INTRODUCTION TO GSTR-3B

The Goods and Services Tax (GST) regime, introduced in India in 2017, aimed to simplify the indirect
taxation system by replacing multiple taxes levied by the central and state governments with a single
tax. Key to GST compliance are the various returns that businesses must file, including GSTR-3B.
Originally, GSTR-3 was intended as a summary return based on GSTR-1 and GSTR-2 filings.
However, GSTR-2 was not implemented, leading to the introduction of a temporary return, GSTR-3B,
which later became a permanent fixture.

GSTR-3B is a monthly self-declaration that taxpayers must file under GST to fulfill their GST
liability. Unlike GSTR-3, it does not rely on input from other returns. Registered taxpayers, except for
input service distributors, non-resident taxpayers, and those liable for tax deduction or collection at
source, as well as composition dealers, are required to file GSTR-3B.

The primary purpose of GSTR-3B is to provide a summary of both inward and outward supplies,
along with details of input tax credit (ITC) claimed and tax payable. It serves as a crucial tool for
taxpayers to accurately report their tax obligations and maintain compliance with GST regulations.

WHO SHOULD FILE FOR GSTR-3B?

1. Mandatory Filers: Every person registered under GST is required to file GSTR-3B.
2. Exemptions:

 Taxpayers registered under the Composition Scheme.

WHEN TO FILE GSTR-3B?

GSTR-3B is filed on a monthly basis, and the due date for filing varies based on the turnover of the
taxpayer. Typically, it needs to be filed by the 20th of the succeeding month. However, for taxpayers
with an annual turnover of up to Rs. 5 crore, the due date is extended to the 22nd (Telangana)/24th of
the succeeding month, depending on the state/UT of registration.

The following are essential points to note:

i. Taxpayers must ensure to pay taxes and file GSTR-3B within the deadline.
ii. The late filing of GSTR-3B attracts a late fee and interest at 18% per annum.
 iii. In case the tax was paid within the due date but the GSTR-3B was filed after the deadline,
both late fees and interest will apply.
iv. Taxpayers (including those not opting for the QRMP Scheme) filing quarterly GSTR-1
returns must still pay tax and file GSTR-3B every month.

CONSEQUENCES OF NON-COMPLIANCE

I. Penalties and Late Fees: Late filing of GSTR-3B can result in penalties and late fees
imposed by the tax authorities. These fees can accrue on a daily basis until the return is
filed.

Section 47 CGST ACT,2017: Late Fee for Non-Filing of GST Returns

1. Late Fee for Failure to Provide Details or Returns (Subsection 1):

If a registered person doesn't submit the required details of outward supplies (as per Section 37) or
doesn't file returns (as per Section 39, Section 45, or Section 52) by the due date, they have to pay a
late fee.

The late fee is one hundred rupees for each day of delay, with a maximum cap of five thousand
rupees.

2. Late Fee for Failure to Submit Return (Subsection 2):

If a registered person fails to furnish the return required under Section 44(Annual Return) by the due
date, they're liable to pay a late fee.

The late fee is one hundred rupees for each day of delay, but the maximum amount can't exceed a
quarter percent of their turnover in the respective State or Union territory.

Section 50: Interest on Delayed Payment of Tax

1. Interest on Delayed Payment of Tax (Subsection 1): If any person liable to pay tax under
the CGST Act fails to pay the tax or any part of it to the Government within the prescribed
period, they must pay interest on the unpaid amount.

The interest rate, not exceeding eighteen percent, is notified by the Government based on
recommendations from the GST Council.
 2. Proviso - Interest on Delayed Payment in Returns (Subsection 1, Provided Clause):
Interest on tax payable for supplies made during a tax period and declared in the return
furnished after the due date (except if proceedings under Section 73 or Section 74 have
commenced) is payable on the portion of tax debited from the electronic cash ledger.
3. Calculation of Interest (Subsection 2): Interest under Subsection 1 is calculated from the
day following the due date for payment of tax, as prescribed.

II. Blocking of Input Tax Credit (ITC): Non-compliance with GSTR-3B filing
requirements may lead to the blocking of input tax credit. This means that businesses
won't be able to claim credit for taxes paid on their purchases, affecting their cash flow
and financial operations.
III. Cancellation of GST Registration: Persistent non-filing or non-compliance with GSTR-
3B requirements can lead to the cancellation of GST registration. This can have serious
implications for businesses, including the inability to legally conduct taxable transactions.
IV. Legal Proceedings: Tax authorities may initiate legal proceedings against non-compliant
taxpayers, which can result in fines, penalties, and other legal ramifications. This could
include audits, investigations, and potential prosecution for tax evasion or non-
compliance with GST regulations.

DOCUMENTS REQUIRED FOR FILING GSTR-3B

Following is the list of documents that documents need to be reported while filling out the application:

1. Tax on Outward & Reverse Charge Inward Supplies