GST in India started on 1 July 2017 with the President and Prime Minister flipping a switch to start the new regime. Certain rates and schedules were revised before the full set of GST rules was published in a single document on 2 July 2017.

As a result of the revision to the filing schedule, GSTR-3 has been suspended for several months. Instead a new form called GSTR-3B will be filed in its place for August and September 2017. GSTR-3B is found on page 209 of the CGST Rules released by the CBEC.

  1. The first difference between GSTR-3 and GST-3B is the length

    • GSTR-3 is six pages of multiple boxes which are filled in through a combination of auto-population and manual submissions
    • While GSTR-3B is merely 2 pages long. Therefore, already the government is giving everyone a break to help them transition into the detailed reporting of the future
  2. The second difference between GSTR-3 and GST-3B is the quantity of information required for processing the return
    • GSTR-3 is a return which requires the tax payer to have completed providing the detailed summaries of outward and inward supplies in GSTR-1 and GSTR-2 respectively
    • GSTR-3B instead requires taxpayers to provide information such as: total taxable value, IGST, CGST, SGST and Cess
      • There are no detailed requirements to report and classify transactions along the axes of B2B, B2C, inter-state, intra-state and others
    • GSTR-3B is a tax return form more like the VAT/GST returns found in Australia and the United Kingdom
      • Instead of providing detailed rate and type wise breakdowns of supplies it focuses on just the totals of the data

The major challenge here is that while one must be ready to provide data in this format (GSTR-3B) on August 20th, she/he should simultaneously continue to work towards preparing more detailed data, ready to feed into GSTR-1 and GSTR-2 within the next couple of months, that will be required for completing the GSTR-3 returns.

Here is the timeline everyone is facing:

  1. August 20 – GSTR-3B Due for July Transactions
  2. September 5 – GSTR-1 Due for July Transactions
  3. September 10 – GSTR-2 Due for July Transactions
  4. September 20 – GSTR-3B Due for August Transactions
  5. September 20 – GSTR-1 Due for August Transactions
  6. September 25 – GSTR-2 Due for August Transactions

Therefore, at a minimum your ability to create GSTR-1 data must be ready by September; but even before that you must generate the summary data for the previous month. Now what has occurred is everyone is going to do a pre-filing before the actual returns are filed for months. So, the validations must be set to ensure that the GSTR-3B summaries meet the actual totals.

It’s important to keep these different targets in mind over the next couple of months. Also, if there is a delay from the GSTN side then this scheme could continue.

A trusted partner and powerful tax solutions can help to deal with changing rules and regulations. From the 25th of June to 2nd of July, hundreds of pages of documentation have been published, which has made small changes and several corrigenda published as well.

It is important to strengthen your upstream business process to deal with the changing downstream reporting requirements. The ability to calculate and generate proper invoices will provide you the accurate data you need for the different return requirements over the next several months. It will also be important to carefully validate the counter-party invoice data as opposed to the format to ensure it is correct.

by Anil Kuruvilla.

He is an international Taxation Expert and Chief Content Officer at Adaequare (Parent company of Udyog Software).


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