A number of modifications to CBIC’s current return have been reported in Form GSTR-3B. The form used by the government to collect tax from its citizens is called Form GSTR-3B.
- The CBIC has included a new table 3.1.1 in which taxpayers must disclose information on supplies made through e-commerce operators (ECO), if such ECO is subject to reverse charge
- Table 4 has also been modified, specifically parts B and Part D deals with reporting of ITC that does not affect ITC eligibility, while Part B deals with ITC reversal.
The CBIC has suggested making some changes or disclosures in the GST filings to improve taxpayer convenience. Additionally, the CBIC has suggested that a separate amendment table in GSTR-3B be included to show the modifications that taxpayers have made to GSTR-1, which lists all of a business’s sales.
Summary of Proposed GST Return Changes
GSTR-3B is adding a new Table 3.1.1 where both registered people and electronic commerce operators (ECO) can report.
The Electronic Commerce Operator (ECO) and registered persons can both report supplies made in accordance with Section 9 in a new Table 3.1.1 that is being added to GSTR-3B. The supplies made to composition dealers, unregistered individuals or UIN holders must be reported by tax payers.
Taxpayers with ATTO of more than 5 Crores must submit HSN in table 12 of GSTR-1 starting on August 1, 2022. Additionally, the CBIC has announced a few amendments to Table 4 of Form GSTR 3B that mandate taxpayers provide information on ITC correctly claimed, ITC reversed, and ITC declared invalid.
Proposed Modifications to GSTR-3B
- The GSTR-3B form, a composite report that includes information on sales, purchases, input tax credit (ITC) and taxes owed has undergone a number of revisions proposed by the CBIC to improve taxpayer convenience and ease of filing
- To report supply made under Section 9 there is a new table in GSTR
- Electronic Commerce Operators (ECOs) and registered individuals can both report supplies made under Section 9 under a new Table 3.1.1 that is being added to GSTR-3B as of Notification 14/2022 – Central Tax, dated July 5, 2022. (5).
- According to Section 9(5) of the CGST Act, if a service is provided through an electronic commerce operator (ECO), that service must be taxed. Examples of such services include passenger transportation services, lodging services, housekeeping services, and restaurant
- The supply made in accordance with section 9(5) must be reported by an ECO in Table 3.1.1(i) of GSTR-3B and not in Table 1(a) of GSTR-3B.
- The ECO in Table 3.1.1(i) of GSTR-3B must pay the appropriate tax on these supplies in cash only, not through
- A registered person who performs the services as described in Section 9(5) through an ECO must record such supplies in Table
3.1.1 and not in Table 3.1 of GSTR-3B.
- As the ECO is obligated to pay tax on such products, the registered individual is not compelled to do
According to the suggested amendments in Table 4 of GSTR 3B, the taxpayer must now compelfully disclose the following reversal:
- Except for ITC that is ineligible under Section 16(4) of the CGST Act, 2017 and ITC where the recipient of an interstate supply is located somewhere other than the site of supply, the total ITC will automatically populate from GSTR-2B into Form GSTR-3B.
- Reversal of an ITC that cannot be reclaimed, such as under section 17(5) of the CGST Act of 2017 or rules 38, 42, and 43 of the CGST Rules,
- ITC reversed due to failure to pay consideration to the supplier within 180 days may be retrieved after fulfilling certain requirements, such as the Registered Person will also disclose ITC reversed for the time
- When certain requirements are met, such as when an ITC was reversed due to the supplier not receiving payment within 180 days, it may be reclaimed. The Registered Person will also report any ITC that has been reversed in the past. A registered person may also use Table 4(B)(2) to reverse any ITC that was mistakenly claimed in Table 4(A) during prior tax
- Other information
- ITC reclaimed that was reversed under Table 4(B)(2)
- In a previous tax period Ineligible ITC under Section 16(4) and Restricted ITC as a result of PoS
- In addition, the CBIC has released a circular instructing taxpayers to submit accurate and complete returns. The tables on Forms GSTR-1 and GSTR-3B must provide accurate information on interstate supplies, the amount of ineligible/blocked ITC and the reversal of that
- The circular’s instructions state that: Interstate supplies made to unregistered individuals must be reported location-by- location in Table 3.2 of Form GSTR-3B, Table 7B, Table 5, or Table 9/10 of Form GSTR-1.
- Interstate supplies made to composite dealers must be reported in Table 3.2 of Form GSTR-3B and Tables 4A, 4C, or Table 9 of Form GSTR-1, location of supply-by-place.
- Registered persons shall ensure that the correct POS is indicated in tax invoices and pertinent returns, and shall update their customer databases properly with the correct state name.
- According to Form GSTR-2B, the total ITC—both eligible and ineligible—must be submitted in various fields of table 4A in Form GSTR-3B.
- Table 4 (B) (1) of the Form GSTR-3B must be filled out for ITC reversals that are absolute in character and not subject to
The ITC listed below must be reported:
- Rule 38 (reversal of credit by a bank or other financial institution) and Rule 42 are two
- Rule 42 (reversal on input and input services due to the delivery of exempt goods or services);
- Rule 43 (reversal on input and input services); (reversal on capital goods on account of supply of exempted goods or services) f) Reversal of ITC that are not permanent and can be reclaimed, subject to certain conditions, shall be reported in table 4 (B) (2) of Form GSTR-3B.
- Ineligible / blocked ITC under section 17(5) of the CGST Act The subsequent ITC must be reported:
- Rule 37 (non-payment of consideration to supplier within 180 days) Section 16(2)(b)
- Non-receipt of goods or services in relevant tax period) Section 16(2)(c)
- Tax has not been paid by the supplier
- Reversal of any ITC obtained in prior tax periods due to an
- The taxpayer must include any information in part D of table 4 that does not affect the ITC that will be credited to the Electronic Credit
Part D of Table 4 of Form GSTR-3B requires the reporting of the following items :
(i) ITC that was previously reversed under Table 4(B)(2) in earlier tax periods, as noted in the previous bullet point.
- ii) Invalid ITC under section 16(4) – where ITC is rendered ineligible due to a time period limitation (30th September of the subsequent year) When the recipient of an intrastate supply is located in a different state or UT than the site of supply, ITC is restricted due to PoS requirements.