Complete Guide to Filing GSTR-1: Rules, Requirements, and Procedures

GSTR-1 is a monthly or quarterly return that a registered businesses required to file under the Goods and Services Tax (GST) rules and regulation. The purpose of this return is to provide details of the outward supplies, i.e., sales of goods and services, made by a taxpayer.

GSTR-1 plays an important role in the GST compliance system, wherein the data entered into this form is used to calculate the tax liability and allows tax authorities to cross-check the validity of transactions.

Online GST Return Filing Delhi is a basic requirement for businesses in India that are registered under GST. The information shared in this return helps the government to track the movement of goods and services, ensuring that the correct amount of tax is levied and paid.

2. Who is required to File GSTR-1?

All GST-registered businesses are required to file GSTR-1, except for those businesses opting for the Composition Scheme. The requirements for filing GSTR-1 depend on the turnover of the business:

• Monthly Filing: Businesses having annual turnover exceeding Rs. 5 crore required to file GSTR-1 on a monthly basis.
• Quarterly Filing: Businesses having turnover of Rs. 5 crore or below may choose to file GSTR-1 quarterly, provided they opt for the Quarterly Return Filing (QRMP) scheme.
• Non-Residents: Non-resident taxable persons who are registered under GST must also file GSTR-1 on monthly basis.
• E-Commerce Operators: Businesses involved in e-commerce transactions are also required to file GSTR-1 regularly.

Pertinently, the taxpayers under the Composition Scheme not required to file GSTR-1. However, they are mandated to file a simpler return called GSTR-4.

3. GSTR-1 Filing & its Importance

GSTR-1 serves various purposes in the GST laws, which are as under:

1. Tax Compliance and Transparency: Filing GSTR-1 ensures transparency in reporting sales transactions, which is crucial for tax determining the correct tax liability.
2. Foundation for GSTR2B & GSTR-3B: The data entered in GSTR-1 is used to generate other returns, primarily GSTR-2B & GSTR-3B, which are a summary return for the payment of GST. Without correct GSTR-1 filing, the tax payment process could be wrong.
3. Verification of Input Tax Credit (ITC): GSTR-1 helps businesses to ensure that the details of outward supplies are reported correctly so that buyers can claim the Input Tax Credit (ITC) against their purchases.
4. Government’s Revenue Collection: The government utilise the said data from GSTR-1 to track tax collections from different sectors, ensuring that taxes are paid promptly.
5. What is the Structure of GSTR-1?

GSTR-1 is a detailed return Form and consists of several sections and tables where taxpayers must report various types of information. The main sections include:

Part A: Basic Information

• GSTIN: The GST Identification Number of the taxpayer.
• Legal Name: The legal name of the registered taxpayer.
• Tax Period: The specific period (monthly or quarterly) for which the return is being filed.

Part B: Outward Supplies Information

This section is divided into various tables, each addressing a different type of transaction:

1. Table 4: Details of B2B (Business to Business) It includes the GSTIN of the buyer, the taxable value, and the applicable GST rates.
2. Table 5: Details of B2C (Business to Consumer) supplies, where no GSTIN is available for the buyer.
3. Table 6: Information about exports of goods and services.
4. Table 7: Report of Zero-rated supplies, which refers to supplies that are subject to a zero GST rate.
5. Table 8: Details of Deemed Exports, including transactions where goods are exported but are treated as deemed exports under GST law.
6. Table 9: Debit and Credit Notes issued during the period.
7. Table 10: Information about reversed supplies.
8. Table 11: Reporting of HSN/SAC Code (Harmonized System of Nomenclature/Service Accounting Code) for the outward supplies.
9. Procedure for Filing GSTR-1

Filing GSTR-1 includes various steps that must be followed in sequence for correct reporting. These steps ensure that the return is filed accurately and on time.

Step 1: Login into GST Portal

• Go to the official GST portal (https://www.gst.gov.in) and log in with your Username and Password.

Step 2: Navigate to Returns Dashboard

• After logging in, click on the Returns Dashboard tab, which will show you the available options to file returns.

Step 3: Select the Tax Period

• Choose the tax period for which you want to file GSTR-1 (monthly or quarterly). The portal will display the months/quarters for which the return needs to be filed.

Step 4: Enter Sales Details

• In the respective tables, enter the details of the sales transactions made during the period. This includes B2B sales, B2C sales, exports, and any debit or credit notes issued.

Step 5: Submission and File

• Once all the details are entered, validate the data to check for errors. After successful validation, click on Submit and then File to submit the return.

Step 6: Acknowledgment

• After filing the return, the GST portal will generate an Acknowledgment Receipt. Download and save this receipt for your records.

6. Details to Be Reported in GSTR-1

The following key details must be reported in GSTR-1:

1. Invoice Details

• B2B: For each Business-to-Business transaction, report the invoice details, including the buyer’s GSTIN, taxable value, and GST rates.
• B2C: For sales to consumers, the invoice details are reported based on whether the supply is interstate or intrastate.

2. Exports

• Exports of Goods and Services: If the business engages in exports, these transactions need to be reported in a separate section with details such as the value of goods and the relevant tax rates.

3. Debit and Credit Notes

• Debit Notes: Adjustments to invoices where the value of the goods or services supplied is increased.
• Credit Notes: Adjustments where the value of the goods or services is reduced.

4. HSN/SAC Details

• HSN Code: Businesses must mention the Harmonized System of Nomenclature (HSN) code for each of the goods sold. For services, the Service Accounting Code (SAC) is used.

7. Common Mistakes to Avoid While Filing GSTR-1

1. Incorrect GSTIN of the Buyer

Ensure that the correct GSTIN is mentioned for B2B transactions. A mismatch in GSTIN can result in delayed or rejected claims for Input Tax Credit (ITC).

2. Missing Invoice Numbers

Each sale must be associated with a unique invoice number. Missing invoice numbers can cause discrepancies in the reporting.

3. Incorrect HSN/SAC Codes

Enter the correct HSN codes for goods and SAC codes for services. Incorrect classification can lead to mismatches with the tax rates applied.

4. Failure to Amend Previous Returns

If there are any errors in the previous months or quarters, they must be amended in the subsequent filing. Failing to do so can result in penalties.

8. GSTR-1 vs GSTR-3B: Key Differences

GSTR-1 and GSTR-3B are both essential returns under GST, but they serve different purposes:

• GSTR-1: Focuses on reporting outward supplies (sales).
• GSTR-3B: A summary return that businesses use to report their net tax liability, including both outward and inward supplies.

GSTR-1 data is used to compute the figures reported in GSTR-3B. While GSTR-1 deals with sales, GSTR-3B involves payment of taxes and claiming Input Tax Credit.

9. Amendments in GSTR-1

Businesses may need to amend GSTR-1 if there are discrepancies or missing details. Amendments can be made by filing a corrected GSTR-1 in the next tax period. This is particularly important for ensuring that taxes are paid correctly and buyers can claim ITC.

10. GSTR-1 and GSTR-2A Reconciliation

GSTR-1 needs to be reconciled with GSTR-2A, which reflects the purchases made by the taxpayer. It ensures that the data in GSTR-1 matches the details in GSTR-2A is critical for maintaining accurate records and avoiding discrepancies in tax payments or ITC claims.

11. Filing Deadlines and Late Fees

The due date for GSTR-1 filing depends on whether the taxpayer is filing monthly or quarterly. If a business misses the deadline for filing, a late fee of Rs. 50 per day (Rs. 20 for NIL returns) would be applicable.

12. GST Audits and GSTR-1

GSTR-1 plays an important part of the GST audit process. During an audit, tax authorities will review the outward supplies reported in GSTR-1 to ensure that businesses are compliant with appliable tax laws and regulations.

Taxcellent helps you in filing GSTR-1 & GSTR-3B on monthly basis and quarterly basis in a timely manner, also consider the GST Annual Return for your business.