All about GSTR-3 Consolidated return with FAQs

GSTR-3 is a consolidated return filed by the taxpayer based on GSTR-1 and GSTR-2. GSTR-3 provides the details of tax liability for a given tax period and details of tax paid. GSTR-3 provides details of gross turnover, export turnover, exempted domestic turnover, Nil rated turnover, Non GST turnover and Net taxable turnover.

Introduction

1. Who is required to furnish GSTR 3?

All normal taxpayers including casual dealers and non-resident taxable persons shall file GSTR 3 through the GST web portal, offline utility provided by the GSTN, or using the services of a GST Suvidha Provider (GSP).

2. Is there any taxpayer who is not required to file GSTR 3?

Yes, the input service distributors (ISD), compounding taxpayers and tax deducted at source (TDS) deductors are not required to file GSTR 3.

3. What is the mode of filing GSTR 3 with the authorities?

GSTR 3 can be submitted online on the GST portal, offline using the offline utility provided by GSTN, or using the services of a GST Suvidha Provider (GSP).

GSTR 3 can be filed by the taxpayers themselves or by a tax return preparer (TRP) registered on the GST portal.

4. What are the details to be provided through GSTR 3?

GSTR 3 is a consolidated return filed by the taxpayer based on their GSTR 1 and GSTR 2.

GSTR 3 provides the details of tax liability for a given tax period and the details of tax paid. GSTR 3 also provides details of gross turnover, export turnover, exempted domestic turnover, nil rated turnover, non-GST turnover, and net taxable turnover.

5. What is the due date for filing GSTR 3?

GSTR 3 needs to be filed by 20th of the succeeding month following the end of month for which it is filed. Late filing would be permitted only on payment of late fee.

Example: For the tax period 1st July 2017 to 31st July 2017, GSTR 3 needs to be filed by 20th August 2017.

6. Can the date of filing GSTR 3 be extended?

Yes, the date of filing GSTR 3 can be extended by the Board/Commissioner by notification.

7. Can I file my GSTR 3 for a tax period if I have not filed the GSTR 3 for a previous tax period?

No. You cannot file your GSTR 3 if you have not filed the same for a previous tax period.

8. Am I required to file the GSTR 3 even if there are no transactions during the tax period?

Yes. GSTR 3 needs to be filed even if there is no business activity during the period of return. You may file a nil return in such a case.

9. What is the fee to be paid for late filing?

Late fee is payable if you file your GSTR 3 after the due date.  The late fee will be auto calculated only after filing of the return.

Late fee for filing of GSTR 3 is INR 100 per act applicable based on the type of sales done by the taxpayer i.e. inter-state sales or intra-state sales, or both. Late fee of INR 300 per day shall be applicable if GSTR 3 is filed after the due date till the actual date of filing of GSTR 3 including date of filing.

10. When will a return filed by me be considered invalid?

Your GSTR 3 for a month will be invalid if it is filed without the payment or with partial payment of liabilities. Once you discharge all liabilities as per the return, only then will your GSTR 3 return be considered valid.

11. What are the pre-conditions for a taxpayer filing GSTR 3?

Preconditions:

1. Taxpayer should be a registered taxpayer and should have a valid/active GSTIN.

2. Taxpayer should have valid user ID and password.

3. Taxpayer should also have valid & non-expired/non-revoked digital signature (DSC) in case of taxpayer for whom digital signature is mandatory. Alternatively, taxpayer should have a valid Aadhaar number with updated mobile number if they want to use e-sign.

4. GSTR 1 and GSTR 2 of the taxpayer for the same tax period have been filed successfully.

5. For cancelled GSTINs, taxpayer will have an option to file GSTR 3 for period after the date of cancellation however it will not be mandatory.

12. What is the procedure to file GSTR 3?

For preconditions, refer to point 11.

Step Action description

MF-1 • Taxpayer accesses the GST portal and landing page appears.

• • Taxpayer logs into GST portal using their login ID and password.
  • Taxpayer selects the Services menu and navigates to Returns > Returns Dashboard
  • Taxpayer selects Financial year and tax period (calendar month).
  • All returns for the selected tax period will be displayed as boxes/tiles.
  • Taxpayer will click the GENERATE button in the GSTR 3 box/tile.

MF-2 A button for ‘Utilize Cash/ITC’ shall be provided for making the payment. However, taxpayer will not be able to pay taxes//interest/late fee for the current month if the tax/interest/late fee arising out of return filed for a previous period has not been paid. Appropriate error message will be shown to the taxpayer.

MF-3 On clicking the above button, the following will be displayed:

a. The liability arising out of return

b. Cash balance as per electronic cash ledger

c. ITC available for the current tax period (provisional ITC) as per electronic credit ledger

ITC available for the previous tax period (realised ITC) as per electronic credit ledger

MF-4 Thereafter, the taxpayer will be facilitated to pay liability arising out of return of the current tax period by utilizing the credit of ITC and cash balances as per the business rules (refer to Utilise Cash/ITC)

d. After making payment of tax/interest/fee, the details will be auto populated along with the debit entry numbers generated on utilization of ITC and cash balances

MF-5 In case liabilities are not paid in full by the taxpayer, an information message will pop up seeking confirmation to proceed further.

MF-6 The debit entry from cash balance available in the electronic cash ledger and previous tax period ITC available in ITC ledger shall be considered as final entries and shall not be reversed even if GSTR 3 return is not filed on the day of creation.

The debit entry made from the provisional ITC available in the electronic credit ledger shall be considered as a provisional entry and will be reversed if valid return is not filed on the same day on which it is created.

MF-7 In case the taxpayer doesn’t create and file the return on the same day, then the temporary entries (interest and late fee calculation and current month ITC utilization entries) shall automatically be undone. The taxpayer needs to compulsorily re-compute the updated liability of Interest and Late fee, if any, and the same shall be auto populated accordingly. Further, Taxpayer would be required to again utilize the provisional ITC.

MF-8 Post payment of liability, Taxpayer would click on the button to affix his DSC/E-signature.

MF-9 If the taxpayer opts to attach DSC, he will attach DSC of the selected Authorised Signatory mentioned in the Form. In case the DSC attached is not registered on GST Portal or any other technical issue arises while attaching the DSC, error messages to that effect shall be displayed on the screen.

MF-10 If the taxpayer opts to ‘E-sign’, the system will invoke an API which will request UIDAI to send OTP. AADHAR will be sent the OTP to the email and mobile registered against AADHAR number. System will prompt user to enter the OTP. Taxpayer will fill OTP in the form. OTP will be verified by the system.

MF-11 The user clicks on file button for final submission of return. On successful filing of GSTR 3 return, an informational message shall be displayed.

MF-12 An acknowledgment number shall be generated and displayed. The acknowledgment will contain details like

i. Acknowledgement Reference Number (ARN)

ii. Date & Time Stamping of filing of the return

iii. GSTIN of Tax payer

iv. Relevant Tax period

Gross Supplies, taxable supplies, tax paid/refund claimed.

MF-13 v. The taxpayer can view /print /save the return filed in PDF or other formats for future reference.

MF-14 ARN will also be sent as an SMS as well as through email.

MF-15 The filed return shall be saved in the Record Search in the Taxpayer’s records with Tax officials.

MF-16 In case GSTR 3 is not filed till the due date of filing of GSTR 3, notices and SMS will be automatically sent.

13 What are the post-conditions for a taxpayer filing GSTR 3?

1. ARN will be generated on successful filing of the return whether by online or offline mode.
2. An SMS and email shall be sent to the taxpayer on successful submission of return.
3. An SMS and email shall be sent to the taxpayer on submission of an invalid return and ARN will only be generated after the payment of the balance liabilities.
4. On payment of tax through GSTR 3, electronic credit ledger and electronic cash ledger will get updated.
5. Once the return is submitted after affixing digital signature or E-sign as the case may be, the return will be passed on to both (i) CBEC (Central Board of Excise and Customs) and (ii) State of registration

14. Can I file my GSTR 3 without filing my GSTR-1 and GSTR 2?

No, you can only file your GSTR 3 for a given tax period when GSTR 1 and GSTR 2 for the same tax period have been filed successfully.

15. How is the self-verification of the return done?

Post payment of liability, taxpayer has to affix his DSC/E-signature.

If the taxpayer opts to attach DSC, they will attach DSC of the selected/registered Authorised Signatory mentioned in the form.

If the taxpayer opts to use E-sign, system will invoke an API which will request UIDAI (Aadhar) to send OTP. UIDAI will send the OTP to the email and mobile registered against the Aadhar number. System will prompt the user to enter the OTP. Taxpayer will enter the OTP in the form. The OTP will be verified by the system and the taxpayer will then do the final submission.

16. When is a non-resident taxable person required to file GSTR 3?

Non-resident taxable persons who intend to procure local supplies and avail ITC of the tax paid on inward supplies can obtain a GSTIN like any other normal dealer. In such a case, they will have to file GSTR 3.

17. A normal taxpayer cannot file GSTR 3 before the end of the current tax period. Is there any exception?

GSTR 3 can be filed only after the tax period is over except in the case of Casual Taxpayers and cancelled registrations.

Casual Taxpayers must file their GSTR 3 within 7 days of expiration of their registration or by the 20th of the month succeeding the tax period, whichever is earlier. For cancelled registrations, GSTR 3 can be filed after the date of cancellation even if it is before the end of the current tax period.

Amendment to invoices, mismatch, and tax & interest computation

1. Can I rectify an error or omission that remained unmatched?  Can my GSTR 3 be revised?

Yes, you can rectify an error or omission that remained unmatched in the tax period during which such an error or omission is noticed. You have to pay the tax and interest in the return to be furnished in the period during which the error or omission was noticed.

Yes, GSTR 3 can be revised before filing of return for the month September of the succeeding financial year (01-02) or filing of the annual return GSTR 9 of the relevant financial year (00-01), whichever is earlier.

2. How do I come to know of my final tax liability in a given tax period?

On generation of GSTR 3, your liability (tax/interest/late fee) will be computed and shown.

3. What happens if I don’t pay the full tax liability as calculated by the system?

Even if you don’t make the payment or make a part payment, you shall be in a position to file the GSTR 3 after DSC/ E-sign. However, the return will be considered invalid and only a transaction ID will be generated on invalid filing of return. Once you make the balance payment, only then will it be considered a valid GSTR 3 for the tax period. ARN will also be generated only on full payment of all liabilities as per the GSTR 3.

4. Can GSTR 3 for the current period be filed if the taxes, late fee, interest etc. are pending from the last tax period?

No, you cannot file your GSTR 3 for the current tax period until you completely discharge all pending liabilities along with applicable interest, if any.

5. What are TDS and TCS credits and how are they used to set-off the tax liability?

TDS: Any amount of tax deducted at source by a receiver taxpayer or consumer while making payment(s) in lieu of supply of taxable goods and/or services to the supplier is known as TDS credit and the same can be set-off against the tax liability of the supplier as per the given rules.

TCS: Any amount of tax collected at source by an e-commerce operator while making payment(s) in lieu of supply of taxable goods and/or services to the supplier is known as TCS credit and the same can be set-off against the tax liability of the supplier as per the given laws.

6. How is the tax credit set-off against the tax liability calculated in GSTR 3?

There is a ‘Utilize Cash/ITC’ button available for making the payment on the summary page of the GSTR 3. On clicking this button, the following will be displayed:

a. Tax liability

b. Cash balance in electronic cash ledger (including TCS and TDS credits accepted in GSTR 2)

c. Provisional Input Tax Credit available as per the electronic credit ledger

d. Realised Input Tax Credit available as per the electronic credit ledger

Thereafter, the taxpayer will be facilitated to pay the return-related liability for the current tax period by utilizing (b), (c), and (d).

Note: In case, there are any pending liabilities from earlier tax periods, taxpayer will need to discharge the pending liabilities before discharging current liabilities.

7. Explain in detail the process of computation of interest?

The interest on admitted tax as per the return GSTR 3 shall be calculated from the first day after due date for payment of the tax. The interest on undue or excess claim of ITC for a month shall be calculated from the first day after due date for claiming the correct amount of ITC.

Illustration: Taxpayer filed GSTR 1 for April on 10th May mentioning a tax liability of INR 1000 and GSTR 2 was filed on 15th May where ITC availed was INR 750. The balance, INR 250, was paid on 25th May and GSTR 3 was also filed on the same day (5th day after the due date 20th May).

Question: Will interest will be levied on INR 250 or INR 1000?

Answer: The interest will be levied on INR 250.

Question: What is the total number of days for which interest will be calculated?

Answer: Interest will be computed from 21st May to 25th May in the above illustration (day on which liability is discharged is also included when calculating interest).

Interest calculation in the event of mismatch:

Mismatch report of invoices and debit notes will consist of following parts –

Part 1: Invoices and debit notes included in GSTR 2 of receiver but not in GSTR 1 of supplier

Part 2: Invoices and debit notes included both in GSTR 1 of supplier and GSTR 2 of receiver, however, supplier has not filed a valid GSTR 3 return.

Report will be generated on 21st of (M+1) or filing of GSTR 3 by receiver whichever is later, where M is the tax period.

Part 1

If the supplier rejects or doesn’t take any action till creation of GSTR 3 for (M+1) or due date of filing of GSTR 3 for (M+1), whichever is earlier, entry for ITC reversal in the electronic credit ledger of the receiver will be made on 21st of (M+2).

Part 2

If the supplier doesn’t file a valid return by 20th of (M+2), entry for ITC reversal in the electronic ledger of the receiver will be made on 21st of (M+2).

Such ITC reversal will be a part of GSTR 3 of (M+2) tax period and non-payment of same will make the return for (M+2) period invalid.

The interest liability on ITC reversal will arise after the due date of the GSTR 3 for month M which is the 21st of month M+1 and will end on the day valid GSTR 3 is filed for month M+2.

Illustration: Taxpayer filed GSTR 2 for April on 15th May where ITC availed was INR 750 and GSTR 3 was filed on 20th May.  Mismatch demand of INR 250 was created on 21st June. This was automatically reversed on the same day from the electronic credit ledger and the GSTR 3 for June was filed on 20th July, then interest will be computed from 21st May to 21st June (including both dates).

8. Can my CENVAT credit be carried forward and made available as ITC under the GST Act?

Yes, you can claim ITC provided the amount of CENVAT credit admissible under the earlier law is also admissible as ITC under the GST Act. If any proceeding either before or after coming under the GST Act results in recovery of the amount equivalent to CENVAT credit, then an arrear of tax under the GST Act will be recovered.

9. Can my VAT credit be carried forward and made available as ITC under the GST Act?

Yes, you can claim ITC provided the amount of VAT credit admissible under the earlier law is also admissible as ITC under the GST Act. If any proceeding either before or after coming under the GST Act results in recovery of the amount equivalent to VAT credit, then an arrear of tax under the GST Act will be recovered.

10. Can an un-availed CENVAT credit on capital goods not carried forward in a return from an earlier law be allowed as ITC under the GST Act?

Yes, you can claim ITC provided the amount of CENVAT credit admissible under the earlier law is also admissible as ITC under the GST Act. If any proceeding either before or after coming under the GST Act results in recovery of the amount equivalent to CENVAT credit, then an arrear of tax under the GST Act will be recovered.

11. Can an un-availed ITC on capital goods not carried forward in a return from an earlier law be allowed as ITC under the GST Act?

Yes, you can claim ITC provided the amount of ITC credit admissible under the earlier law is also admissible as ITC under the GST Act. If any proceeding either before or after coming under the GST Act results in recovery of the amount equivalent to ITC credit, then an arrear of tax under the GST Act will be recovered.

12. I was not liable to be registered under the earlier law OR I was engaged in the manufacture of exempted goods under the earlier law but now I am liable to be taxed in the GST Act. Am I entitled to take credit of ITC & eligible duties on the opening stock of inputs, semi-finished or finished goods as on the appointed day of the GST Act?

Yes, you can claim ITC & eligible duties subject to possession of invoice or other documents. However, if any proceeding either before or after the GST Act coming into effect results in recovery of the amount equivalent to ITC/eligible duties then an arrear of tax under the GST Act will be recovered from you.

13. I was a compounding dealer under the earlier law but switched over and became a regular taxpayer under the GST Act. Am I entitled to take credit of ITC & eligible duties on opening stock of inputs, semi-finished or finished goods as on the appointed day of the GST Act?

Yes, you can claim ITC & eligible duties subject to possession of invoice or other documents. However, if any proceeding either before or after the GST Act coming into effect results in recovery of the amount equivalent to ITC/eligible duties then an arrear of tax under the GST Act will be recovered from you.

14. I was a regular taxpayer under the earlier law but switched over and became a compounding dealer under the GST Act. Am I entitled to take credit of ITC on opening stock of inputs, semi-finished or finished goods as on the appointed day of the GST Act?

No, you have to pay the amount equivalent to the ITC claim on opening stock of inputs, semi-finished or finished goods as on the appointed day of the GST Act by way of debit in the electronic credit ledger or electronic cash ledger. After payment, the balance of ITC, if any, lying in your electronic credit ledger shall lapse.