What is GSTR-3B?

GSTR-3B is a summary return that every registered taxpayer under GST needs to file monthly or quarterly, depending on the scheme under which they have registered. This return summarizes the total GST liability and allows taxpayers to claim the Input Tax Credit (ITC).

Unlike the more detailed GSTR-1 (which is a sales return) and GSTR-2 (which is a purchase return), GSTR-3B is a simplified form that combines the monthly tax liability and ITC details.

Key Purpose of GSTR-3B

• Through the declaration of GST Liability users can record both output tax which stems from customer payments as well as input tax credit resulting from business purchase expenditures.

• This feature enables businesses to pay taxes to the governmental authorities.

• The system helps businesses obey the regulations for GST reporting submissions.

Who Needs to File GSTR-3B?

• GST-Registered Businesses: All businesses and professionals who are registered under GST must file GSTR-3B.

• Taxpayer Categories:

1. Regular Taxpayers: Businesses that are not under any special scheme.
2. Composition Scheme: Taxpayers under the composition scheme must also file this return quarterly.
3. Non-Resident Taxable Persons: Foreign businesses or individuals who provide taxable supplies in India.

GSTR-3B Filing Due Date

• Monthly Filing: GSTR-3B must be filed monthly by regular taxpayers. The due date for filing is typically the 20th of the following month.

• Quarterly Filing: Taxpayers under the GST Quarterly Return Monthly Payment (QRMP) scheme must file GSTR-3B for the first and third quarters of the financial year.

Late Filing Penalty

• Late Fees: ₹50 per day (₹25 each for CGST and SGST) for a late return.

• Interest on Late Payment of Tax: Interest is charged at 18% per annum if GST liability is not paid on time.

How to File GSTR-3B?

Follow these steps to file GSTR-3B:

• Login to GST Portal: Users need to visit www.gst.gov.in to access the GST portal where they should login with their authorized credentials.

• Navigate to the Returns Section: Go to the “Services” tab and click on “Returns,” then select "GSTR-3B."

• Select the Period: Choose the month or quarter for which you are filing the return.

• Enter Details in the Form:

1. Part A : Details of Outward Supplies & Tax: Report the sales details of goods and services.
2. Part B : Details of Input Tax Credit (ITC): Enter the ITC you are eligible to claim on purchases, including stock purchases and capital goods.
3. Part C : Calculation of Tax Payable: Calculate the GST liability and ITC.
4. Part D : Other Details: Input any adjustments, reversals, or refund claims.

• Pay Tax Liability: If you have any outstanding tax liability, make the payment through the payment gateway.

• File the Return: Once you’ve reviewed all the details, click on “File” to submit your return.

Important Sections of GSTR-3B

• Outward Supplies (Sales)

1. Taxable Sales: Enter the total value of sales for the month, split by the rate of GST (e.g., 5%, 12%, 18%, 28%).

2. Exempt Sales: The value of supplies on which no GST is applicable.

3. Zero-Rated Sales: Export sales or supplies made to SEZ units.

•  Input Tax Credit (ITC)

1. ITC Claimed on Purchases: Report the ITC you wish to claim for purchases made during the month. This is the GST paid on raw materials, goods, services, etc.

2. Blocked Credit: Some credits are not eligible for deduction, such as GST paid on certain goods like motor vehicles, food, etc.

• Summary of Tax Liability

1. The section presents your tax obligations that are split into separate heads of CGST, SGST, and IGST according to your sales transactions and purchases.

2. During the month any payments resulting from tax obligations constitute Tax Paid (If Any).

•  Adjustments and Refund Claims

1. Adjustments: The report requires information on all corrections made during prior months whenever possible.

2. Refunds: The declaration of any claimed tax overpayment for refunds goes on this section.

Key Points to Remember While Filing GSTR-3B

• Check that your Input Tax Credit (ITC) declarations in GSTR-3B correspond exactly with the purchase data found in GSTR-2A as well as GSTR-2B which the GST system generates automatically.

• The filing of GSTR-3B must happen on time without delay to prevent paying additional fees and interest rates.

• The payment of GST must occur before you submit your declaration. Unpaid taxes may result in financial charges for the non-payer.

• Check that the reported sales amounts between GSTR-3B and GSTR-1 (sales return) remain identical.

• You should eliminate all unclaimed or ineligible ITC by performing a reversal process prior to filing.

Common Mistakes to Avoid in GSTR-3B Filing

• Errors in filling ITC claims produce penalties because of improper classifications of ITC.

• The reporting system needs to capture each transaction including sales status regardless of being exempt or free of tax.

• The difference between figures in GSTR-1 and GSTR-2A/2B along with GSTR-3B will make the tax authorities take notice.

• Late tax payment produces both interest charges and penalty fees.

Conclusion

The necessary step for GST compliance involves the submission of GSTR-3B filing. Through the filing of GSTR-3B businesses can both ensure proper taxes payments while also claiming correct tax credits. Business operations run smoothly under GST when organizations maintain organization, monitor their sales and purchase records while submitting on time.

Contact a tax professional or use GST software solutions for GSTR-3B filing assistance if you require help with submitting your documents.

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same. 

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.