Under the Goods and Services Tax (GST) law, every registered person is mandated to file the details of outward supplies made during a relevant tax period, either monthly or quarterly. These details must be submitted electronically through the GSTN portal in a statement known as Form GSTR-1. This document serves as a comprehensive guide to the legal provisions, requirements, and procedural aspects of filing Form GSTR-1 under the GST legislation. It provides clarity on how the form must be completed, the timelines, exceptions, and special provisions that may apply depending on the nature of registration and turnover of the taxpayer.
Overview of Form GSTR-1
The GST legislation imposes an obligation on every registered person to report outward supplies. This includes submitting invoice details, debit notes, credit notes, and revised invoices that relate to outward supplies made during a tax period. Form GSTR-1 is the form in which such disclosures are made. The discussion on GSTR-1 can be broadly categorized into the requirement for filing, other procedural provisions, and the detailed instructions for furnishing data using Form GSTR-1 or the Invoice Furnishing Facility (IFF).
Requirements for Filing Form GSTR-1
This section explains who is required to file Form GSTR-1 and under what circumstances. It also provides information about the eligibility for using the Invoice Furnishing Facility, how to handle nil returns, and the legal constraints that may prevent filing the form in certain cases.
Registered Persons Required to File Form GSTR-1
As per GST law, every registered person must furnish the details of outward supplies of goods or services or both during a tax period in the prescribed form. The Central Goods and Services Tax Rules mandate that such information must be disclosed in Form GSTR-1. However, there are specific exclusions. The following categories of persons are not required to file Form GSTR-1: Input Service Distributors, non-resident taxable persons, persons registered under the composition scheme, those registered solely as tax deductors or tax collectors, and those providing Online Information and Database Access or Retrieval services (OIDAR) from outside India to unregistered persons in India.
Invoice Furnishing Facility for QRMP Scheme
With effect from January 1, 2021, the government introduced the Quarterly Return Monthly Payment (QRMP) scheme. This applies to taxpayers whose aggregate turnover in the preceding financial year does not exceed Rs. 5 crores. Under this scheme, taxpayers are allowed to file Form GSTR-1 every quarter. However, they must pay taxes monthly. To ensure that recipients of supplies receive invoice information promptly and can claim input tax credit without delay, suppliers under the QRMP scheme can use the Invoice Furnishing Facility. This facility allows them to upload B2B invoices monthly, even though they file GSTR-1 quarterly. It enables smoother reconciliation and timely credit for recipients.
Nil Details in Form GSTR-1
Even in cases where no outward supply has been made during a tax period, the registered person is still required to file Form GSTR-1. The law does not provide an exemption from filing for zero-transaction months or quarters. This ensures continuity in compliance and avoids assumptions about deactivation or suspension of GST registration due to non-filing.
Restrictions in Filing Form GSTR-1 and Using IFF
Certain legal conditions may restrict a registered person from furnishing Form GSTR-1 or using the Invoice Furnishing Facility. These constraints are designed to enforce compliance with other filing requirements under GST law.
Mandatory Filing of Form GSTR-3B for Previous Period
A person cannot file Form GSTR-1 or use the IFF unless they have filed Form GSTR-3B for the preceding tax period. Form GSTR-3B is a summary return that includes tax payments. The government enforces this requirement to ensure that tax liability is paid before invoice details are disclosed to recipients. This condition prevents situations where input tax credit may be claimed by the recipient while the supplier has not paid the corresponding tax.
Mandatory Filing of Previous Form GSTR-1
A person cannot file the current period’s GSTR-1 unless all previous GSTR-1 filings have been completed. This is to maintain the chronological integrity of outward supply declarations. However, the government may provide conditional relief to certain taxpayers through notifications, allowing them to file even if one or more earlier GSTR-1 returns are pending.
Time Limits for Filing Form GSTR-1
The law prescribes specific timelines for filing Form GSTR-1. In the case of monthly filers, Form GSTR-1 must be submitted by the 11th day of the month following the tax period. For quarterly filers under the QRMP scheme, the deadline is the 13th day of the month following the end of the relevant quarter. These due dates help streamline the matching of input tax credit and allow timely compliance by both suppliers and recipients.
Time Limit for Using the Invoice Furnishing Facility
For the first two months of a quarter, suppliers under the QRMP scheme may report invoices using IFF. The permissible window is from the 1st to the 13th of the month following each of the two months in the quarter. This allows B2B invoice data to be made available monthly to recipients for claiming input tax credit, even though the supplier files GSTR-1 quarterly.
Authority to Extend Filing Due Dates
The Commissioner has the authority to extend the time limits for filing Form GSTR-1. Under the GST framework, any notification issued by a State Commissioner or Union Territory Commissioner to extend the due date is automatically applicable to the corresponding central tax return. Therefore, there is no requirement for duplicate notifications from both central and state authorities.
Summary of Due Dates
The due dates for Form GSTR-1 and the Invoice Furnishing Facility are as follows. For monthly GSTR-1 filers, the return must be filed by the 11th of the following month. For quarterly filers, the return is due by the 13th of the month following the end of the quarter. For IFF under the QRMP scheme, invoices can be uploaded from the 1st to the 13th of the month following the relevant month in the quarter.
Revision or Rectification of Form GSTR-1
GST law does not allow the revision of Form GSTR-1 once it is filed. If any errors or omissions are discovered, the registered person must rectify them in the return for the month or quarter during which the error is noticed. The law requires that such corrections must be made by the earlier of two deadlines. One is November 30, following the end of the financial year to which the return relates. The other is the date of filing the relevant annual return. For the period from July 2017 to March 2018, the correction deadline was extended to the due date of the return for March 2019.
Late Fee for Delayed Filing of Form GSTR-1
If a registered person files Form GSTR-1 after the due date, a late fee is applicable. The standard fee is Rs. 200 per day, split equally between central and state GST. However, the government has notified reduced rates. For normal returns, the fee is Rs. 50 per day, capped based on the turnover of the previous financial year. The maximum fee is Rs. 2,000 for turnover up to Rs. 1.5 crore, Rs. 5,000 for turnover between Rs. 1.5 crore and Rs. 5 crore, and Rs. 10,000 for turnover above Rs. 5 crore. For Nil returns, the late fee is Rs. 20 per day, with a maximum of Rs. 500.
Recovery of Tax on Transactions Declared in GSTR-1 but Not Paid
The Finance Act, 202, introduced a clarification on the definition of self-assessed tax. It includes tax declared in Form GSTR-1 but not paid in Form GSTR-3B. If outward supplies are disclosed in GSTR-1 but the tax is not paid through GSTR-3B, the government considers it self-assessed tax and may initiate recovery proceedings. This amendment strengthens enforcement by allowing the tax department to recover unpaid taxes even if the supplier only declared them in GSTR-1.
Invoice-Level Matching of Supplier and Recipient Data
The original GST design aimed at invoice-level matching of supplier declarations with recipient records. Details filed in Form GSTR-1 were supposed to auto-populate Form GSTR-2A, enabling the recipient to file Form GSTR-2. Any changes proposed by the recipient would be sent to the supplier through Form GSTR-1A, and based on this interaction, Form GSTR-3 could be filed. However, this matching system could not be implemented due to practical challenges. As a result, the government shifted to the filing of GSTR-1 and GSTR-3B independently. Subsequently, the Finance Act, 202, deleted the provisions related to invoice matching from the statute, effective October 1, 2022.
Filing of Form GSTR-1 on GSTN Portal
Form GSTR-1 must be filed electronically using the GSTN portal. Upon submission of outward supply details by the supplier in Form GSTR-1, the information is made available to the recipient in Form GSTR-2A. Based on the auto-populated Form GSTR-2A, the system generates Form GSTR-2B for the recipient. Form GSTR-2B is a static monthly statement that reflects the eligible input tax credit for that month. The system helps ensure smooth communication between the supplier and the recipient by auto-populating relevant data through interconnected forms.
Filing Nil Form GSTR-1 Using SMS Facility
For taxpayers who have no outward supplies to declare for a given period, the government has enabled a simplified method of filing Nil GSTR-1 via SMS. The facility can be used by sending a predefined message from the registered mobile number to the government-designated number. The message format for this facility is NIL space return type space GSTIN space return period. Upon submission, an OTP is sent for verification. Once verified, the Nil return is considered filed. This facility saves time and eliminates the need to log into the portal for filing returns with no transactions.
Definition of Nil Return for GSTR-1
A Nil return in Form GSTR-1 means there are no entries in any of the tables for the tax period. If there are no outward supplies and no amendments to previous supplies, the return qualifies as Nil and can be submitted using the SMS facility. This helps smaller taxpayers or seasonal businesses to stay compliant without unnecessary portal logins.
Furnishing Invoices Using the Invoice Furnishing Facility
Taxpayers registered under the QRMP scheme can submit B2B invoice details for the first two months of the quarter using the Invoice Furnishing Facility. This facility is accessed electronically through the GSTN portal. The primary objective is to ensure that invoice data reaches the recipients promptly, enabling them to claim input tax credit without waiting for the quarterly return. The invoices uploaded using the IFF are automatically reflected in Form GSTR-2A and Form GSTR-2B of the recipient. This enhances transparency and reduces reconciliation issues.
Auto-Population of Invoice Details from IFF to GSTR-1
Once invoice details have been furnished using the IFF for the first two months of a quarter, there is no need to upload those invoices again while filing the quarterly Form GSTR-1. The system automatically transfers the data from the IFF to GSTR-1, avoiding duplication of effort and reducing the chances of error. This system-based automation helps streamline the reporting process.
Auto-Population of e-Invoice Details in Form GSTR-1
Certain taxpayers are required to generate invoices through the Invoice Registration Portal and obtain an Invoice Reference Number. When a registered person generates an e-invoice through the IRP, all the relevant details are uploaded to the portal. To simplify reporting, the GSTN system facilitates auto-population of such e-invoice data into Form GSTR-1. This ensures that the taxpayer is not required to manually enter the same invoice data again. This not only reduces manual work but also eliminates discrepancies between e-invoicing data and GSTR-1 filings.
Importing Invoice Details from E-Way Bill Portal
For registered persons required to generate e-way bills, the GSTN system provides an additional facility to import invoice data directly from the e-way bill portal into Form GSTR-1. This is particularly helpful in preparing the return as it reduces manual data entry and increases accuracy. Taxpayers can use the Import EWB Data option on the GSTN portal to pull invoice details that have already been recorded in the e-way bill system. This integration between two compliance systems streamlines data consistency and saves time for businesses.
Auto-Population of Export Invoice Details from Table 6A
Exporters are required to furnish details of exports with payment of tax in Table 6A of Form GSTR-1. If the filing of Form GSTR-1 is delayed, but the exporter still wants to claim a refund of IGST paid on exports, they can file Table 6A separately. Once the main Form GSTR-1 is filed, the export data from Table 6A gets auto-populated into it. This provision ensures that export-related refund claims are not delayed merely due to a delay in the filing of the full GSTR-1 return. It enables exporters to continue their refund process even if the complete return is not yet submitted.
Auto-Populated Data Flow Between Forms
The information furnished by suppliers in Form GSTR-1 becomes available in the recipient’s Form GSTR-2A and the auto-drafted Form GSTR-2B. This inter-form communication ensures that the recipient can view the tax invoices and determine the eligibility of input tax credit. The system is designed to automate the process of data sharing and reconciliation between businesses. This reduces the chances of mismatched returns and assists businesses in maintaining proper compliance under GST.
Instructions for Filling Form GSTR-1
While filing Form GSTR-1, the taxpayer is required to enter a variety of information related to outward supplies. This includes invoice-wise details of B2B supplies, details of supplies to consumers, export invoices, debit notes, credit notes, and amended invoices. Each section of the form corresponds to a specific category of outward supplies. Accurate and timely entry of data is essential to avoid issues during reconciliation or audit. The taxpayer should ensure that all mandatory fields are correctly filled and cross-verified before final submission.
Fields Available Under Invoice Furnishing Facility
Taxpayers using the IFF under the QRMP scheme can submit details only for specific fields. These include business-to-business invoices, credit and debit notes issued to registered persons, amended B2B invoices, and amended credit or debit notes for registered recipients. No other types of supplies, such as B2C or export invoices, are permitted to be furnished under the IFF. This restricted scope ensures that the IFF focuses solely on the most critical invoice data needed for recipient’s’s input tax credit.
Functional Benefits of IFF
The IFF provides several operational advantages. It helps ensure the timely availability of input tax credit for recipients by enabling early disclosure of invoice data. It also spreads the compliance burden over the quarter instead of concentrating it at the end. Small taxpayers can manage their workload more efficiently, and large businesses purchasing from them can claim credits on time. The system balances flexibility for small suppliers with the needs of larger buyers, improving the overall efficiency of the tax credit system.
Importance of Timely and Accurate Filing
Inaccurate or delayed filing of Form GSTR-1 can lead to multiple complications. It may cause delays in input tax credit for recipients, create reconciliation mismatches, or attract late fees and penalties. More importantly, if outward supplies are declared in GSTR-1 but the corresponding tax is not paid in GSTR-3B, the supplier may face recovery actions from the tax authorities. Therefore, businesses must take the preparation and filing of GSTR-1 seriously and ensure it is submitted on time with accurate data.
Amendment of Details Furnished in GSTR-1
In the case of any error or omission in the details filed in GSTR-1 of a particular tax period, taxpayers are allowed to make amendments. These amendments must be done in the return for the month in which such corrections are noticed. However, these changes can only be made in returns filed before the due date of filing of return for September following the end of the financial year or the actual date of filing of annual return, whichever is earlier. The amendment options in GSTR-1 allow the correction of invoices, credit/debit notes, and other related information already submitted. However, certain restrictions exist regarding amendments. For instance, an invoice once amended cannot be amended again, and taxpayers must be cautious when submitting corrections. These amendments help ensure the accuracy of the data shared with the government and help the recipient claim appropriate input tax credit.
Consequences of Non-Filing or Late Filing of GSTR-1
Failure to file GSTR-1 on time attracts penalties and other consequences. Accordinge the GST law, a late fee of Rs. 50 per day of delay is levied, subject to a maximum of Rs. 10,000. If the return is a nil return, the late fee is reduced to Rs. 20 per day of delay, up to Rs. 500. Moreover, the system does not allow the filing of GSTR-1 for a tax period if GSTR-3B for the previous period has not been filed. This linkage ensures that taxpayers comply with their overall GST obligations promptly. Additionally, recipients of supplies may face input tax credit mismatches if the supplier does not file GSTR-1 on time, thereby affecting business relationships and cash flows. Regular compliance is therefore essential for avoiding monetary penalties and maintaining seamless operations.
Rectification of Errors and Omissions
Any errors or omissions noticed by the taxpayer after filing GSTR-1 can be rectified in the return for the month in which such error is discovered. However, rectifications are allowed only if the relevant deadlines have not passed. This includes the earlier of the due date for filing GSTR-3B for September, following the end of the financial year,, or the actual date of filing the annual return. This limitation ensures finality in returns and prevents misuse of the amendment facility. It is important to note that rectification of errors is permitted only for genuine mistakes and not for fraudulent reporting or misrepresentation. Maintaining accurate records, regularly reconciling sales data, and cross-verifying with books of accounts can minimize the chances of errors and reduce the need for amendments.
Matching of GSTR-1 with GSTR-3B
GSTR-1 is the return for outward supplies, while GSTR-3B is a summary return including tax liability and credit utilization. The data reported in GSTR-1 must match the corresponding figures in GSTR-3B for the same tax period. Inconsistencies between the two can lead to compliance issues, notices from tax authorities, and potential penalties. For example, if the tax liability reported in GSTR-1 exceeds that in GSTR-3B, it may indicate underpayment of tax, triggering interest and penal consequences. Similarly, over-reporting in GSTR-3B may affect cash flow or lead to unwanted scrutiny. Therefore, businesses must implement reconciliation procedures at regular intervals. This includes matching invoice values, taxable values, and tax amounts between the two forms. Use of automation tools and accounting software can assist in minimizing manual errors and ensuring that the data filed in both forms is consistent.
Impact of GSTR-1 on Recipient’s Input Tax Credit
One of the key functions of GSTR-1 is that it determines the input tax credit that the recipient of goods or services can claim. Details furnished in GSTR-1 are auto-populated in the recipient’s GSTR-2A and GSTR-2B, which are used by the recipient to determine eligible input tax credit. If the supplier fails to report a particular invoice in GSTR-1, the recipient will not see that invoice in GSTR-2B and will not be able to claim credit. This makes it important for both parties to ensure that invoices are reported accurately and promptly. It also underscores the importance of regular communication and reconciliation between suppliers and recipients. Errors or delays in GSTR-1 filing may adversely impact the working capital of the recipient due to blocked or delayed credits. Businesses must therefore prioritize GSTR-1 compliance not only for their obligations but also for the financial well-being of their customers.
Filing of Nil GSTR-1
Taxpayers with no outward supplies during a tax period are still required to file a nil GSTR-1. A nil return indicates that there were no taxable outward supplies, no amendments to previous invoices, and no other reportable data. This is applicable to taxpayers even if they have not issued a single invoice during the period. The return can be filed through the GST portal or via SMS facility using the registered mobile number. Filing nil returns ensures continued compliance and avoids penalties. If a nil return is not filed on time, late fees may still be levied. Further, delayed filing of nil GSTR-1 can block the filing of future returns and affect compliance ratings. Therefore, even when there are no transactions, taxpayers must ensure the timely submission of nil returns to maintain compliance and avoid procedural disruptions.
Auto-Population in GSTR-2A and GSTR-2B
Once a taxpayer files GSTR-1, the details are reflected in the GSTR-2A and GSTR-2B forms of the recipients. GSTR-2A is a dynamic statement that keeps updating whenever a supplier files or revises GSTR-1, whereas GSTR-2B is a static statement generated monthly and used for input tax credit eligibility. These forms act as a reference point for recipients to verify the invoices and ensure the correctness of input tax credit claims. Errors in GSTR-1, such as incorrect GSTINs or invoice numbers, will lead to the recipient not receiving proper credit. This affects trust and business relationships. It is, therefore, in the interest of both supplier and recipient to maintain accurate and consistent reporting. Automation and regular reconciliation can help reduce mismatches and foster transparency in the GST ecosystem.
Quarterly Filing of GSTR-1 Under QRMP Scheme
Small taxpayers with aggregate turnover up to Rs. 5 crore in the preceding financial year can opt for the Quarterly Return Monthly Payment (QRMP) scheme. Under this scheme, GSTR-1 can be filed quarterly, while tax is paid monthly using PMT-06. Taxpayers opting for QRMP must furnish invoice details using the Invoice Furnishing Facility (IFF) for the first two months of the quarter if they want the data to reflect in the recipient’s GSTR-2A and GSTR-2B. Filing through IFF is optional and limited to Rs. 50 lakh per month. The GSTR-1 for the quarter includes all invoices not reported through IFF and any other necessary data. This scheme simplifies compliance and reduces the filing burden for small taxpayers, although care must be taken to ensure timely reporting through IFF for input credit availability to recipients. Choosing the QRMP scheme must be done carefully, considering business needs and compliance capabilities.
GSTR-1 in Case of Cancellation or Surrender of GST Registration
In case a taxpayer’s GST registration is cancelled or surrendered, the taxpayer is still required to file GSTR-1 for the period up to the date of cancellation. The final return must include all invoices issued before cancellation, including those related to reverse charge transactions. Non-filing of the final GSTR-1 can result in penalties and delays in the cancellation process. If a taxpayer ceases business activities before the end of a tax period, a return must still be filed for that partial period. It is important to ensure that all pending returns are filed, liabilities are discharged, and input tax credit is correctly reversed, if applicable. Proper closure of GST registration and related returns like GSTR-1 ensures compliance and avoids future litigation.
GSTR-1 for Composition Dealers
Composition dealers are not required to file GSTR-1 since they are not permitted to collect tax from customers and instead pay a fixed rate on their turnover. Instead of GSTR-1, they file CMP-08 quarterly and GSTR-4 annually. However, if a composition dealer switches to the regular scheme, they are required to file GSTR-1 from the month in which the switch occurs. Similarly, if a regular taxpayer opts for the composition scheme, they must stop filing GSTR-1 from the effective date of the new scheme. Proper intimation and documentation must be ensured to avoid overlaps or gaps in returns. Taxpayers must understand the implications of such transitions on their compliance calendar and ensure correct filing accordingly.
Amendment toGSTR-1
If a taxpayer has made errors or omissions in the original GSTR-1 form for a particular tax period, they are allowed to correct these mistakes by filing amendments in the GSTR-1 of a subsequent month. The amended invoice or record must reference the original record to ensure traceability. Amendments can be made in areas such as B2B invoices, B2C large invoices, credit/debit notes, and export invoices. However, once the financial year ends and the September return or annual return is filed (whichever is earlier), amendments to GSTR-1 for that financial year can no longer be made.
Late Filing of GSTR-1
Late filing of GSTR-1 attracts penalties and interest. Even if a taxpayer has no sales in a tax period, they must still file a NIL GSTR-1 return to remain compliant. The penalty for late filing is ₹50 per day of delay, and for NIL returns, it is ₹20 per day. Non-filing of GSTR-1 can lead to the blocking of GSTR-3B filing and disrupt the ITC claims of recipients, as their auto-populated GSTR-2A/2B depends on timely filing by the supplier.
Common Errors While Filing GSTR-1
Taxpayers often make several common mistakes while filing GSTR-1. These include entering the incorrect GSTIN of the recipient, incorrect invoice values, misclassification of supply types (interstate vs intrastate), and errors in tax rate or place of supply. Failure to reconcile GSTR-1 with the books of accounts and GSTR-3B can also lead to compliance issues and notices from the tax department. Regular reconciliation and maintaining proper documentation are necessary to avoid such errors.
Importance of Timely and Accurate GSTR-1 Filing
Timely and accurate filing of GSTR-1 is crucial for smooth Input Tax Credit (ITC) flow across the supply chain. GSTR-1 data auto-populates into GSTR-2A/2B of the recipient, which they rely on for claiming ITC. Any error or delay in GSTR-1 directly impacts the recipient’s compliance and working capital. Moreover, it reflects a business’s credibility with its vendors and tax authorities. Accurate filing also helps in reducing the chances of an audit, scrutiny, or penalties.
Impact of GSTR-1 on Other GST Returns
GSTR-1 plays a pivotal role in the overall GST compliance structure. The information declared in GSTR-1 feeds into GSTR-2A/2B of the recipient and must be matched for ITC claims. It also has to be reconciled with GSTR-3B, where the actual tax is paid. Any mismatch between GSTR-1 and GSTR-3B may lead to notices or scrutiny by the tax department. Thus, careful and consistent filing is essential to maintain GST compliance and avoid regulatory issues.
Conclusion
GSTR-1 is a critical monthly or quarterly return that captures the details of all outward supplies made by a registered taxpayer under GST. Understanding the structure, filing process, due dates, and consequences of errors or delays is essential for every GST-registered business. With the growing importance of timely compliance and ITC matching, businesses must establish robust systems and checks to ensure accurate and prompt GSTR-1 filing. Maintaining proper records and staying updated with GST law amendments are also necessary for long-term compliance and efficiency.