How to File GSTR 3b?

Last updated : August 23rd, 2024 02:39 pm

How to File GSTR 3b?

Filing the GSTR-3B form is a critical monthly obligation for businesses under the GST regime in India. This simplified return summarises inward and outward supplies, helping businesses manage their tax liabilities without delving into the complexities of detailed invoice reporting. This guide aims to streamline the process, providing a step-by-step procedure on “How to File GSTR 3b?” to help businesses file their GSTR-3B efficiently and accurately.

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GSTR 3B

The GSTR-3B, a simplified summary return introduced by the Government of India, is filed monthly or quarterly by all regular taxpayers. This form consolidates sales, input tax credit claims, taxes paid, and refunds claimed. It was designed to streamline the transition to the GST system, especially to accommodate the unique challenges small and medium businesses face using manual accounting methods.

By implementing GSTR-3B, the government provided a straightforward mechanism to simplify tax reporting and ease the administrative burden on these businesses.

Read our detailed Guide on GSTR-3B

Latest  Updates:

As per the GST Council’s 45th meeting, If Form GSTR-1 is submitted after its due date, the associated late fee is automatically included and payable with the subsequent filing of Form GSTR-3B. Taxpayers are required to have filed Form GSTR-3B for the previous month before they can file Form GSTR-1.

When to File GSTR 3B?

GSTR-3B must be filed monthly by the 20th of the following month. For example, the GSTR-3B for August should be filed by the 20th of September. However, for small taxpayers with an aggregate turnover of up to 5 crores, there is an option to file GSTR-3B on a quarterly basis.

The tax liability will auto-populate from GSTR-3B to GSTR-1 when filing returns.

Details and Documents Required for Filing GSTR-3B

To accurately file GSTR-3B in India, taxpayers must gather and submit specific details and documents concerning their monthly business activities. This return captures information about sales, purchases, and input tax credits (ITC), which are crucial for maintaining GST compliance. Below is a breakdown of the required details and their purposes:

• GSTIN: Each GST-registered individual or entity is assigned a unique 15-digit Goods and Services Tax Identification Number (GSTIN), which is essential for filing the GSTR-3B.
• Turnover Details: Comprehensive details must be provided regarding taxable, exempt, and export supplies made within the reporting period.
• Input Tax Credit Details: Taxpayers must report the ITC claimed on purchases. This includes details of invoices, the amount of tax paid, and adjustments for any credits that are not eligible.
• Payment of Tax: The tax due on outward supplies must be calculated and paid. Taxpayers can use the available ITC in their electronic credit ledger to offset this tax liability.
• Other Details: Additional information may be required, such as the method of tax payment (whether through self-assessment or deductions like TDS/TCS), any applicable late fees or interest, and adjustments from previous periods.

Prerequisites for Filing GSTR-3B

Businesses required to file monthly returns, such as GSTR-1, GSTR-2, and GSTR-3, must also submit the GSTR-3B form. This form can be filed online via the GSTN portal, and the associated tax payments can be made through challans at banks or via online payment methods.

To verify the return, you need either an OTP from your registered phone for an Electronic Verification Code (EVC) or a Class 2 or higher Digital Signature Certificate. Alternatively, you can file your GST returns using an Aadhaar-based e-signature.

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How to file GSTR 3b?

Filing GSTR-3B is a crucial process for taxpayers under the GST regime. Below is a detailed step-by-step guide to help you file GSTR-3B efficiently on the GST Portal:

• Step 1: Log in to the GST Portal. Upon accessing the homepage, you can view the return filing status for the last five tax periods.

• Step 2: Navigate to ‘Services’ > ‘Returns’ > ‘Returns Dashboard’ to proceed with your filing.

• Step 3: On the ‘File Returns’ page, select the appropriate ‘Financial Year’, ‘Quarter’, and ‘Return Filing Period – Month or Quarter’ from the drop-down menus. Click the ‘SEARCH’ button to continue.

Important Note: For those submitting quarterly returns, remember to file Form GSTR-3B for the final month of the quarter. The GSTR-3B form will not be accessible for the first two months of any quarter.

Additional Information for MSMEs: If you are registered as a Micro, Small, or Medium Enterprise (MSME) and are interested in applying for a Mudra Loan of up to Rs.10 lakh or an MSME loan of up to Rs.5 crore, you can fill out a consent form by clicking the ‘click here’ hyperlink provided at the bottom of your screen.

• Step 4: On the ‘Monthly Return GSTR-3B’ title, click the ‘PREPARE ONLINE’ button. The due date for the filing will also be displayed, helping you manage your deadlines effectively.

• Step 5: You will be prompted with a list of questions; respond to them by selecting ‘Yes’ or ‘No’. Your answers will determine which tables and fields are necessary for you to complete in the following steps of the process.

For taxpayers needing to file a ‘Nil’ return, select ‘Yes’ for the first question and proceed directly to step 10. To simplify the process of filing a ‘Nil’ GSTR-3B, consider using our LEDGERS Software, which allows you to file easily GSTR 3B easily.

• Step 6: Begin by entering the required values in each section of the GSTR-3B form. Input totals for each relevant head and add details for interest and late fees, if applicable.

Verification of Details: You can check the auto-generated details of your GSTR-3B in the “SYSTEM GENERATED GSTR-3B” tab. This section allows you to download and review details populated from Forms GSTR-1 & GSTR-2B (whether filed monthly or quarterly). You have the flexibility to edit these auto-populated values as necessary and continue with your filing; the system will not restrict edits.

Specific Details to Enter:

• Outward and Inward Supplies: Enter summary details of outward and inward supplies liable to reverse charge and applicable taxes. Note that only Table 3.1 (d) is typically auto-populated from GSTR-2B.
• Interstate Supplies: Detail interstate supplies made to unregistered persons, composition taxable persons, and UIN holders. Taxes for these transactions should be entered according to the place of supply, with data from GSTR-1 available for editing if needed.
• Input Tax Credit: Provide summaries of eligible input tax credits claimed, input tax credits reversed and ineligible input tax credits.
• Exempt, Nil, and Non-GST Supplies: Record details of exempt, Nil-rated, and Non-GST inward supplies, categorized as intra-state or inter-state supplies.
• Interest and Late Fees: Enter details under each tax head (IGST, CGST, SGST/UTGST, and Cess). The system calculates late fees based on the days past the filing due date.
• Editing Entries: You can modify the entries by clicking on ‘ADD’ or ‘DELETE’ for each tile. After entering data in a tile, click ‘CONFIRM’ to save the changes.

Note: For those opting to file both GSTR-1 and GSTR-3B quarterly and using the IFF (Invoice Furnishing Facility) for the first two months, details are generated monthly in PDF format for your records.

• Step 7: Once all relevant details have been entered, click the ‘SAVE GSTR-3B’ button at the page’s bottom. This button is also available on the main GSTR-3B page, allowing you to save your progress at any point and return later to make edits. Upon saving, a confirmation message will appear at the top of the page indicating that the data has been successfully stored. Remember, after submitting the form, the data becomes locked, and no further changes can be made. The Input Tax Credit (ITC) and Liability ledger will be updated upon submission.
• Step 8: To review your entries before the final submission, click ‘PREVIEW DRAFT GSTR-3B’. This allows you to see a draft of your return and ensure all information is accurate before proceeding.
• Step 9: After reviewing and submitting your GSTR-3B, the ‘Payment of Tax’ tile will become active. To proceed with payment, follow these steps:
  • Check Balance: Click the ‘CHECK BALANCE’ button to view the cash and credit balances in your Electronic Cash Ledger. This helps ensure that you have sufficient funds to cover the tax liabilities.
  • Proceed to Payment: Click on the ‘Proceed to Payment’ tile. Your tax liabilities and credits are updated in the ledgers and displayed in the payment section’s ‘Tax payable’ column.
  • Offset Liabilities: Enter the amount of credit you wish to use from the available credits to settle the liabilities. Ensure that you follow the credit utilization rules; otherwise, the system may not allow the offsetting of liabilities.
  • Confirm Payment: Click the ‘OFFSET LIABILITY’ button. A confirmation message will be displayed. Click ‘OK’ to finalize the payment.

Handling Insufficient Funds:

• • If the cash balance in the Electronic Cash Ledger is less than the amount required to meet the liabilities, click on the ‘CREATE CHALLAN’ button to generate a challan for additional payment.
  • If the cash balance exceeds the amount needed, but ITC utilization rules prevent offsetting, click on ‘MAKE PAYMENT/POST CREDIT TO LEDGER’ to adjust the ledger accordingly.
  • These steps ensure that your GSTR-3B return is not only submitted accurately but also that your tax liabilities are settled in compliance with GST regulations.

• Step 10: After ensuring all information is accurate and payments are settled, proceed to the legal formalities of filing the return. Select the checkbox to agree to the declaration confirming the authenticity and accuracy of the information provided. Then, choose the appropriate authorized signatory from the ‘Authorised Signatory’ drop-down list. You can file the GSTR-3B using either the Digital Signature Certificate (DSC) or the Electronic Verification Code (EVC) by clicking on the corresponding button, ‘FILE GSTR-3B WITH DSC’ or ‘FILE GSTR-3B WITH EVC’.
• Step 11: To finalise the filing process, click the ‘PROCEED’ button. A confirmation message will appear once the filing is successful. Click the ‘OK’ button to acknowledge this message.

After these steps, the status of your GSTR-3B return will be updated to ‘Filed’. You can review the filed return by clicking on the ‘VIEW GSTR-3B’ button. This allows you to check the submitted information and ensure everything is in order, providing a record of your compliance for that tax period.

Penalty for Late Filing of GSTR-3B

GSTR-3B is a mandatory return for GST-registered individuals and entities in India. Timely filing of this return is crucial to avoid penalties, interest, the forfeiture of input tax credit (ITC), and potential legal actions. Here are the key consequences of not filing GSTR-3B by the prescribed due date:

• Late Fee: A late fee is levied if GSTR-3B is not filed by the due date. The fee is ₹50 per day for taxpayers with a tax liability and ₹20 per day for those with nil tax liability. The maximum late fee is capped at ₹2,000 for businesses with an annual turnover up to ₹1.5 crores, ₹5,000 for turnovers up to ₹5 crores, and ₹10,000 for turnovers exceeding ₹5 crores.
• Interest: Interest at 18% per annum is charged on the outstanding tax liability. This interest is calculated from the due date of the return until the tax is fully paid.
• Loss of Input Tax Credit (ITC): Delay in filing GSTR-3B results in the loss of ITC for the month, which means the taxpayer cannot claim ITC for that period in subsequent returns.
• Legal Action: Consistent failure to file GSTR-3B or deliberate tax evasion can trigger legal proceedings under GST laws.
• Restriction on Filing GSTR-1: From January 1, 2022, taxpayers who do not file GSTR-3B for the previous month are barred from filing GSTR-1 for the current month. This rule also applies to those on the Quarterly Return Monthly Payment (QRMP) scheme who fail to file their quarterly GSTR-3B, preventing them from using the Invoice Furnishing Facility (IFF).

Conclusion

From this guide, you’ve learned how to file the GSTR-3B online via the GST portal. Remember, filing the GSTR-3B return is a mandatory aspect of GST compliance for businesses in India. To ensure accuracy and ease in managing your GST filings, consider consulting with our GST experts.

Read our article – Difference Between GSTR 1 and GSTR 3b

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