GSTR 3 - Meaning and How to File it?

On 1st July 2017, the Indian Government initiated GST, or Goods and Sales Tax which is a replacement of several taxes that were levied on people previously. These taxes were excise duty, VAT, service taxes, etc. However, after the coming of GST, all these came under one umbrella tax system, and the whole process became much easier.

Hence, taxpayers need to file different GST forms as per their business and transaction type. GSTR 3 is such a type that is required for recording details of monthly transactions. Keep scrolling to know what is GSTR 3 and other related details.

GSTR 3 is a tax document of monthly returns that includes purchases, sales, interstate stock movement in a month, etc. with full GST liability. GSTR 3 is an auto-generated return based on the details of GSTR 1 and 2.

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GSTR 3 is mandatory for all regular GST payers. So, if you are supplying goods and services over 20 lakhs, you are eligible for paying GST and filing GSTR 3 as well. However, in the below-mentioned cases, you do not need to file a GSTR 3:

• If you are a distributor of input services.
• If you are a composition dealer.
• In case, you are a taxable non-resident.
• If you are liable to TCS collection.
• If you are liable for TDS deduction.

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GSTR 3 gets generated automatically after filing GSTR 1 and GSTR 2. Further, you will have to file some fields manually. To get GSTR 3 form online you can visit the GST official portal.

However, if the amount declared in GSTR 3 exceeds, you have to file GSTR 3B. The filing process is as follows:

Step 1: Go to the official portal for GST and Login.

Step 2: Click on “Services” tab.

Step 3: Choose “Returns” option.

Step 4: Click on “Return Dashboard.”

Step 5: Choose a financial year, quarter, and period or month.

Step 6: Click on “Search.”

Step 7: Fill out the consent form. 

Step 8: Click on submit.

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Generally, taxpayers need to provide different details as official documents to file GSTR 3. So, if you are wondering how to file GSTR 3 you should check the following discussion on the necessary details of GSTR 3:

1. GSTIN

GSTIN is the PAN-based unique 15-digit identification number

2. Taxpayer’s Name

The taxpayer’s legal and trade name will be required. However, it will be auto-filled.

Hence, GSTR 3 has two parts: Part A and Part B. You do not need to fill in Part A as the system automatically fills it with the information from GSTR 1 and GSTR 2.

However, you have to fill in Part B with accurate details. Scroll down to know more.

3. Part A

The details of Part A are as follows:

• Turnover: Under this heading, there will be turnover details of:
  • Taxable Turnover: It refers to normal sales for both unregistered and registered buyers
  • Zero Rated Supply: This is applicable for both on payment and without payment of tax. Zero rated supply on tax payment refers to the exports that you have paid for by paying IGST. On the other hand, zero rated supply without tax payment refers to exports that have been paid with LUT or bonds.
  • Deemed Exports: This refers to the goods that have been sold to overseas consumers but not left the country
  • Exempted: These are GST-exempted goods and services
  • Nil Rated: Nil rated supply under GST refers to goods and services that attract a Nil GST rate, meaning no tax is levied on their supply.
  • Non-GST Supply: The details of non-GST products such as electricity and petrol
• Outward Supplies: Outward supplies record the data of every type of supply you undertake for your customers. The data of this record is auto-generated from the details of GSTR 1. Under this section, there are three sub-parts. These are as follows:
  • Supplies within Inter-State: This includes taxable supplies, zero-rated supplies paid with IGST method, supplies attracting reverse charge, and GSTIN of e-commerce operators.
  • Supplies within Intra-State: This is similar to inter-state however, the only difference is the sales are intra-states.
  • Amendments Tax Effect Made With Outward Supplies: This section is the record of any change in the tax liability and tax credit because of any modification
• Reverse Charge Attracting Inward Supplies Including Services That Are Importing: Under this heading, there will be records of all of your purchases and sales during a particular month. GSTR 2 will provide this kind of information.
• Input-Tax-Credit: This section has two parts: Part 1 includes inputs, capital goods, and input services. On the other hand, part 2 has the details of the changes of the earlier months and their outcome on ITC.
• Amount Addition/Reduction in Output Tax Due to Mismatch or Other Reasons: The mismatches between original returns and tax liability. GSTR 2 is the source of this information.
• Total-Tax-Liability: This portion will record your complete tax liability as per the calculation of the GST portal.
• Credit-of-TDS-and-TCS: This section will cover your TCS and TDS details which will be deducted from your total liability.
• Interest Liability: This is the whole amount of interest that taxpayers have to pay to the government for different reasons.
• Late Fee: You are liable  to a late fee of ₹100 per day, with a maximum limit of ₹5000, for delayed filing of returns. However, for Nil returns, the late fee has been reduced to ₹20, and for returns other than Nil, it is ₹50.

4. Part B

This part is manual and taxpayers should carefully fill in each detail to file a GSTR 3. Different sections of this part are:

• Payable/Paid Tax: In this part, you need to fill out the fields with proper tax amounts that you will pay under several tax heads.
• Late Fee, Interest, or Any Other Payable/Paid Amount (Other-Than-Tax): Here, taxpayers have to specify their interest fee and other payable amounts along with a late fee if applicable.
• Claiming of Refunds From Electronic Cash Ledger: It is applicable if you pay taxes more than the amount you need to pay.
• Debit Entries in E-Cash or Credit Ledger for Tax or Interest Payment: GST portal will automatically fetch this data after you pay taxes and submit your final returns.

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Prerequisites you must have to file GSTR 3 are as follows:

• The 15-digit PAN-based GSTIN number
• Details of the filing of GSTR-1 and GSTR-2
• You must verify the return with the help of EVC or an electronic verification code
• You must clear your GST due before filing GSTR 3

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Taxpayers have to file GSTR 3 before the 20th of a particular month. Before filing GSTR 3, taxpayers must complete filing GSTR 1 and GSTR 2.

However if the taxpayer opted to file quarterly return then the due date of filling GSTR3B is 22nd of succeeding month.

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GSTR 3 and GSTR 3B have got compiled amendments. The recent important amendments that include in GSTR 3 B and GSTR 3 details are as follows:

• To introduce streamlined compliances in GST, the 47th Meeting of GST Council has decided to make changes in GSTR Form 3B
• To remove confusion, the council has ordered to provide clear information regarding inter-state supplies and the blocked or ineligible-input-tax-credit

To execute these amendments Central Board of Indirect Taxes and Customs took steps like

• Modifying GSTR Form 3B on 5th July 2022
• On 6th July 2022 they clarified the mandatory representation of proper inter-state supplies information and blocked or ineligible input-tax-credit

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 As you have got a comprehensive idea about GSTR 3, now check out its benefits:

• Filing GSTR 3 will cut the extra burden and compliance costs by providing information about taxable supplies to the businesses
• It helps businesses to pay accurate taxes by identifying the tax supplies properly
• It makes businesses more transparent to the government by calculating their actual taxes on supplies

Late filing of GSTR 3 will cause a penalty charge of ₹ 20. However, there are a few more explanations for GSTR 3 penalty which are as follows:

• Taxpayers with nil-tax-liability have to pay ₹ 20 every day which comprises ₹ 10 for CGST and ₹ 10 for SGST after the due date and the highest amount is ₹ 500
• Late fee for supplies within intra-state is ₹ 50 per day which comprises ₹ 25 for CGST and ₹ 25 for SGST

GSTR 3 is a must and the GST system fills certain parts of it automatically from the information and documents provided in GSTR 1 and GSTR 2. The article has presented a comprehensive discussion on what GSTR 3 is and other related important details for your help. However, you can access any other necessary information by visiting the official portal of GST.

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