GSTR-1 Demystified

GST brings the concept of uploading business transaction data versus the existing system of filing summary information. GSTR-1 refers to filing of outward supply details by a regular dealer registered in GST on or before 10^th of subsequent month. 

These details get auto-populated to counterparty (buyer) as GSTR-2A on 11^th. Adherence to dates is of prime relevance since apart from late fees (Rs 100 per day up to a maximum of Rs 5,000), missing deadlines leads to changes in return filing flow. Concept of return revision has been done away with and changes if any have to be done at invoice level. 

Return may be filed by user in following methods:

1.   Enter invoice data directly in GST portal – requires high speed and reliable internet connectivity and suitable for small business. Ex: 50 to 100 invoices per month
2.   Enter data in Excel template provided by GST >> import into offline utility >> convert to uploadable file (.json) >> Login to GST portal, browse and upload – multi-step process, suitable for business maintaining data in Excel or using billing or Point of Sale solutions (not integrated with GST) which can provide excel output/summary
3.  Use Accounting/ERP software and upload data directly to GST – connected solution: convenient and preferred method for most business, as the ERP would handle most of the backend activities (upload/download/session) with minimal physical presence of owner required.

Principal categories of information to be furnished as part of GSTR-1 are:

·      Sales (Local/Interstate, Taxable/Exempt/Nil Rate, B2B and B2C)

·      Exports

·      Debit and Credit notes

·      Advances

·      Revisions for earlier tax period

·      Other Info (Turnover, HSN Summary, Invoice series etc.)

Below is the table-wise details of information to be furnished:

1.     GSTIN – The 15 digit GST Registration number of the business entity Ex: 27ARETY3456J1Z1

  2(a). Legal name of the business Ex: One97 Communications

  (b). Trade name of the business Ex: Paytm

 3(a). Turnover of previous financial year (2016-17)

(b). Turnover of April-May-June 2017

Aggregate turnover here refers to combined turnover across India for the PAN, and includes exempt supplies and exports. This does not include inward supplies on which tax is paid on reverse charge basis.

4. Taxable outward supplies to registered business

Taxable supplies are to be reported in Table 4 (A to C) and thereby this table does not include details of supplies of Nil Rated / Exempt or non-GST goods even if supplied to B2B customer. However if an invoice has at least one taxable item/service it will be reported here although other items may be Nil/exempt. Supplies done to SEZ or SEZ developer and sales of deemed export nature although of taxable and B2B nature will not participate in Table 4. Across all tables when invoice information is reported, rate-wise breakup is to be provided. If there are multiple items (Ex: 15) in a single invoice but falling in 3 rates, the invoice information will be furnished in 3 lines.

            4A. Outward supplies to registered business

Explanation: Taxable sales done to business (B2B) customers having GSTIN and such service is not classified as reverse charge. Does not include B2B sales done through e-commerce operators.

            4B.Outward supplies attracting reverse charge

Explanation: Sales done to business (B2B) customers having GSTIN of those services classified as reverse charge. Ex: Goods Transport     Agency services, Legal services, Rent-a-cab services etc.

            4C. Outward supplies made through e-commerce operators

Explanation: Sales done to business (B2B) customers having GSTIN but done through e-commerce operators like Amazon, Flipkart, e-Bay, Indiamart etc. Sales have to be provided segregated e-commerce operator wise.

 5. Taxable Inter-state B2C supplies more than Rs.2.5 lakhs

Only taxable supplies will be reported in this table. (All sales of Nil Rated / Exempt / Non-GST goods or service to interstate consumers will not participate here).

            

           5A. Inter-state B2C supplies more than Rs.2.5 lakhs

Explanation: Interstate sales done to consumers (B2C) and the invoice value is more than Rs 2.5 Lakhs (does not include sales done    through e-commerce operator).

          

          5B. Inter-state B2C supplies more than Rs.2.5 lakhs through e-commerce                          operators

Explanation: Interstate sales done to consumers (B2C) and the invoice value is more than Rs 2.5 Lakhs and the sale has happened through e-commerce operators (to be reported e-commerce operator-wise)

    6. Zero rated supplies and Deemed Exports

           

            6A. Exports

Exports with or without payment (under Bond or letter of undertaking) of tax will be reported in this section. The Shipping Bill number (13 digit code including six digits of port code) is not mandatory during saving of invoice and can be subsequently updated through amendment table. Shipping bill number is to be mandatorily updated before claiming refund.

           

            6B. Supply to SEZ

Similar to Exports, supplies to SEZ is zero rated and can be with or without payment of tax, to be reported here. Shipping bill details will be applicable when supplied under Bill of Entry.

           

           6C. Deemed exports

Deemed exports as notified by government to be reported here.

        7. Net B2C outward supplies other than that covered in table 5

All taxable B2C supplies other than table 5 (interstate B2C > 2.5 lakhs) to be reported here. Only taxable and B2C supplies of Nil/Exempt/Non-GST will not participate.

 7A. Intra-state B2C supplies

7A (1). Consolidated rate-wise B2C supplies

All within-state B2C supplies (irrespective of invoice value) to be consolidated (net of debit/credit note) and reported here including supplies done through e-commerce operators.

7A (2). Consolidated rate-wise B2C supplies done through e-commerce operator

Only those intra-state B2C sales done through e-commerce operator to be sorted e-commerce operator wise and reported as consolidated values (net of debit/credit note).

7B. Inter-state B2C supplies of value up to Rs 2.5 Lakhs

7B (1). State-wise details of consolidated rate-wise B2C supplies

All interstate B2C supplies of invoice value =< 2.5 lakhs to be consolidated (net of debit/credit note) and reported here including supplies done through e-commerce operators.

7B (2). State-wise details of consolidated rate-wise B2C supplies done through e-commerce operator

Only those interstate B2C sales of invoice value =< 2.5 lakhs and done through e-commerce operator to be sorted e-commerce operator wise and reported as consolidated values (net of debit/credit note).

8. Nil Rated / Exempt / Non-GST supplies

Explanation: This table captures net sales (after debit / credit note adjustments) of Nil Rated, Exempt and non-GST outward supplies and the information is to be further bifurcated as B2B/B2C and as inter/intra state. All ‘Bill of Supply’ having only Nil / Exempt / Non-GST supplies are to be reported in this section.

8A. Interstate B2B supplies of Nil/Exempt/Non-GST goods/service

8B. Intrastate B2B supplies of Nil/Exempt/Non-GST goods/service

8C. Interstate B2C supplies of Nil/Exempt/Non-GST goods/service

8D. Intrastate B2C supplies of Nil/Exempt/Non-GST goods/service

9. Amendments, Debit and Credit Notes

Explanation: As stated earlier, in GST regime there is no provision for return revision and invoices of earlier tax period entered erroneously (Ex: clerical error) can be corrected through amendment table by re-uploading the rectified information. Amendment to invoice data is subject to following conditions:

·       The invoice / Debit / Credit Note is not already accepted by buyer

·       The invoice / Debit / Credit Note is not already amended / modified earlier

·       The last period in which any amendment can be performed is the September return of next financial year or filing of annual return whichever is earlier

9A. Invoice amendment

Provision to enter corrected information pertaining to invoices uploaded & filed in earlier tax periods. This table can also be used for updating shipping bill details against an export invoice uploaded in earlier tax period.

9B. Debit/Credit notes and Refund voucher

Debit and Credit notes issued against invoices of current or earlier tax periods (not earlier than April month of the FY to which it belongs) are added in this section. Refund vouchers are also to be reported here.

(Refund voucher: when advance is received (receipt voucher) form buyer and subsequently the supply does not happen, supplier to issue a refund voucher)

9C. Amendment to Debit or Credit note and refund voucher

Corrections to Debit / Credit notes and Refund vouchers issued in earlier tax period principally to rectify clerical errors.

10. Amendments to B2C supplies reported in Table 7

This section refers to corrections to be incorporated to consolidated B2C sales reported in earlier tax periods. The information needs to be bifurcated state-wise (Place of supply) and between e-commerce and non-ecommerce sections.

10A. Revision of Intrastate B2C supplies of earlier tax periods (including e-commerce)

10A (1). Revision of Intrastate B2C supplies of earlier tax periods made through e-commerce operators

10B. Revision of Interstate B2C supplies of earlier tax periods (including e-commerce)

10B (1). Revision of Interstate B2C supplies of earlier tax periods made through e-commerce operators

11. Advances received, adjusted and amended

Another unique provision of GST, borrowed from existing service tax laws is the requirement to report advances received from buyer for future supplies and pay tax liability on them. Subsequently when the invoicing happens, the tax liability paid earlier can be used to set-off the liability resulting from invoice.

            I) Information for current tax period

11A. Advance received in current tax period but not invoiced

Consolidated value of advances received in current month against which no invoice has been raised (or partially raised) is to be reported in this section with state-wise and rate-wise breakup.

11A (1). Intrastate supplies

11A (2). Interstate supplies

11B. Advances of earlier tax period adjusted in current tax period

This table refers to reporting of adjustment of liability in invoices raised in current period against liability discharged on advance in earlier tax period.

11B (1). Intrastate supplies

11B (2). Interstate supplies

II) Amendment to information furnished in tables 11A and 11B in earlier tax periods

Amendments if any to information furnished in earlier tax period in Table 11A and 11B to be provided here.

12. HSN Summary

The Table is a provision to report HSN (Harmonized system of nomenclature) / SC (service code) wise outward supplies summarized for the return period. For stock items, the quantity details along with applicable unit of measure also needs to be reported. For business with turnover < 1.5 crore, HSN is optional and instead description of goods may be provided. 

13. Document series

This section is for reporting the different voucher series being maintained by business for each document nature (Ex: B2B invoice, retain invoice, Debit/Credit notes, Receipt/Refund/Payment vouchers etc.). The number of vouchers issued/cancelled in the current return period is to be reported.

 

 Conclusion:

GSTR-1 invoices can be uploaded from the beginning of the month till 10^th of subsequent month. The return has to be digitally signed and submitted on or before 10^th of subsequent month. Dongle based digital signature or Aadhaar based e-sign or EVC (electronic verification code) based signing is permitted. Taxpayer may also assign a Tax Return Preparer on GST portal and authorize him to conduct all tax compliance activities. On 11^th the supplies get auto-drafted to buyer and he has option to accept / reject / modify the supplies and also add any missing invoice in his GSTR-2.  Buyer’s decisions are communicated back to supplier in GSTR-1A, filing of which is optional. Final summary of outward (GSTR-1) and inward (GSTR-2) and the resultant tax payable is generated by GST system as GSTR-3. Taxpayer has to discharge his liability and file GSTR-3 latest by 20^th.

As is evident, delay in filing of outward details beyond 10^th will result in supplies not getting auto drafted to buyers and thereby impacting credit flow.  Taxpayers need to therefore adopt an effective ERP solution that assists in addressing these nuances.

(Views expressed are purely personal and do not represent any organization. This article is based on publicly available information and strictly for education purpose only)