In order to accommodate new changes in the law and new disclosure requirements, the present GSTR-3B may see some changes soon, as specifically mentioned in the press release of the 47th council meeting. A revised GSTR-3B form may be put up in the public forum for comments and suggestions. However, seeing that the process to revamp GSTR-3B may be tedious and time-consuming, some changes in the Form have been introduced w.e.f 5th July 2022 vide NN 14/2022-CT along with clarity provided through Circular No. 170/02/2022-GST dated 6th July 2022. We discuss below, two very important changes and clarifications issued in this matter w.r.t. outward supplies.
Addition of Table 3.1.1 - Details of Supplies notified under section 9(5) of the CGST Act, 2017 and corresponding provisions in IGST/UTGST/SGST Acts
A much-required relief to the Electronic Commerce operators ("ECOs") has been provided by way of amending Form GSTR-3B to include a specific table 3.1.1 i.e., "Details of Supplies notified under section 9(5) of the CGST Act, 2017 and corresponding provisions in IGST/UTGST/SGST Acts"
Various services such as transportation of passengers through various modes of motor vehicles, housekeeping services, accommodation services and restaurant services had been notified under Section 9(5) of the CGST Act 2017 till date, putting the onus on the ECOs to pay tax on such services supplied through them. However, Form GSTR-3B was not equipped to allow the registered suppliers as well the ECOs to properly disclose these transactions.
Amidst Form GSTR 3B reporting confusion, previously, Circular No. 167/23/2021-GST dated 17.12.2021 was issued to clarify that the ECOs may report such supplies provided through them as outward taxable supplies in Table 3.1(a). Additionally, ECOs may also furnish the details of such supplies in Table 7A(1) or Table 4A of GSTR-1, as the case maybe, for accounting purpose. Treatment to be followed by the restaurant service provider was also clarified where they were instructed to disclose such supplies in Table 8 (exempt, nil and non-GST supplies) in GSTR-1 and correspondingly disclose the same in Table 3.1(c) of GSTR-3B.
Now through Circular 170, amendment in Form GSTR-3B has been done to allow ECOs and suppliers supplying through such ECO platforms to disclose the Turnover liable to Tax under section 9(5) in a separate table i.e., Table 3.1.1
The salient features of the amendment are -
- It has been clarified that Details of Supplies notified under section 9(5) of the CGST Act, 2017 are not to be disclosed in Table 3.1 of GSTR-3B
- Specific Table 3.1.1 has been introduced in GSTR-3B to disclose such supplies.
- Table 3.1.1(i) is relevant for the ECO. Supplies made by registered persons on respective ECO’s platform and where ECO is liable to pay tax are to be disclosed in this table. It is likely that taxes disclosed in this table would be added to the output tax liability of the ECO in order to discharge the tax.
- Table 3.1.1(ii) is relevant for suppliers of goods or services. All supplies made by the respective registered person on any ECO’s platform, where the ECO is responsible to discharge the tax liability are to be reported here. As the registered person is not liable to discharge any tax on such supplies, these amounts will likely not be added to the output tax liability of the registered person.
With this, the haphazard manner in which industry was forced to disclose the supplies covered under Section 9(5) of the CGST Act comes to an end and the disclosure to be made by the ECOs and corresponding suppliers have been streamlined to put an end to all the confusion and misreporting being done due to lack of appropriate fields.
What is to be done by the ECO
Reporting of such supplies is no longer required to be made in Table 3.1a (taxable outward supplies). Care must be exercised to ensure that these supplies are specifically reported in Table 3.1.1 (i) only and are omitted from Table 3.1(a). An ECO would further be required to disclose these supplies in Table 3.2 (Supplies to unregistered persons) for settlement of fund between Center and State.
What is to be done by the registered person supplying through ECO
Reporting of such supplies is no longer required to be made in Table 3.1.c (Exempt, Nil rated and Non-GST outward supplies). Disclosure is to be made only in Table 3.1.1 (ii). It is to be noted that these supplies are not to be reported by the registered persons in Table 3.2, as it would be directly reported by the ECO in their GSTR-3B.
GSTR 1 disclosure- For suppliers through ECO remains unclear. Ideally, suggest to disclose under exempt supply (table 8) in GSTR 1, and manually edit details in GSTR 3B from table 3.1.c to 3.1.1(ii). Clarification from department may be expected.
Reporting figures in Table 3.2 - Of the supplies shown in 3.1(a) and 3.1.1(i) above, details of inter-State supplies made to unregistered persons, composition taxable persons and UIN holders
Emphasis has again been made on disclosure of proper figures in Table 3.2 of GSTR-3B i.e., inter-State supplies made to unregistered persons, composition taxable persons and UIN holders to ensure correct accounting and accurate settlement of funds between the State and the central government.
Clarity has again been given that irrespective of the disclosure of such supplies in Table 3.1, they are again to be reported in Table 3.2 as this is the basis of settlement of funds between Center and State. This is on account of transactions wherein the tax is a cost to the recipient and therefore a Revenue to the Center/State
From the taxpayer perspective, there is little or no difference if the information in Table 3.2 is not furnished. Tax payable is linked to Table 3.1 with Table 3.2 merely being disclosure of additional information. Further, supplies to unregistered persons are already being disclosed in GSTR-1in B2C supplies table and is being auto populated in GSTR-3B from this table.
What is to be done by the taxpayer
It is to be ensured that disclosure in Table 3.2 is not missed. As these details are already auto-populated from information furnished in GSTR-1, the taxpayer is required to only validate these details and proceed for filing of returns. Nevertheless, the details are of utmost importance to the Government for settlement of funds and cannot be omitted from GSTR-3B disclosure.
Further, care must be given to ensure that any amendments made in GSTR-1 w.r.t these fields may also be given appropriate effect in GSTR-3B. For ease of taxpayer, amendments made in GSTR-1 are also auto populated in GSTR-3B with breakup of same available in the System generated GSTR-3B.
The views expressed are strictly personal and meant for educational purposes. We are not soliciting any work.
The authors can also be reached at akshay@hiregange.com or nikita@hiregange.com
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