All you should know about GSTR 1

GSTR-1 is a monthly return that summarizes all sales (outward supplies) of a taxpayer.

In this article, we discuss the following topics in detail:

  1. Basics of GSTR-1
    1. What is GSTR-1?
    2. When is GSTR-1 due?
    3. Who should file GSTR-1?
    4. How to revise GSTR-1?
    5. Late Fees and Penalty
  2. How to file GSTR-1 on ClearTax GST Software?
  3. General queries on GSTR-1

1. Basics of GSTR-1

A. What is GSTR-1?

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales.

The return has a total of 13 sections.


B. When is GSTR-1 due?

The due dates for GSTR-1 are based on your turnover. Until March 2018 the due dates for the return has been notified.

Businesses with sales of up to Rs. 1.5 crore will file quarterly returns.

Other taxpayers with sales above Rs. 1.5 crore have to file monthly return.

Here are the due dates for the return until March  2018.



If your turnover is greater than Rs. 1.5 crore a return should be filed for every month. This means that 4 returns have to be filed for each month July, August, September, and October.


C. Who should file GSTR-1?

Every registered person is required to file GSTR-1 irrespective of whether there are any transactions during the month or not.

The following registered persons are exempt from filing the return:

  • Input Service Distributors
  • Composition Dealers
  • Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)
  • Non-resident taxable person
  • Taxpayer liable to collect TCS
  • Taxpayer liable to deduct TDS

D. How to revise GSTR-1?

Return once filed cannot be revised. Any mistake made in the return can be rectified in the next periods (month/quarter) return. It means that if a mistake is made in September GSTR-1, rectification for the same can be made in October’s GSTR-1.

E. Late Fees and Penalty

Late Fees for not filing GSTR-1 is Rs. 200 per day of delay (Rs. 100 as per CGST Act and Rs. 100 as per SGST Act. The late fees will be charged from the date after the due date.


Latest Update: The late fees have been reduced to Rs. 50 per day and Rs 20 per day (for nil return)

Ultimate Guide to eliminate challenges in filing GSTR-2

GSTR-1 filing related activities are completed and the filing GSTR-2 is in process.

The last date for filing GSTR-2 is now 30th Nov. 2017. The magnitude of work involved in GSTR 2 is not as simple as it may seem. Perhaps it requires more attention to get the numbers right for correct input credit.

The magnitude of impact on suppliers, business owners & even GSTP’s is major.

If you are a business owner, GSTR- 2 impact

Then probably one of your biggest worry is whether you’ll be able to claim all your rightful Input Tax Credit? You want to ensure that your GSTR-2 return does not get rejected in the GSTN portal.

If you are a supplier, GSTR- 2 impact

Then you have to be careful during filing of GSTR 1, as any wrong entry here can lead to the passing of credit to the wrong person & then further litigation issues.

Even GSTP’s

They have to be very watchful while uploading these files for clients when multiple invoices get modified in the invoice matching process.

How does one update the books with the new details? This can be boggling when there are hundreds of invoices.

We believe in all these cases; solutions which are most reliable are:

  1. Overview of the work by a Chartered Accountant (GST Expert).
  2. Accounting software solutions like Tally version 6.2
  3. Outsourcing the job to Accounting firms.

After GSTR 1, you are obviously wondering how to file GSTR-2 returns for all your clients quickly and correctly?

In this blog post, we will understand the challenges involved in filing GSTR-2 and how these could be met with the following solution:

  1. Overview of the work by a Chartered Accountant.
  2. Accounting software solutions like Tally version 6.2
  3. Outsourcing the job to Accounting firms. 

Invoice Reconciliation is Central to GSTR-2

In the earlier VAT regime, businesses used to file self-assessed returns to get their Input Tax Credit.

However, in the current GST regime, businesses will get Input Tax Credit based on invoices uploaded by their suppliers.
Thereby, it is now imperative for both the buyer and the supplier to reconcile invoices together. This process is a central prerequisite for filing GSTR-2 returns.
For a buyer, the GSTN portal auto-populates GSTR-2 with invoices reported by the supplier. The buyer is required to cross-check these details with his books and confirm their correctness, before submitting his GSTR-2.

Simple, isn’t? Let us understand why this simple-sounding process is beset with a certain degree of complexities.

Challenges in Filing GSTR-2 Returns

  1. The GSTN portal auto-populates a read-only GSTR-2A form with invoice entries made by suppliers. These invoices don’t necessarily come arranged in the same order as maintained in the buyer’s books. The buyer has to go through each line item to check for correctness before accepting the invoices. For invoices that don’t match, they have to manually reconcile the details with the suppliers.
  2. Suppliers may forget to upload or report some invoices. The buyer will need to alert his client who in turn will need time to understand the reason for such lapses and check whether the supplier can report such invoices? What if the supplier does not agree to these changes?
  3. Some suppliers may have under or over-reported the invoices. Again, it will take time for both the buying dealer and the supplier to arrive at a consensus.
  4. Some invoices uploaded by the supplier may not reflect in GSTR-2A since they might be in transit. Which buyer has considered as input while filing GSTR 1.
  5. The buyer has to accept right invoices only before submitting the GSTR-2. Accepting the wrong invoice can lead to possibilities of litigation due to no provision of revision.

 Solutions for GSTR-2 Filing

To mitigate the risk absolutely, following solution should be used:

  1. Overview of the work by an independent Chartered Accountant once the business accountant has complete.
  2. Accounting software solutions like Tally version 6.2 are seamless.


Business owners need these services that can complete 100% vouching before uploading the data on GST portal. Using their services ensures:

  1. Simplifies the process of invoice matching
  2. Enables quick reconciliation of discrepancy in invoices
  3. Empowers business owners to make the right decisions
  4. Ensures GST compliance
  5. Saves time and reduces business team effort.


How to file GSTR-2 returns

Expenses excluded for Input Tax Credit in GST

Though input tax credit can be claimed by a person registered under GST for most inputs, some services are not eligible for input tax credit claim. After almost four months post GST businesses are still trying to understand the changes required in their current systems to accommodate with new compliance model.

We all are doing the analysis to understand its overall impact. On this note, we bring to you our impact analysis on those expenses which are not allowed for GST Input credit and what outcome one should draw from it.

In this article, we look at such services, which are not eligible for input tax credit under GST.

Here is the list of items excluded from input tax credit claim under GST:

Motor Vehicle and Conveyances

Input tax credit can be claimed for motor vehicles or conveyance only when they are used for

  • Making a further supply of such vehicles, Conveyances (For exampleMaruti ,Honda car manufacturers).
  • Transportation of passengers (For example Companies giving vehicles on lease to Ola, Uber, Travel agencies owning the vehicles).
  • Imparting training (Motor driving schools).
  • Transportation of goods (GTA like GATI, INTERIM, BLUE DART).

Therefore companies other than above, cannot claim GST credit of expenses incurred in the purchase of Motor Vehicle. Also, this brings us to consult with our tax advisors on treatment of input credit under following categories

    • Maintenance expenses for office vehicles
    • Conveyance expenses for employees
    • Logistic expenses incurred in transportation of goods.

Food, Beverages and Outdoor Catering

GST Input credit can be claimed for food, beverages only by such registered person who is engaged in the business of

  • Restaurant services
  • Food and catering services
  • Hotels

Therefore regular taxpayers i.e. companies other than above, cannot claim GST credit of expenses relating to food, beverages, and catering incurred during Staff welfare, festivals, Canteen service, Business meetings.

This tells us to consult with our tax advisors on the treatment of input credit for food platforms like Food panda, Zomato, and other online food chains.

However from 1st Nov the GST levy on AC & Non AC Restaurants coming down to 5%, the restaurants will not be able to take the benefits of ITC.

Membership of a club, health and fitness center

In most of the Multinational companies, large size Indian companies generally following expenses are offered to employees:

  • Beauty treatment
  • Health services
  • Cosmetics
  • Medicines.

These expenses are also out of the purview of claiming GST Input credit even if it is given as gifts up to 50,000 for the regular taxpayer.

Life and Health Insurance

The policy holders who have taken general insurance (includes fire, marine, car, theft, etc.) can enjoy GST Input credit paid on the policy premium.However, the premium paid for health and life insurance will not be allowed for GST input credit.

Travel Benefit for Employees

The travel benefits extended to employees on vocation such as leave or home travel concession cannot be claimed for GST input credit.


We believe it is imperative for the companies to make the necessary operational and financial changes for accommodating the above cases of ineligibility of ITC. In our next edition of the blog, we will discuss some more such expenses in detail.

This leaves us all with a question, what do I need to discuss with my accountants and tax consultants on the requirement to re-structure my business process?


Ineligible input credit under CGST Act.



What are e-Way bills in GST & How are they going to make business easy ?

e-Way bills is the relaplacement of all the transportation bills like DS-T2 under VAT which were there in existing scenario.


The submission of way bill known as T2 form on line has to be done with the mutual coordination of the buyer and the seller. It is the buying registered dealer who has to use his user id to open the form from the web site,take the necessary information from the selling dealer and fill it. After filling the T2 completely the same has to be forwarded to the selling dealer,who has to carry a copy of it along with the vehicle carrying such interstate purchased goods. A consignment being received without T2 creates more problem to the buying dealer. Further such non issuance creates problem in creation of C forms.


The way bills obtained in the current VAT is notoriously used by VAT Authorities for restricting movement of goods across states.

Under GST there will be a free flow movement of goods, physical verification of the consignment can be done if there is any specific information relating to tax evasion or any other malpractice. Otherwise goods once verified can continue unimpeded through the rest of the journey.

Verifying officer needs to submit summary of inspection within 3 days of  verifying a consignment.

Transporters will have the right to upload queries on the GSTN portal if their vehicle is detained for more than 30 minutes without valid reason.

However one major challenge which has to be planned well on time in GST is strict timelines for validity of e-way bills. The validity has been calculated according to the distance travelled.

Valid for                     Distance

1 day                         Less than 100 km

3 days                      100 kms to 300 kms

5 days                      300 kms to 500 kms

10 days                    500 kms to 1000 kms

15 days                   1000 kms or more

What has to be watched for is that looking to the current state of road infra in some parts of India where both urban & rural area fall,  are these timelines possible to meet or not ?


Therefore business will now be able to access these goods without much interferance of VAT authorities because of free flow movement of goods & making ways bills totally digital & seamless in GST.

References bill in GST bill in GST

Stock Transfer in GST to branches & it’s impact on SMB Business

Impact on Working Capital due to Taxation on Stock Transfer for branches

Stock Transfer in GST is a Boon or Bane? This question appears because it has both the legs & we believe that it has boon’s superceding banes. Here is our analysis.

In Current Scenario

  1. In the current regime Stock transfer to the branches was allowed without any VAT tax payment, based on issuance of stock transfer form known as “Form F” issued by the recipient to the source branch. The purpose of the form was that the transfer is not sale. Hence later at the time of sale of such goods there was taxability where CST was a cost & leading to cascading impact.
  2. Usually stock transfers are movement of goodsto another unit of branch. These are done without any consideration but the complexity arises at which value the tax should be paid. Under excise the excise duty was paid on the cost of manufacturing the goods & no VAT due to no tax on stock transfer.

In GST Scenario

  1. In the GST regime stock transfer is essentially free as there will be no additional cost of CST because of tax credit allowed in any state movement. However the only challenge for business would be of working capital required in excess of the tax liability that arises at the time of stock transfer to branches which has to be paid at the time of transfer & the Input tax credit of the same will be allowed only once stock gets liquidated. Therefore we believe the only challenge here for business is to arrange for ADITIONAL WORKING CAPITAL REQUIREMENT at the time of stock transfer.
  2. In GST, transaction value is broadly considered as the value on which GST is levied. However in case of stock transfer to branches there will be no consideration & accordingly no transation value. Therefore the challenge which is needs clarity in GST is that at what value tax should be paid on Stock Transfer to branches.


Though stock transfers are taxable under GST, the tax is fully allowed as credit. This will eradicate the cascading effect which exists under current regime and as a result, products will be more cost effective. Although this is bound to create crunch in effective working capital, effective planning of branches can reduce the impact on working capital. Therefore such provisions are prompting business to think logically & plan there branches based on demand.