Following would be the three return forms for the normal tax payers to be filed monthly. These three return form are the mainstay for entire return filing scheme in GST
1. GSTR-1:- Outward supplies made by taxpayer i.e.- Supply of goods and Services during the last Month
2. GSTR 2:- Inward supplies received by a taxpayer i.e. Purchases of goods or Services received during the Last Month
3. GSTR 3:- Monthly return:- Combined return involving Consolidation of the details of outward and inward supplies and details of Tax Liability and Tax Deposit
GST is a Taxation Structure wherein dealer has to self-assess his tax liability and thereafter has to discharge his tax liability. Self-Assessment can be proper only when the system is robust enough to enable a dealer in assessing his tax liability. The system should have an inherent internal check and should build an internal trail in the system which would highlight any inconsistency in the self-assessment of the liability by the dealer. The system should not be prone to alterations and should cover all transactions which would be the part of the B2B Transactions up-until the transaction of B2C.
The GST-Return forms emphasize the very same fact. It has been developed upon auto-population or direct matching of the resulting document from the base document. The very fact stems from the principle that every transaction has an origin and the details flowing out of the origin should be auto-populated in all the subsequent documents to which it affects so that a trail is created and once the trail is created by the seller, then the purchaser would have to treat the same as part of the inward supplies and so on and vice-versa. For Eg. If a person has entered into the transaction of supply of goods, then there must be someone who has purchased the goods. The seller of the goods is the origin point of the transaction and he should specify in the return that he has sold the goods to the purchaser and the return of the purchaser should get auto-populated with the purchase details which he has to compulsorily show in the return.. This is what is called GSTR-1.
Once the seller conforms the same and the details are auto-populated and communicated to the purchaser then the resultant or the purchaser should conform the details filled by the seller and if he agrees to the same, the transaction is freeze and if he disagrees then the seller has the option to modify his document as per the request of the buyer or keep the same as it is. If seller has not entered the details of the purchaser and the supplies, purchaser has the option to enter the purchase details in his inward supply statement manually alongwith the details of seller which seller will have to confirm through acceptance and rejection. This is what is GSTR-2.
GSTR-3 would the consolidated monthly return for contain details of monthly supplies and purchases and assessing net liability and tax paid. It would be auto-populated through GSTR-1 and GSTR-2 of the supplier and with the Cash Ledger, ITC Ledger and Tax Ledger of Taxpayer maintained on a real time basis by the GST Network. I would dwell upon the three documents in my next updates. This is what is GSTR-3 prepared with minimal of manual intervention and through auto-population from the origin documents.
Therefore, Entire Mechanism of GST Returns has been developed to have minimum manual intervention and the system updating the records of the inward i.e. purchaser and outward supplier i.e. seller and resultant documents being prepared from the source documents.