All about GSTR 3B

CA Prasad P Bhalerao

It’s been one month since the GST has kicked in. How this month has been? Eventful, at least for us at I+B. We have been neck deep in studying the law, notifications, circulars, tweets (yes, tweets) answering queries and trying to clear the air based on our understanding of the law.

Last week, the functionality to upload invoices on the GST portal was activated and of course we did a trial run for a few of our clients. Results of this trial are both, encouraging as well as concerning. Encouraging because we could easily upload the data and were able to see the invoices uploaded by our vendors (very few of them). Concerning because of the time it took to upload the invoices and the sparse number of invoices uploaded by vendors. This again underscores the fact that the weakest link the whole chain could be your vendors.

Now we need to focus our attention to the next goal post, GSTR 3B, due on August 20. The 17^th GST Council meeting held on 18th June 2017, provided a sense of relief by mandating a summarized return for July and August on or before August 20 and September 20 respectively. The full returns GSTR 1 and GSTR 2 are due 5^th September onwards.

GSTR 3B is divided into following 8 parts:

1. Header

2. Details of Outward Supplies and inward supplies liable to reverse charge

3. Details of inter-State supplies made to unregistered persons, composition taxable persons and UIN holders

4. Computation of eligible ITC

5. Details of exempt, nil-rated and non-GST inward supplies

6. Details of Tax payment and

7. Details of TDS/TCS

8. Verification

1. Header

In the header, the period of return (month and year) and GSTIN of the entity has to be mentioned. The legal name shall be auto populated.

2. Details of Outward Supplies and inward supplies liable to reverse charge

This part mandates classification of total outwards supplies into following categories –

• Outward taxable supplies (other than zero rated, nil rated and exempted)
• Outward taxable supplies (zero rated) [e.g. exports; supplies to SEZ]
• Other outward supplies (Nil rated, exempted)
• Inward supplies (liable to reverse charge) [e.g. import of services; procurements from unregistered persons]
• Non-GST outward supplies

Valuation; type of tax and amount of tax is required to be given under the above categories.

3. Details of inter-State supplies made to unregistered persons, composition taxable persons and UIN holders

This part requires particulars of inter-state sales to unregistered persons, composition dealers and to UIN holders. This part mandates separate reporting for each “place of supply” (state/UT). This part is only for inter-state supplies to unregistered persons, composition taxable persons and UIN  holders and not to intra-state supplies.

4. Computation of eligible ITC

This is a very important part as this would have a direct bearing on the tax liability to be paid with the return. ITC would be available based on basis of conditions prescribed under Section 16 of the CGST Act. There are certain situations where it is mandatory to reverse the ITC, such as, non­payment within 180 days, goods lost/stolen/destroyed/free samples etc. Section 17 prescribes situations where ITC is not available. After making all these adjustments, computation of eligible ITC involves following 4 steps –

a. ITC available –

b. ITC reversed –

c. Ineligible ITC –

5. Details of exempt, nil-rated and non-GST inward supplies

Here details of exempt; nil-rated and non-GST input supplies are to be furnished. Procurements from composition dealers are also to be furnished here. Non-GST input supplies could be the products which are outside the ambit of GST, such as, petroleum products.

6. Details of Tax payment

Based on all the above steps, tax payable shall be computed and details of tax payment has to be furnished. Tax could be paid via ITC (refer pt. 5 above); under TDS/TCS (refer pt. 7 below) or by way of cash (remittance into the bank). Total tax payment under this part must reconcile with the tax liability; ITC; TDS/TCS and cash payments made.

7. Details of TDS/TCS

In certain cases (e.g. e-commerce aggregator) GST requires TDS/TCS to be deducted. This part requires furnishing of amount of TDS and TCS credit under IGST; CGST and SGST/UTGST.

8. Verification

Lastly, the return has to be verified by the authorized signatory that the information furnished in the return is true and correct and no information has been concealed.

Conclusion:

Even though GSTR 3B is a summarized return as no invoice level uploading is required, it is utmost important to have as many details as possible and the same should be reviewed carefully before arriving at the tax liability and the eligible ITC.

Also, apparently, there’s no provision for claiming ITC of earlier tax laws transferred through TRAN 1, even though the same has been filed before GSTR 3B.

About I+B

I+B is a Pune (India) based firm of Chartered Accountants and Business Advisors. We are an A-Team of finance professionals on a mission to help businesses improve their profitability. We work closely with businesses of varied size and industries to grow their business profitably. We deliver cutting edge solutions in the domains of assurance, tax, advisory and outsourcing.

I+B has experience of more than 100 GST implementations of various size and industries. I+B has designed a suite of services to ensure businesses deal with the above and many other challenges swiftly. I+B’s GST Compliance Solutions are designed and delivered by in-house experts and is powered by cutting edge technology.

Disclaimer

The above piece of information is only a gist of quoted regulatory provisions and does not constitute an advice on any particular matter. Professional advice must be sought before acting upon this update. I+B expressly disclaims any liability of whatsoever nature arising out of any action taken on the basis of this update. Without prior permission of I+B, this update may not be quoted, in whole or in part or otherwise referred to in any communications.

New GST Rate on Services