Understanding GSTR-1 Return

GSTR-1

What is form GSTR -1?

Form GSTR-1 is a comprehensive statement that details the outward supplies of goods and services by a supplier. Specifically, all regular and casual registered persons under GST, who are engaged in the outward supply of goods and services, must file GSTR-1 either monthly or quarterly.

Purpose of filing GSTR-1 Return

GSTR-1 is one of the important statements as it contains the record of all sale transactions conducted by a supplier during a specified period.

GSTR-1 is a comprehensive statement, which contains details such as:

1. Details of the recipient of goods/services.
2. Taxable Value of Goods/Services.
3. Place of Supply
4. Amount of GST collected from recipient etc.

The details entered in GSTR-1 automatically populate GSTR-2B, enabling recipients to claim their Input Tax Credit based on this information.

Hence, filing GSTR1 serves following main purposes:

1. It helps in calculation of accurate GST liability of the supplier
2. It helps in verification of Input Tax Credit to be claimed by the recipient.
3. It helps in tracking the movement of goods and services across the supply chain, ensuring transparency and compliance with GST regulations.

Read more:- GST Return Filing – What is GST Return Filing, Due Dates, Penalties and Types

Benefits of filing GSTR-1 timely

GST Act stipulates due dates for every GST return and taxpayers must file the returns within that time frame. Consequently, failure to file returns within the prescribed due dates may result in imposition of interest and penalties.

Furthermore, GST operates on the principle of tax credit linkage where recipient of services can only avail themselves of the tax credit if the supplier has complied with their tax obligations in a timely fashion.

This design, therefore, ensures a chain of compliance throughout the supply network, necessitating the prompt filing of the GSTR-1 form to facilitate this process.

Other advantages of filing GSTR-1 timely:

1. Avoidance of Late Fees: The GST Act imposes a late fee for delayed returns, which is ₹ 50 per day, capping at INR 5,000. This can be a needless expense that punctual filing easily avoids.
2. Enhanced trust between buyer and supplier: When suppliers file GSTR-1 in a timely fashion, it allows recipients to claim ITC on the invoices issued. Consequently, this timely action can boost the trust of buyers and reflects supplier’s reliability and commitment to compliance.
3. Prevention of Reconciliation Discrepancies: Consistent and prompt filing helps in preventing mismatches and reconciliation issues with the recipients of supplies. It ensures a smoother process when matching invoices and can substantially reduce disputes.
4. Other regulatory actions: Timely filing of GSTR1 is also essential to avoid other regulatory actions, including the restriction on the generation of e-way bills, the blockage of the GSTR-1 filing facility, and in severe cases, the suspension or cancellation of GST registration.

Who needs to file GSTR1 Return?

All regular and casual registered persons under GST engaged in the outward supply of goods and services must file GSTR1 either monthly or quarterly.

Moreover, every registered person must file form GSTR-1 even if there is no turnover during the period. In such cases, one may file a NIL return when there is no turnover during that period.

Who is required to obtain registration under GST?

Section 22 of the CGST Act specifies certain conditions where GST registration is mandatory. Accordingly, these persons are required to file GSTR1 whether or not they have a business activity or turnover during the period.

Condition where GST registration is mandatory–

(i) When the supply of goods for any business exceeds ₹ 40 lakhs in a financial year (₹ 20 lakhs for Special Category states).
(ii) When the supply of goods for any business exceeds ₹ 20 lakhs in a financial year. (₹ 10 lakhs for Special Category states).
(iii) If a person is registered under an earlier law (i.e., Excise, VAT, Service Tax etc.)
(iv) When a registered business has been transferred to someone/demerged, the transferee shall require registration from the date of transfer.

Section 24 of CGST Act specifies class of persons who are mandatorily required to obtain registration irrespective of the quantum of turnover.

(1) Persons making inter-State taxable supply.
(2) Casual taxable persons making taxable supply.
(3) Persons required to pay tax under reverse charge.
(4) Non-resident taxable persons making taxable supply.
(5) Electronic Commerce Operators who is required to collect tax at source under section 52,
(6) Persons who supply goods and/or services through such ECO and required to collect tax at source under section 52
(7) Persons required to deduct tax u/s 51, whether or not separately registered under this Act.
(8) Persons making taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.
(9) Input Service Distributor
(10) Every person supplying online information and database access or retrieval (OIDAR) services from a place outside India to a person in India
(11) Persons required to pay tax under section 9(5) and
(12)Person supplying online money gaming in India from a place outside India.
(13) Such other persons or class of persons as Government may notify on the recommendations of the Council.

Exceptions to filing GSTR-1 for certain type of businesses

Following persons although registered under GST are not required to file Form GSTR-1:

  • Taxpayers under the Composition Scheme
  • Non-resident foreign taxpayers
  • Online information database and access retrieval service provider
  • Input Service Distributors (ISD)
  • Tax Deducted at Source (TDS) (deductors)
  • E-commerce operators collecting TCS

When to file GSTR-1 Return?

Monthly Vs. Quarterly Return

Taxpayers can file GSTR1 through two primary approaches: one involves monthly filings and payments, while the other incorporates a quarterly filing with monthly payment also called as QRMP scheme.

QRMP (Quarterly Returns with Monthly Payment) scheme, is available to businesses with an annual turnover of ₹ 5 crores or less from the previous financial year. This option is particularly advantageous for smaller businesses as it reduces the cost and administrative burden of filing GST returns. Under the QRMP scheme, eligible businesses must file GST returns four times each financial year, corresponding to each quarter.

Due Dates for Filing GSTR-1

Due Date for Filing Monthly GSTR-1 11th day of the month following the reporting month
Due Date for Filing Quarterly GSTR-1 13th day of the month following each quarter

Late Filing Penalties

Late Fees for GSTR1 Filing
  CGST/per day of delay CGST/per day of delay IGST/per day of delay Total/per day of delay
Intra-State Supplies Rs.25 Rs.25 Rs.50
Inter-State Supplies Rs.50 Rs.50
NIL Returns Rs.10 Rs.10 Rs.20

Capping of Late Fee in case of Monthly Returns

Criteria based on annual turnover in previous FY Maximum Late Fee
NIL returns in GSTR1 Rs. 500
Annual turnover upto Rs. 1.5 crore Rs. 2000
Annual turnover between Rs. 1.5 crore to Rs. 5 crore Rs. 5000
Annual turnover beyond Rs. 5 crore Rs. 10000

How to file GSTR-1 Return?

Pre-requisites for filing GSTR1

Filing Form GSTR-1 requires meeting certain conditions that ensure the process is smooth and in compliance with GST regulations.

Here is a checklist for those preparing to file Form GSTR-1:

(i) The taxpayer should be a registered taxpayer and should have a GSTIN valid for the tax period which Form GSTR-1 is to be filed.
(ii) To access the GST Portal, the taxpayer should have valid login credentials (i.e., User ID and password).
(iii) Where digital signature is compulsory, taxpayer must ensure that the digital signature certificate (DSC) is active/non-expired.
(iv) In case taxpayer wants to use EVC, they must ensure that the registered mobile number of the Primary Authorized Signatory is active and available.

Steps for filing GSTR-1 on GST Portal

Filing the GSTR1 tax return is a systematic process where there are several methods to file depending on the varied needs of taxpayers.

1. Online Entry via GST Portal: Direct data entry on the GST website is suitable for taxpayers with a manageable number of invoices.
2. Offline Portal Upload: Uploading through offline Utility too is suitable for businesses dealing with a large volume of invoices.
3. Third-Party Applications: Taxpayers may also choose to file through authorized GST Suvidha Providers (GSPs), which can be beneficial for integrating existing accounting systems.

Below is a comprehensive, step-by-step guide to filing GSTR-1 online:

1. Access the GST portal using URL www.gst.gov.in. Log in with your user credentials.
2. Once logged in, select ‘Services’, followed by ‘Returns’ and then ‘Returns Dashboard’. To opt in for Quarterly return, select ‘Opt in for Quarterly Return’ in the Services Tab.
3. Specify the financial year and the respective quarter or month for which you intend to file the GSTR-1.
4. Click on ‘Prepare Online’ on the GSTR-1 tile and begin entering your transaction details.
5. Enter the following details:

(a) B2B Supplies: Record details of taxable outward supplies made to registered businesses within               the state.
(b) B2C Supplies: Include transactions with unregistered individuals or consumers within the state
(c) Credit/Debit Notes: Mention any credit or debit notes issued or received for adjustments from                prior tax periods.
(d) Amendments: Use this option to correct any mistakes made in previous GSTR-1 filings.
(e) B2C Others: Detail the supplies made to unregistered consumers that are located outside the                   state.
(f) HSN Summary: Review this auto-populated section for accuracy based on the HSN codes from               the invoices.

If you are filing a NIL return, simply click on the checkbox ‘File NIL GSTR1’ and you need not fill above details.

6. After entering all details, click ‘Generate GSTR-1 Summary‘ for a consistency check and use the ‘Preview’ option to inspect the final return before submission.
7. Opt to file using either the Digital Signature Certificate (DSC) or the Electronic Verification Code (EVC).
8. Following a successful submission, an Acknowledgement Receipt Number (ARN) will be issued to confirm the filing.

Information required for GSTR-1 Filing

Following information must be readily available with the taxpayer for seamless filing of GSTR1:

1. Customer’s GSTIN (in case of B2B/Export invoices)
2. Type of Invoice
3. Place of Supply
4. Invoice Number
5. Invoice Date
6. Taxable Value
7. GST Rate
8. Amount of IGST applicable
9. Amount of CGST applicable
10. Amount of SGST applicable
11. Amount of GST cess applicable
12. GST rate applicable
13. Shipping Bill Number (for export invoices)
14. Shipping Bill Date (for export invoices)
15. Port Code (for export invoices)

Common mistakes to avoid while filing GSTR-1

Mistakes in filing GST returns can lead to severe consequences, including restrictions on utilizing input tax credits, limitations on submitting other related GST filings, and even potential cancellation of GST registration.

Consequently, it’s important to be aware of the typical errors to avoid when submitting GSTR1 to ensure compliance and prevent these issues.

1. Inaccurate HSN/SAC Codes: Ensure to provide accurate HSN or SAC codes for all goods and services to avoid classification errors. This helps in proper tax calculation and compliance.
2. Incorrect Invoice Details: When furnishing invoice details in GSTR-1, ensure to upload invoice-wise details accurately. This includes date of invoice, invoice number, place of supply, GST rates, etc. Because manual entry of this detailed data increases the risk of errors, so meticulous attention is required.
3. Late Filing: Always file returns on time to avoid late fees and penalties. Timely submission is also essential to enable the pass-through of input tax credits (ITC) to recipients.
4. Non-filing of NIL Returns: GSTR-1 must be filed even if there are no transactions during the period; failing to do so can lead to unnecessary late fees. Importantly, even if the return is NIL, it’s mandatory to file.
5. Incorrect Reporting Under Heads: Be cautious to provide details of outward supplies under the correct heads. Common mistakes include incorrectly categorizing transactions under zero-rated supplies and deemed exports.
6. Mismatch in Invoice Entries: It’s critical to enter invoice details that match those in your accounting system. Such discrepancies can lead to issues with tax credit claims and reconciliations.

Latest Amendments in GSTR-1

Introduction of 14A and 15A tables

From February, 2024 two new Table 14A and Table 15A have now been made available in GSTR1

These revised tables are relevant for taxpayers who have previously reported supplies in Table 14 or Table 15 in past tax periods.

Table 14A – Amended Supplies made through e-commerce operator (ECO)

Here the supplier can amend the details of original supplies already reported by him in original table 14 under below two sections:

1. 14(a) Liable to collect tax u/s 52(TCS)
2. 14(b) Liable to pay tax u/s 9(5)

Table 15A – Amended Supplies u/s 9(5)

Here the e-commerce operator can amend the detail of original supplies already reported by him originally in table 15 under following four sections:

1. Registered Supplier and Registered Recipient (B2B)
2. Registered Supplier and Unregistered Recipient (B2C)
3. Unregistered Supplier and Registered Recipient (URP2B)
4. Unregistered Supplier and Unregistered Recipient (URP2C)

To view the table 14A/15A, taxpayer can navigate to Returns Dashboard > Selection of Period > Details of outward supplies of goods or services GSTR-1 > Prepare Online

GSTR-1 FAQ section

Q1. Is filing the GSTR-1 form compulsory?

Yes, filing the GSTR-1 form is required, even if no business transactions occurred during the tax period (Nil Return).

Q2. Which types of taxpayers are required to use a Digital Signature Certificate (DSC) for filing returns?

All Public and Private Limited Companies, Limited Liability Partnerships (LLPs), and Foreign Limited Liability Partnerships (FLLPs) must use a DSC for filing returns.

Q3. What happens if a taxpayer fails to file GSTR-1 by the deadline?

Taxpayers will receive a system-generated notice (format 3A) for non-compliance if they do not file Form GSTR-1 by the due date.

Q4. I’ve chosen to file the GSTR-1 quarterly. Can I switch to a different frequency now?

You may change your filing frequency only if you have not filed any returns during the financial year under the initially chosen frequency.

Q5. Do taxpayers under the composition scheme need to file GSTR-1?

Taxpayers under the composition scheme are exempt from filing GSTR-1 and must instead use Form CMP-08 for quarterly tax payments.

Q6. What are the consequences of not filing GST returns?

Failure to file GST returns results in a late fee for each day of delay. Additionally, if taxes are due, interest will accrue at an annual rate of 18% on the unpaid tax amount.

Q7. What constitutes B2B supplies?

B2B supplies are transactions between registered taxable entities or persons.

Q8. What are B2C supplies?

B2C supplies are transactions between a registered supplier and an unregistered buyer.

Q9. When should you report Debit Notes in the return?

Debit Notes should be reported in the GSTR-1 for the month they are issued.

Q10. When should Credit Notes be reported in the return?

Credit Notes must be reported in the GSTR-1 for the month they are issued, but no later than the return for the September following the financial year of the transaction or the date the relevant annual return is filed, whichever is earlier.

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