Understanding GSTR 1: A Guide for Businesses in India

Understanding GSTR 1: A Guide for Businesses in India

What is GST?

The Goods and Services Tax (GST) is a indirect tax system implemented in India. It replaced many state and central level taxes, simplifying the taxation process for businesses. Businesses registered under GST must file periodic returns to declare their sales and purchases.

What is GSTR-1?

GSTR-1 is a crucial monthly or quarterly GST return form that most registered taxpayers must file. It details a business's outward supplies, which are essentially their sales.

Who Needs to File GSTR-1?

Most businesses registered for GST must submit GSTR-1, even if they did not make any sales in a specific month.

Here are some exceptions:

•       Taxpayers liable to collect Tax Deducted at Source (TDS)
•       Taxpayers liable to collect Tax Collected at Source (TCS)
•       Suppliers of Online Information Database Access and Retrieval (OIDAR) services
•       Non-resident taxable persons
•       Businesses registered under the GST Composition Scheme
•       Input Service Distributors (ISDs)

When to File GSTR-1

The due date for filing GSTR-1 relies on your business's annual turnover:

•       Businesses with a turnover more than Rs. 5 crore: 

You must file monthly by the 11th of the following month.

•       Businesses with a turnover uptil Rs. 5 crore (opting for QRMP scheme): 

You can file quarterly by the 13th of the month after the relevant quarter.

What Happens if I File Late?

A late filing fee applies for GSTR-1. Currently, it's Rs. 50 per day for regular returns and Rs. 20 per day for nil returns.

How to File GSTR-1

Filing GSTR-1 involves these steps:

1.     Visit the GST portal and log in using your credentials.

2.     Go to the "Services" tab and select "Returns" followed by "Returns Dashboard."

3.     Choose the relevant financial year and return filing period.

4.     Click "Search" and locate the section for "Details of outward supplies of goods or services."

5.     Select "Prepare Online" for filing with fewer than 500 invoices, or "Prepare Offline" for a larger number.

6.     Fill out the relevant sections based on your transactions. Here's a breakdown of some key sections:

o   4(A, B, C), 6(B, C): Report B2B invoices (sales to other businesses).

o   5A, 5B: Report B2C (large) invoices (sales exceeding Rs. 2.5 lakh to consumers).

o   9B: Report credit/debit notes issued to registered taxpayers or unregistered individuals.

o   6A: Report export invoices.

o   7: Report B2C (other) invoices (sales less than Rs. 2.5 lakh to consumers).

o   8A, 8B, 8C, 8D: Report nil-rated supplies (sales not attracting GST).

o   11A(1) and (2): Report details of advances received for future sales.

Report adjustments for advances received in a previous period but invoiced in the current period.

o   12: Provide an HSN-wise summary of outward supplies (includes product codes, GST rates, and quantities).

o   13: Declare the number of invoices generated during the return period.

Once you fill all sections, review the summary, tick the acknowledgement box, and submit the return.

Follow these steps to file GSTR-1 accurately on time, avoiding penalties and staying compliant with GST rules.