Filing GSTR 3B to be easy as system to compute ITC availability, tax liability

Filing GST monthly return for over one crore assessees will be easier from this month as the GSTN (GST Network or IT backbone of the indirect tax system) has deployed two major functionalities.

There are over 1.20 crore assessees, out of which 17 lakh have opted Composition Scheme and they need to file return on quarterly basis. Remaining 1.03 crore assessees need to file form GSTR 3B on monthly basis which basically show how much tax has actually been paid after deducting Input Tax Credit (ITC). There have been some issues on calculation of ITC availability and tax calculation which result in dispute and also tax evasion.

Now, GSTN says, system will compute liability and ITC availability for the filer. For the computation of liability, just after the filing monthly GSTR-1, the outward supply statement, the system will compute liabilities along with the break-up and will make it available as a PDF document on the GSTR-3B dashboard of the taxpayer. This data can be used for filing of GSTR-3B for August 2020 and onward after reconciliation. Currently, this facility is available for monthly GSTR-1 filers. For quarterly filers of GSTR-1, this functionality will come in next few months.

Auto-draft statement

The systems will auto-draft ITC statement. Here the system will auto-generate the invoice-wise ITC statement based on information furnished by the suppliers of the taxpayer. It essentially means that the taxpayer can know how much ITC is available for the month. A new form GSTR-2B has been launched for this purpose which is, unlike GSTR-2Aa static statement and will be made available for each month on the 12th day of the succeeding month.

The linking of returns is expected to give GSTN a big edge in curbing under-reporting of liability and over-reporting of ITC which has been a major concern for the Government. Once taxpayers get used to these two statements, the data from them will start automatically start flowing into GSTR-3B. In other words, GSTN will auto-populate the GSTR-3B return of the taxpayers.