GSTR -1 Some Basics

Background

The Joint Committee on Business Process for GST on GST return has given its report stating various returns to be filed by the different taxpayers alongwith the periodicity of filing of returns. GSTR –1 prescribes the details to be furnished by the taxpayer in relation to outward supplies effected by it for the relevant period. In this article the author has tried to summarize the components, periodicity and instructions for filing of the return based on the committee report.

Who needs to file this return

This return needs to be filed by every taxpayer. However, compounding taxpayers and ISD are not required to furnish this return as separate returns have been specified for such categories of registered taxpayers.

Periodicity

As per the committee report GSTR-1 is the monthly return need to be filed by the 10^th of the subsequent month. It is required to be filed by every taxpayer. Late filing would be permitted on payment of late fees only.

Components of the return

This return form would contain the following information:

1. Basic details of the Taxpayer i.e. name along with GSTIN

2. Period to which the Return pertains i.e. month and year.

3. Gross Turnover of the Taxpayer in the previous Financial Year. This information would be submitted by the taxpayers only in the first year and will be auto-populated in subsequent years.

4. Final invoice-level supply information pertaining to the tax period separately for goods and services:

(i) For all B2B supplies (whether inter-state or intra-state), invoice level specified details will be uploaded.

(ii) For all inter-state B2C supplies (including to non-registered Government entities, Consumer / person dealing in exempted / NIL rated / non GST goods or services), the suppliers will upload invoice details as stated under :-

1. invoices value of which is less than ₹ 50,000/- and where address is not on record will be classified as intra-state supply,

2. invoices value of which is less than ₹ 50,000/- and where address is on record will be uploaded under State-wise summary,

3. invoices value of which is in between ₹ 50,000/- to ₹ 2,50,000/- will be uploaded under State-wise summary,

4. invoices value of which is more than ₹ 2,50,000/- will be uploaded invoice –wise.

(iii) The recommendation of the Committee on IGST and GST on Imports with respect to the details about HSN code for goods and Accounting code for services to be captured in an invoice are as follows:-

(a) HSN code (4-digit) for Goods and Accounting Codes for Services will be mandatory initially for all taxpayers with turnover in the preceding financial year above ₹ 5 Crore (For the first year of operations of GST, self-declaration of turnover of previous financial year will be taken as the basis as all India turnover data will not be available in the first year. From the 2nd year onwards, turnover of previous financial year under GST will be used for satisfying this condition).

(b) For taxpayers with turnover between ₹ 1.5 Crores and ₹ 5 Crores in the preceding financial year, HSN codes may be specified only at 2-digit chapter level as an optional exercise to start with. From second year of GST operations, mentioning 2-digit chapter level HSN Code will be mandatory for all taxpayers with turnover in previous financial year between ₹ 1.5 Crores and ₹ 5.0 Crores.

(c) Any taxpayer, irrespective of his turnover, may use HSN code at 6- digit or 8-digit level if he so desires.

(d) To start with, compounding dealers may not be required to specify HSN at 2-digit level also.

(e) Prescribed Accounting code will be mandatory for those services for which Place of Supply Rules are dependent on nature of services to apply the destination principle, irrespective of turnover.

(f) HSN Codes at 8-digit level and Accounting Codes for services will be mandatory in case of exports and imports.

(iv) The above parameters with respect to HSN code for goods and Accounting Code for services will apply for submitting the information in return relating to relevant invoice level information for B2B supplies (both intra-state and inter-state) and inter-state B2C supplies (where taxable value per invoice is more than ₹ 2.5 lakhs). It is proposed that in the return form the description of goods and services may not be required to be submitted by the taxpayer as the same will be identified through the submission of HSN code for goods and Accounting Code for services. In order to differentiate between the HSN code and the Service Accounting Code (SAC), the latter will be prefixed with “S”. The taxpayers who have turnover below the limit of ₹ 1.5 Crore will have to mention the description of goods/service, as the case may be, wherever applicable.

(v) For all Intra-State B2C supplies (including to non-registered Government entities, consumer / person dealing in exempted / NIL rated / non-GST goods or services), consolidated sales (supply) details will be uploaded. However a dealer may at his option furnish invoice wise information in respect of exempted and nil rated supplies also.

(vi) The supply information will also have details relating to the Place of Supply in order to identify the destination state as per the Place of Supply Rules where it is different from the location of the recipient.

(vii) Details relating to supplies attracting Reverse charge will also be submitted

5. The details of revisions in relation to the outward supply invoices pertaining to previous tax periods need to be furnished separately. This will include the details of Credit/Debit Note issued by the suppliers and the differential value impact and the concomitant tax payable or refund/tax credit sought.

6. There will be a separate table for effecting modifications/correcting errors in the returns submitted earlier. The time period for correcting these errors will be provided in the GST Law.

7. NIL rated, Exempted and Non-GST outward supplies to (both inter-state and intra-state) to registered taxpayers and consumers will be mentioned separately.

8. Details relating to advance received against a supply to be made in future will be submitted in accordance with the Point of Taxation Rules as framed in the GST law.

9. Details relating to taxes already paid on advance receipts for which invoices are issued in the current tax period will be submitted.

10. Details relating to supplies exported (including deemed exports) both on payment of IGST as well as without payment of IGST would be submitted.

11. Meaning of various terms used are :-

1. GSTIN – Goods and Service Taxpayer Identification Number
2. UID – Unique Identification Number for embassies
3. HSN – Harmonized System of Nomenclature for goods
4. SAC- Service Accounting Code
5. GDI – Government department unique ID where department does not have GSTIN
6. POS – Place of supply of goods or services – State code to be mentioned

Conclusion

GSTR-1 is the comprehensive return having schema where detailed information is required to be furnished. Proper invoicing and documentation would be key feature to furnish the correct information in such return. By the time the schema and the law is finalised we can see further improvements in GSTR-1.

This is just for your reference. It does not constitute our professional advice or recommendation.