How to file the GST Monthly Return in India – A GST Return Filing Guide

Introduction

Every law has a procedural part and returns are considered above of all. An unambiguous and clear procedure helps the government to implement the act smoothly. Further, an efficient system of compliance helps the government of establishing ease in doing business.

Further, from taxpayer point of view, the filing of correct returns is very important and it is the way by which government gets to know about your running operations and it keeps a check that there is no non-compliance based on the information supplied via returns.

Hence, it is very important to file a neat and clear returns and file uniform information across different act’s, so that any mismatch of data does not occur. Nowadays, with the advent of technology, government compares the information collected through different sources. Hence, any mismatch of data attracts the taxman eye and then results in taxman interference in the case.

Furnishing Details of Outward and Inward Supplies – Procedure and flow

1. Every registered taxable person [other than an input service distributor, a nonresident taxable person, person covered under composition scheme, TDS or TCS] shall furnish, electronically, in FORM GSTR – 1, the details of outward supplies of goods or services effected, during a tax period on or before the tenth day of the month succeeding the said tax period.

Analysis of Point 1

(a) “Details of outward supplies” shall include details of invoices, debit notes, credit notes and revised invoices issued in relation to outward supplies made during any tax period.

The above is the inclusive definition and this valid for above point only. However, the general definition of outward supply is as under;

“Outward supply” in relation to a person, shall mean supply of goods or services, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other means made or agreed to be made by such person in the course or furtherance of business;

(b) The commissioner may extend time limit for furnishing the details only against the valid and sufficient reasons. Further, any extension of time limit approved by the Commissioner of [Central / State] Goods and Services Tax shall be deemed to be approved by the Commissioner of [State/Central] Goods and Services Tax.

2. The details of outward supplies furnished by the supplier shall be made available electronically to each of the registered taxable persons (recipients) in Part A of FORM GSTR-2A through the Common Portal after the due date of filing of FORM GSTR-1.

3. After getting the information from the supplier about the outward details in FORM GSTR – 2A, the recipient shall verify the details of the return with the actual.

• He shall verify, validate, modify or, if required, delete the details relating to outward supplies and credit or debit notes communicated to prepare the details of his inward supplies and credit or debit notes and may also include the return details of inward supplies and credit or debit notes received by him in respect of such supplies that have not been declared by the supplier in his return in FORM GSTR – 1.
   
• After verification, every registered taxable person, [other than an input service distributor, a non-resident taxable person, person covered under composition scheme, TDS or TCS] shall furnish, electronically, the details of inward supplies of taxable goods and/or services, including
  • Inward supplies of goods or services payable on reverse charge basis;
  • Inward supplies of goods and/or services taxable under the IGST Act;
  • Credit or debit notes received in respect of such supplies during a tax period

after the tenth but on or before the fifteenth day of the month succeeding the tax period in FORM GSTR – 2.

• The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 or FORM GSTR-4 [composition scheme] shall be made available to the supplier electronically in FORM GSTR-1A through the Common Portal.
   
• Such supplier may either accept or reject the modifications made by the recipient on or before the seventeenth day of the month succeeding the tax period and FORM GSTR-1 furnished by the supplier shall stand amended to the extent of modifications accepted by him.

4. If the details provided remained unmatched, then upon discovery of any error or omission therein, the person shall rectify such error or omission in the tax period during which such error or omission is noticed and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period.

Summary of the above Provisions and the connection between the two returns

Important point to take care off before furnishing details for inward supplies

• The recipient of goods and/or services shall specify the inward supplies in respect of which he is not eligible, either fully or partially, for input tax credit in FORM GSTR-2 where such eligibility can be determined at the invoice level.
   
• The recipient of goods and/or services shall declare the quantum of ineligible input tax credit on inward supplies which are relatable to non-taxable supplies or for purposes other than business and cannot be determined at the invoice level in FORM GSTR-2.

Consolidated Monthly return with inward and outward bill summary

• Every registered taxable person, [other than an input service distributor, a nonresident taxable person, person covered under composition scheme, TDS or TCS] shall, for every calendar month or part thereof, furnish a return electronically of inward and outward supplies of goods and/or services, input tax credit availed, tax payable, tax paid and other particulars on or before the twentieth day of the month succeeding such calendar month or part thereof in the FORM GSTR – 3.

Important points

(a) Part A of the return under sub-rule (1) shall be electronically generated on the basis of information furnished through returns in FORM GSTR-1, FORM GSTR-2, electronic credit ledger, electronic cash ledger and electronic tax liability register of the taxable person.

(b) Every registered taxable person furnishing the return shall discharge his liability towards tax, interest, penalty, fees or any other amount payable under the Act or these rules by debiting the electronic cash ledger and/or electronic credit ledger as per the details contained in Part B of the return in FORM GSTR-3.

(c) A registered taxable person, claiming a refund of any balance in the electronic cash ledger may claim such refund in Part B of the return in FORM GSTR-3 and such return shall be deemed to be an application filed under section 48.

(d) Where the time limit for furnishing FORM GSTR-1 and FORM GSTR-2 has been extended, return in FORM GSTR-3 may be furnished in such manner as may be notified by the Commissioner/Board.

(e) Due date of payment of tax: a registered taxable person, who is required to furnish a return under this clause, shall pay to the account of the appropriate Government the tax due as per such return not later than the last date on which he is required to furnish such return. In simple words, tax payment to be made on or before the twentieth day of the month succeeding such calendar month or part thereof.

(f) Every registered taxable person shall furnish a return for every tax period whether or not any supplies of goods or services have been effected during such tax period.

Conclusion

In the above article, we have explained the basic concept of the monthly return. In case you have any query, you may email us at agam@hubco.in or paras@hubco.in.