GSTR-3: Monthly Return Filing, Format, Eligibility, and Rules
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GSTR-3 is an important monthly return that summarizes the taxpayer’s GST obligations. It is intended to simplify the tax compliance process by providing an overview of inward and outward supplies, tax liabilities, and input tax credit availed during the particular tax period.
In this article, we will explore GSTR-3 in detail, its significance, eligibility, components, return filing requirements, and how it seamlessly integrates with other GST returns.
What is GSTR-3?
GSTR-3 is a monthly tax return aimed to consolidate the information provided in GSTR-1 (details of outward supplies) and GSTR-2 (details of inward supplies), and additional declarations. It intends to provide a complete picture of the taxpayer’s GST obligations.
The form was developed to assist the tax authorities in assessing the business's tax liabilities accurately and allowing them to claim eligible ITC. There are various sections under this form to report sales, purchases, available input tax credit, tax payable and tax paid. The data under form GSTR-3 is auto-populated via GSTR-1 and GSTR-2 forms filed earlier in the respective tax periods. However, the GSTR-3 filing has been suspended and businesses are now required to file GSTR-3B. In addition to GSTR-1, GSTR-3B is a simplified monthly return that enables taxpayers to declare their tax liabilities and input tax credit at a summary level, thereby eliminating the need to match invoices.
Who Should File GSTR-3?
GSTR-3 must be filed by all registered taxpayers. The following taxpayers are exempted from filing GSTR-3:
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Taxpayers under composition scheme
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Non resident taxable persons
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Input service distributors (ISDs)
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Suppliers of Online Information and Database Access or Retrieval Services (OIDAR)
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Tax collectors and deductors
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Casual taxable persons
Importance of GSTR-3
The significance and importance of GSTR-3 in the GST framework is as below:
Consolidation of Transactions: GSTR-3 was introduced to provide consolidated information on all inward and outward supplies. It provides a comprehensive view of the taxpayer’s transactions during the tax period.
Calculation of Tax Liability:- To calculate the tax liability based on actual transactions, was aimed through GSTR-3 form. Thereby simplifying the tax payment process.
Input Tax Credit (ITC) Reconciliation:- GSTR-3 is important for reconciliation of the input tax credit. This is to ensure that the taxpayers could claim the correct amount of ITC based on the actual receipt of supplies reported in GSTR-2.
Compliance and Transparency:- GSTR-3 was designed to improve the compliance and transparency of taxes by requiring detailed information on transactions. Thus reducing the possibility of tax evasion.
Facilitation of Refunds:- Since GSTR-3 provides clear evidence of excess tax payments, processing refunds becomes easier.
Streamlining Audits:- The detailed information GSTR-3 is useful during audits since it provides auditors with extensive data on taxpayer’s transactions, tax payments, and input tax credit claims.
Ease in the Monthly Filing Process:- GSTR-3 is intended to simplify the monthly filing process since it auto-populates details from GSTR-1 and GSTR-2, reducing the taxpayer’s manual process.
Enhancement of the Efficiency of GSTN:- By integrating the data from GSTR-1, and GSTR-2, GSTR-3 aims to improve the efficiency of the Goods and Service Tax Network (GSTN) in processing and validating the tax returns. This results in a smoother administration of tax.
Due Date of Filing GSTR-3
For taxpayers with the aggregate annual turnover of more than INR 5 Crore in the previous financial year: the due date is 20th of the following month.
For taxpayers with an aggregate annual turnover up to INR 5 Crore in the previous financial year: the due dates vary between 22nd or 24th of the following month, based on the State of Union Territory.
Components of GSTR-3
GSTR-3 comprises of various parts, each detailing specific aspects of the taxpayer’s GST obligations:
1. GSTIN:
Goods and Service Tax Identification Number (GSTIN) of the taxpayer.
2. Legal Name of the Registered Person:
The legal name of the entity as registered under GST.
Part A: Auto-populated Information
3. Turnover Details:
This includes the gross turnover, export turnover, and exempted domestic turnover.
4. Outward Supplies:
Auto-populated from GSTR-1, with detailed taxable outward supplies made to consumers and businesses.
5. Inward Supplies under Reverse Charge:
This provides details of the inward supplies on which tax is payable under reverse charge.
6. Input Tax Credit (ITC):
This section provides the details of the ITC availed according to GSTR-2. It also includes ITC on import of goods and services.
7. Non-GST Outward Supplies:
It reports the supplies that are not reported under GST.
Part B: To be filled by the Taxpayer
8. Tax Liability on Outward Supplies:
Details related to tax liability arising from outward supplies made during the month are presented under this section.
9. Tax Paid: Details of taxes paid such as:
CGST, SGST, IGST, and cess are provided here. Also, a distinction is made between the tax paid through cash and ITC.
10. Interest, Late Fees, and Penalty:
This section provides the information on interest and late fees payable or paid. It may be due to the late filing or late payment, and also any penalties imposed by the GST authorities.
11. Refunds:
Details of the refund claimed through electronic cash ledger.
12. ITC Reversal:
Information on ITC reversed because of ineligible transactions or non-payment to suppliers are mentioned in this section.
13. Other Payments:
Any other type of payment to be made such as tax, interest, penalty or fees are mentioned in this section.
14. Declarations and Verification:
To certify that the information provided in the return is accurate, a declaration is provided and signed by the authorized signatory.
GSTR-3 vs GSTR-3B
Following is the difference between GSTR-3 and GSTR-3B:
Frequently asked questions
Q
What is GSTR-3?
A
GSTR-3 is a monthly return which summarizes the information of all inward and outward supplies, GST liabilities, and ITC availed. It is auto-generated from GSTR-1 and GSTR-2 returns.
Q
How is GSTR-3 different from GSTR-3B?
A
GSTR-3 is a detailed monthly return, which presents the information on all inward and outward supplies. Whereas, GSTR-3B is a simple summary return which does not require detailed invoice-level information. Currently, the taxpayers have to file GSTR-3B as the primary monthly return.
Q
Who should file GSTR-3?
A
All regular taxpayers under GST must file GST-3 on a monthly basis. This includes businesses, freelancers, and service providers registered under GST.
Q
What are the due dates for filing GSTR-3?
A
The deadline for filing GSTR-3 is the 20th of the following month. However, the GST Council may extend the deadline.
Q
Is it possible to revise GSTR-3 after filing?
A
Yes. GSTR-3 can be revised after filing. The taxpayers are allowed to revise the details of GSTR-3 in the subsequent tax period including corrections or adding the missing data.
Q
What is the consequence of not filing GSTR-3 on time?
A
If GSTR-3 is not filed on time, it will attract late fees and interest on the unpaid amount of tax. The late fee is subject to the guidance issued by the council.
Q
What is the impact of GSTR-3 on ITC?
A
GSTR-3 plays an important role in finalizing the amount of ITC. It allows the taxpayers to match, reconcile, and confirm the value of ITC claims based on the information furnished in GSTR-2 and GSTR-3B.
Q
Who is exempted from filing GSTR-3?
A
Following categories of taxpayers are exempted from filing GSTR-3:
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Taxpayer registered under Composition Scheme
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Non-resident taxable persons, and
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Suppliers of OIDAR (Online Information Database Access Retrieval Service) services
Q
What is the auto-population feature in GSTR-3?
A
Certain sections of GSTR-3 get auto-populated. This auto-population feature captures the information using filed forms GSTR-1 and GSTR-2.
Q
What details are required to file GSTR-3?
A
To file GSTR-3, following information is required: GSTIN of the taxpayer, sales and purchases information, ITC availed, tax paid, and any other mandatory information as required.
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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