GSTR-3B and GSTR-1 reconciliation

GSTR-3B and GSTR-1 Reconciliation

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GSTR-3B and GSTR-1 Reconciliation

Goods and Service Tax (GST) is a destination based levy and introduction of the same has subsumed various Central taxes and State taxes. The transaction of inter-state supplies of goods or services to the unregistered person needs to be reflected in both the returns FORM GSTR-3B and FORM GSTR-1. Currently, the trade practice that is being followed is that many registered person is not reflecting the transaction of inter-state supplies of goods or service to the unregistered person in FORM GSTR-3B, however, the same is being reflected in FORM GSTR-1. Due to such trade practice, there arises a mismatch in the quantum of goods or services or both that are actually being supplied in a State and the amount of integrated tax apportioned between the Centre and the State. In order to solve the above-mentioned issue, the Central Board of Indirect Taxes and Customs issued circular no. 89/08/2019-GST dated 18th February 2019. In this article, we look at the procedure for GSTR-3B and GSTR-1 reconciliation as per the above notification.

No Late Fee for GSTR-1 & GSTR-3B Return

The biggest relief extended to small business by the 31st GST Council is the waiver of late fee for filing GSTR-1 and GSTR-3B return. The GST Council has announced:

“Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.”

Thus, filing of Form GSTR-1, GSTR-3B and GSTR-4 will not attract any late fee penalty until 31st March 2019.

GST Annual Return Due Date Extended

All entities having GST registration are required to file GST annual return in form GSTR-9. The due date for filing GST annual return is usually 31st December of each year for the financial year ended on 31st March of the same calendar year. As GST is newly introduced in India, the Government has decided to extend the due date for GST annual return filing to 30th June 2019. The due date for filing GST annual return was originally extended upto 31st March 2019, which has been further extended to 30th June 2019 by the GST Council.

Due Dates Modified

The Government has recently deferred the due date for filing GSTR 1 from the 11th of April to the 13th.  Apart from this, the following are the due dates for filing GSTR 1 for the months of April, May and June 2019:

  • April 2019 – 11th May 2019
  • May 2019 – 11th June 2019
  • June 2019 – 11th July 2019

It can be inferred from the above that the due dates for filing these returns fall on the 11th of every succeeding month of filing. The deadline for the filing quarterly GSTR 1 for the quarter of April-June is 31st July 2019.

Import of E-way Bill Data

It is essential for taxpayers to validate the data of their transactions before proceeding with the process of filing returns, as it saves time and unnecessary data entry.  To cater to this purpose, the GST portal has now been integrated with the E-way Bill Portal (EWB). The integration enables the users to import the B2B and B2C invoice sections and the HSN-wise-summary of outward supplies section. Using these details, the taxpayers may verify the data and complete the filing.

The feature has been introduced considering the major data gaps between self-declared liability in Form GSTR 1 and Form GSTR 3B. A similar rule also applies to Input Tax Credit (ITC) claimed in GSTR 3B, as it could be compared with the credit available in Form GSTR 2A.

Data validation and comparison can be pursued through the following tabs of the portal:

  • Liability other than export/reverse charge
  • Liability due to reverse charge
  • Liability due to export and SEZ supplies.
  • ITC credit claimed and due

On a more precise note, the newly launched facility takes away the taxpayer’s need to make specifications connected with the e-way bill transactions specified in GSTR 3B as it allows the taxpayers to import data in Form GSTR 1 for all invoices for which the e-way bill has been generated. The particulars so imported would include the details of supplier, receiver, invoice number, the date of invoice, the type and quantity of goods, HSN Code, etc. These details are then transferred to the GST portal and classed into three categories to be used in GSTR 1 – namely, Business to Business Supplies (B2B), Business to Consumer (B2C) supplies (covering values of above Rs. 2.5 lakhs) and HSN (Harmonized System of Nomenclature Code for goods and services) wise consolidated supply data.

Taxpayers with more than 50 invoices but not more than 500 may download the data of the sections mentioned above in the ‘CSV’ file format, which can be imported into the GSTR1 offline tool. The form could then be filed through the offline tool after adding sufficient data and generating a JSON file, which can be uploaded on to the GST portal.

If the number of invoices is above 500, the invoice details pertaining to these sections can be imported from the ‘Return’ Dashboard on the GST portal as a zip file. This can later be unzipped to three files and extracted in Excel format. The taxpayer may then add more invoices and fill the other sheets to upload in the offline tool.

No Late Fee for GSTR-1 & GSTR-3B Return

The biggest relief extended to small business by the 31st GST Council is the waiver of late fee for filing GSTR-1 and GSTR-3B return. The GST Council has announced:

“Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.”

Thus, filing of Form GSTR-1, GSTR-3B and GSTR-4 will not attract any late fee penalty until 31st March 2019.

GST Annual Return Due Date Extended

All entities having GST registration are required to file GST annual return in form GSTR-9. The due date for filing GST annual return is usually 31st December of each year for the financial year ended on 31st March of the same calendar year. As GST is newly introduced in India, the Government has decided to extend the due date for GST annual return filing to 30th June 2019. The due date for filing GST annual return was originally extended upto 31st March 2019, which has been further extended to 30th June 2019 by the GST Council.

Reconciliation

The below mentioned table provides the details of how and where the inter-state supplies to the unregistered person need to be reflected in FORM GSTR-3B and GSTR-1 –

Relevant Return

Table No.

Particulars

FORM GSTR-3B Table 3.2 Details of inter-state supplies made to the unregistered persons, composition taxable person and UIN holders
FORM GSTR-1 Table 7B Details of all the inter-state supplies made to the unregistered persons where the invoice value is up to INR 2.5 Lakhs (rate-wise)

Clarification by the Board

The Central Board of Indirect Taxes and Customs, vide circular no. 89/08/2019-GST dated 18th February 2019, has provided the below clarification:

The transaction of inter-state supplies to the unregistered person by the registered person is mandatory to be reflected, along with the place of supply, in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1.

In case there is any contravention in reflecting of the said entries, in the said FORM GSTR-3B and FORM GSTR-1, penal action under provisions of section 125 of the CGST Act would be initiated.

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