by the due date, interest is charged at the rate of 18% per annum. This interest is calculated on the tax amount due from the due date of filing the return until the date of payment.
- Input Tax Credit (ITC) loss: If GSTR-3B is not filed within the due date, the input tax credit (ITC) for that month is forfeited. This means that the taxpayer will not be able to claim the ITC for that month in future returns.
- Legal action: If a taxpayer repeatedly fails to file GSTR-3B on time or deliberately evades tax, legal action can be initiated against them under the GST law.
- Barred from filing GSTR-1: Starting from 1st January 2022, if a taxpayer who files taxes on a monthly basis fails to comply with tax filing requirements, such as not filing GSTR-3B for the previous month, then they will not be permitted to file their GSTR-1 for the following month until the GSTR-3B for the previous month is filed. The same rule applies for taxpayers who have chosen the Quarterly Return Monthly Payment (QRMP) Scheme and do not file their GSTR-3B quarterly. In such cases, the taxpayer will not be permitted to file the Invoice Furnishing Facility (IFF).