GST Returns - 3 & 3B Story !!

Touted as Good and Simple Tax (GST) by our Hon'ble Prime Minster, we believed it so. But when we started finding HSN codes, setting up billing system, identifying place of supply, determining the dilemma of applying IGST or CGST & SGST, we came to know about the ground realities. Nevertheless, we transcended the journey of supplying and procuring goods and services in GST regime in July. Now this Month of August is about payment of First GST liability coupled with Returns. When, we were served with 3 return namely, GSTR-1,2&3 when 3B was launched in middle, GSTR-3B took a wild card entry for July and August 2017. We thought a wild card entrant will substitute the other strong Opponent GSTR-3.  But time and again, we were proved wrong, when Due dates for GSTR-1,2,3& 3B were announced.

Now a layman or for this matter even professionals are trying to find answers to 3 & 3B story. What is all about ? Would I file 4 returns for July & August. Through this write-up we would attempt to address the confusion. Let's delve into returns one by one.

GSTR-1:

In GSTR-1, you will report your outward supply (i.e. sale/service etc.) including exports, SEZ supplies etc. Details would be filled in either Invoice-wise or summary. Even details of Advance received, Debit Notes, Credit Notes, HSN wise-summary will also be submitted. The criteria for Invoice-wise or summary details is as under:

GSTR-2

GSTR-1 and 2 are twins and would always go together. GSTR-2 is Return for submitting details of Inward Supply(i.e. Purchase/ services received etc.) including import of goods/services. Most of the details in this Return would be auto-generated from GSTR-1 filed by your Supplier and received by you in GSTR-2A on GST Portal. You will verify details received in GSTR-2A and either accept it or modify it to file your GSTR-2. The idea of matching of input tax credit will be executed by GSTR-2 only.

GSTR-3

This is a summary return of outward supply, inward supply, tax liability, tax paid etc. Details in this return would be auto-generated from GSTR-1 & 2. You will pay taxes with filing of this return either by cash or utilization of Input tax credit or both.

Having discussed 3 basic returns, let's now understand the role of GSTR-3B.

What is GSTR-3B. Is it a substitute of GSTR-3 ?

Firstly, GSTR-3B is not a substitute of any other return. The law mandates filing of GSTR-3B where due date of filing of GSTR-1 & 2 has been extended. Since, due dates have been extended, consequently, GSTR-3B is required to be filed as a provisional return for initial 2 months July and August. It means, GSTR-3 will still be filed for July and August. Yes. You heard it right, you would be filing 4 returns for July and August.

The sequence of returns filing for July and August, 2017 is as under:

Hence, the Government has actually imposed 4 returns, instead of providing an option that where GSTR-1 & 2 have been filed on time, you need not file GSTR-3B. But it doesn't seem so since GSTR-3B is mandatorily required to be filed by virtue of Notification No. 21/2017-CGST, Rate dated 8th August, 2017.

Happy Return Filing and Happy Independence Day !!

About Author:

The author is a practicing Chartered Accountant in Delhi/NCR specialising in GST, Start-up Advisory, Corporate Finance. He is also a GST  Trainer and Faculty Member of ICAI. He has conducted various sessions on GST on different topics and also can be reached at nmjhanwar@gmail.com.