Goods and Services Tax (GST) compliance is a crucial aspect of running a business in India. To ensure transparency and proper tax filing, businesses are required to submit periodic GST reports. Among the key GST reports are GSTR-1, GSTR-2, and GSTR-3B—each serving a specific purpose in tax compliance.
Understanding these reports is essential for business owners, accountants, and tax professionals to avoid penalties and ensure smooth operations. In this article, we will break down each report, its purpose, filing process, due dates, and other important details. Also explain GST question and answers.
What is GST Reporting?
GST reporting is the process of submitting periodic returns to the government that detail sales, purchases, input tax credit (ITC), and tax liabilities. Businesses must file GST returns regularly to ensure compliance with GST laws and to claim ITC on purchases.
The three most important GST reports are:
- GSTR-1 (Outward Supplies)
- GSTR-2 (Inward Supplies – Currently Suspended)
- GSTR-3B (Monthly Summary Return)
Let’s explore each of these in detail, Also all gst related questions and answers will be explained
1. GSTR-1: Statement of Outward Supplies
What is GSTR-1?
GSTR-1 is a monthly or quarterly return that businesses must file to report details of all outward supplies (sales) of goods and services. It captures invoice-level details for all taxable supplies made during a specific period. Also mandatory HSN wise reporting for GSTR1 is effective as Jan 2025
Who Needs to File GSTR-1?
- Registered taxpayers under GST (except composition scheme taxpayers, input service distributors, and certain others)
- Businesses with an annual turnover of more than ₹5 crore must file monthly
- Businesses with an annual turnover of up to ₹5 crore can opt for quarterly filing under the QRMP scheme
Due Dates for Filing GSTR-1
- Monthly filers: 11th of the following month
- Quarterly filers (QRMP scheme): 13th of the month following the quarter
Information Required in GSTR-1
- Details of B2B (Business-to-Business) sales
- Details of B2C (Business-to-Consumer) sales exceeding ₹2.5 lakh
- Exports and deemed exports
- Credit/debit notes issued
- Advances received and adjusted
Importance of Filing GSTR-1
- Ensures accurate tax reporting
- Helps buyers claim Input Tax Credit (ITC) in their GSTR-2A
- Avoids penalties and non-compliance issues
2. GSTR-2: Statement of Inward Supplies (Currently Suspended)
What is GSTR-2?
GSTR-2 was originally designed to capture inward supplies (purchases) made by a business. This report allowed taxpayers to claim Input Tax Credit (ITC) based on the details submitted by their suppliers in GSTR-1.
Why is GSTR-2 Suspended?
Since its introduction, GSTR-2 has remained suspended due to complexities in matching invoices between buyers and suppliers. Instead, the government introduced GSTR-2A and GSTR-2B, which are auto-generated purchase statements derived from the supplier’s GSTR-1 filing.
Alternative to GSTR-2: GSTR-2A & GSTR-2B
- GSTR-2A: A dynamic report that updates whenever a supplier files GSTR-1
- GSTR-2B: A static, ITC-eligible statement generated on the 14th of every month
What Should Businesses Do?
- Verify GSTR-2A/GSTR-2B with purchase records
- Reconcile discrepancies with suppliers
- Claim ITC in GSTR-3B based on GSTR-2B (recommended)
3. GSTR-3B: Monthly Summary Return
What is GSTR-3B?
GSTR-3B is a monthly summary return that businesses must file to declare their tax liability and claim ITC. It is a self-declaration form that helps businesses pay their tax dues for a given period.
Who Needs to File GSTR-3B?
- All regular taxpayers registered under GST (except composition scheme taxpayers)
- Mandatory for businesses with an annual turnover exceeding ₹5 crore
- Businesses with a turnover of up to ₹5 crore can file quarterly under the QRMP scheme
Due Dates for Filing GSTR-3B
- Monthly filers: 20th of the following month
- Quarterly filers: 22nd or 24th of the month following the quarter (QRMP scheme)
Information Required in GSTR-3B
- Details of outward supplies (sales)
- Input Tax Credit (ITC) claimed based on GSTR-2B
- Tax payable and tax paid
- Any adjustments and late fees (if applicable)
Importance of Filing GSTR-3B
- Ensures timely tax payment
- Helps businesses claim ITC and avoid excess tax liability
- Prevents penalties and interest for late filing
Comparison of GSTR-1, GSTR-2 & GSTR-3B
| Report | Purpose | Filing Frequency | Key Information |
|---|---|---|---|
| GSTR-1 | Report outward supplies (sales) | Monthly/Quarterly | Invoice-wise sales details |
| GSTR-2 (Suspended) | Report inward supplies (purchases) | Monthly | Details of purchases & ITC |
| GSTR-3B | Summary return & tax payment | Monthly/Quarterly | Total sales, ITC claims, tax due |
Consequences of Late Filing
Filing GST returns late can result in penalties and interest:
- Late Fee: ₹50 per day (₹25 CGST + ₹25 SGST), ₹20 per day for NIL returns
- Interest: 18% per annum on unpaid tax liability
- ITC Denial: Buyers may not be able to claim ITC if GSTR-1 is not filed on time
Conclusion
Understanding GST reports like GSTR-1, GSTR-2, and GSTR-3B is crucial for businesses to maintain compliance and avoid penalties. While GSTR-1 reports sales transactions and GSTR-3B summarizes tax liabilities, GSTR-2 has been replaced by automated reports like GSTR-2A and GSTR-2B.
To ensure smooth GST compliance:
- File GSTR-1 and GSTR-3B on time
- Reconcile GSTR-2A/2B with purchase records
- Maintain proper documentation for ITC claims
By following these best practices, businesses can stay compliant and optimize their tax benefits under the GST system.
