GSTR-1 Explained: A Complete Guide for GST-Registered Taxpayers

One of the key components of GST compliance for taxpayers is the GSTR-1 return. The GSTR-1 return is essential for reporting the outward supplies (sales) of goods and services made by registered taxpayers. This blog aims to provide a comprehensive overview of the GSTR-1 return, including its purpose, structure, filing process, deadlines and implications for taxpayers.

Purpose of GSTR-1

GSTR-1 plays a crucial role in the GST framework. Its primary purposes include:

• Reporting Outward Supplies: GSTR-1 captures all the sales transactions made by a registered taxpayer. This includes both goods and services sold during the tax period.
• Input Tax Credit (ITC) Mechanism: The details submitted in GSTR-1 help recipients of supplies claim Input Tax Credit (ITC) on their purchases while filing their own GSTR-3B returns.
• Tax Compliance: Filing GSTR-1 ensures compliance with GST laws. It allows the government to track the flow of goods and services and monitor tax collections.
• Data Reconciliation: The data in GSTR-1 aids in reconciling sales records between suppliers and buyers, facilitating a transparent tax system.

Salient Features of GSTR-1

• GSTR-1 can be filed monthly or quarterly (QRMP scheme) depending on turnover in previous year.
• QRMP is the acronym for Quarterly Return Monthly Payment Scheme in which both GSTR-1 & GSTR-3B are filed quarterly but payment has to be made monthly.
• It is mandatory to file Nil GSTR-1 also.
• Nil GSTR-1 can be filed merely by sending SMS.
• QRMP filers can update their invoices on a daily or monthly basis using the IFF or Invoice Furnishing Facility. But this is optional.
• If after filing GSTR-1 but before filing GSTR-3B, any error is discovered in GSTR-1, it can be rectified using GSTR-1A.
• Errors can also be rectified in subsequent month GSTR-1 till 30 Nov. of the next year.
• GSTR-1 can be filed sequentially. If GSTR-1 of April month is pending, you cannot file it for May month.
• GSTR-1 can also not be filed if prior GSTR-3B is pending. So May month GSTR-1 can only be filed if GSTR-1 & GSTR-3B of April have been filed.
• GSTR-1 cannot be filed 3 years after due date.
• Filing of GSTR-1 results in auto-population of the supplies in GSTR-2A/2B of the buyers.

Who Needs to File GSTR-1?

GSTR-1 must be filed by:

• Regular Taxpayers: Normal taxpayers registered under GST.
• Casual Taxable Persons: Individuals or entities who occasionally supply goods or services in a taxable territory.

Exemptions to filing GSTR-1 include:

• Composition Scheme Taxpayer: Taxpayer opting for the composition scheme is not required to file GSTR-1 but instead files GSTR-4.
• Input Service Distributor: Files GSTR-6.
• Non-resident Taxable person : Files GSTR-5/5A
• Tax Deductor : Files GSTR-7
• Tax Collector : Files GSTR-8

GSTR-1 Structure

The GSTR-1 form consists of various sections to capture different types of outward supplies. Key sections include:

• Table 1 to 3: Basic Information: GSTIN, taxpayer name, filing period, etc.

• Table 4 to 8: Details of outward supplies and inter-state / intra-state supplies. Includes breakup of
  • Sales to registered taxpayers
  • Sales to unregistered taxpayers
  • Zero-rated supplies
  • Exempt supplies
  • Non-GST supplies etc.

• Table 9 to 10: Details of amendment (if any) for the previous period.
• Table 11 : Consolidated Statement of Advance Received/Adjusted
• Table 12: HSN-wise summary of products sold.
• Table 13: Information regarding refunds claimed.

Frequency of Filing

Note: This facility is optional. If an eligible person wants to file a monthly return instead of a quarterly one, he can do so.

Filing Process

Filing GSTR-1 involves several steps:

1. Log in to the GST Portal: Taxpayers must log in using their GSTIN and password.
2. Navigate to Returns Dashboard: From the dashboard, select “GSTR-1” from the list of returns.
3. Fill in the Details: Complete the required sections with accurate sale information, including HSN codes where applicable.
4. Validation: The portal automatically validates the entries for discrepancies and errors. Make necessary corrections if errors are indicated.
5. Preview and Submit: Review the entire form for accuracy. After confirming that all details are correct, submit the GSTR-1 for processing.
6. Acknowledgment: Upon successful submission, the system generates an acknowledgment receipt, which should be saved for future reference.
7. GSTN Offline Utility: Alternatively, offline utility can be used to file GSTR-1.
8. Web-GST: For a seamless filing process use Web-GST Retail or Corporate edition. 

Deadlines for Filing GSTR-1

The deadlines for filing GSTR-1 can vary:

• Monthly Filers: 11th of the next month.
• Quarterly Filers: 13th of the month following the quarter end.

Consequences of Non-Compliance

Failing to file GSTR-1 can lead to several repercussions:

• Late Fees: The government imposes a late fee for delayed submissions.

Late fee per day

• Interest on Tax Liabilities: If the taxes are not paid, interest is applicable on the outstanding amount.
• Inability to Claim ITC: Buyers may face issues claiming ITC if their suppliers fail to report sales accurately.
• Increased Scrutiny: Frequent non-compliance could lead to audit or scrutiny from GST authorities.

Common Challenges and Solutions

While filing GSTR-1, taxpayers may face common challenges:

• Data Accuracy: Ensuring all sales transactions are reported accurately is crucial. Using Web-GST software can help maintain accuracy in filing.
• ITC Claim Reconciling: Discrepancies between GSTR-1 and GSTR-3B often arise. Regularly reconciling sales in the two is crucial.
• Technical Issues with the GST Portal: Sometimes, technical glitches on the GST portal may hinder the filing process. Taxpayers should keep trying and file grievances if technical issues persist.

Conclusion

The GSTR-1 return is a fundamental component of the GST system, aiding in tax compliance and the input tax credit mechanism. Proper understanding and timely filing of this return is essential for registered taxpayers. By adhering to the guidelines provided in this chapter, taxpayers can ensure they meet their obligations efficiently and avoid potential penalties.