How to file returns under GST?

Filing GST returns online is the statutory procedure through which registered businesses report their outward sales, claim eligible input tax credits, and pay net tax liabilities to the government. This process is conducted electronically on the official Goods and Services Tax Network portal using either direct web entry, offline preparation tools, or integrated accounting software.

Key Prerequisites for Online GST Return Filing

Before starting the filing workflow on the GST portal, taxpayers should assemble all required accounting records, financial registers, and authorization tools:

• Active GSTIN and Login Credentials: A valid 15-digit GST identification number, username, and active password for the official GST portal.
• Digital Authentication Mechanism: A valid Digital Signature Certificate (DSC) for companies and limited liability partnerships, or an Electronic Verification Code (EVC) linked to an Aadhaar-registered mobile number for sole proprietorships.
• Reconciled Financial Statements: Complete sales registers, purchase registers with invoice-level breakdowns, and verified ITC records.
• GSTR-2B Statement Download: The auto-generated static input tax credit statement reflecting eligible credits for the tax period.
• Bank and Cash Ledger Balances: Verified electronic cash and credit ledger balances on the portal to plan tax discharge payments.

Step-by-Step Procedure for Filing GSTR-1 (Outward Supplies)

GSTR-1 reports all outward supplies of goods and services made during the tax period. Taxpayers must complete this filing through the following sequence:

Step 1: Access the Returns Dashboard

Log in to the GST portal, navigate to Services > Returns > Returns Dashboard, select the appropriate Financial Year and Return Filing Period, and click Search.

Step 2: Enter Sales Invoices in GSTR-1

Select the GSTR-1 tile and click Prepare Online. Enter transactions into the relevant tables:

• Table 4A, 4B, 4C, 6B, 6C (B2B Invoices): Add individual invoice details for registered buyers, including GSTIN, invoice number, invoice date, taxable value, and tax rate breakdown.
• Table 5A, 5B (B2C Large Invoices): Enter interstate sales to unregistered individuals where invoice value exceeds the statutory threshold.
• Table 6A (Exports): Enter export invoices indicating if supplies were made with payment of tax or under Letter of Undertaking (LUT).
• Table 7 (B2C Others): Enter state-wise consolidated summary data for intrastate and small interstate sales to unregistered customers.
• Table 8 (Nil Rated, Exempted, Non-GST Supplies): Report values of outward supplies exempt from GST or outside the scope of indirect taxation.
• Table 9B (Credit and Debit Notes): Report credit notes and debit notes issued against registered and unregistered supplies.
• Table 11 (Advances Received and Adjusted): Detail gross advances received for future supplies and adjustments made against invoices issued during the period.
• Table 12 (HSN Summary): Provide mandatory HSN-wise or SAC-wise summary of outward supplies, reporting minimum 4-digit or 6-digit codes based on turnover.
• Table 13 (Documents Issued): Detail serial numbers of tax invoices, delivery challans, receipt vouchers, and credit notes issued during the month.

Step 3: Generate Summary and File GSTR-1

Click Generate GSTR-1 Summary, review the draft preview for arithmetic accuracy, select the declaration checkbox, and submit the return using either DSC or EVC authentication.

Step-by-Step Procedure for Filing GSTR-3B (Summary Return and Tax Payment)

GSTR-3B is the summary return where final tax liabilities are settled. Follow these steps to complete the return:

Step 1: Open GSTR-3B on the Portal

Return to the dashboard, select the tax period, and open the GSTR-3B tile by clicking Prepare Online.

Step 2: Review Auto-Populated Tax Liabilities and Input Tax Credit

The portal auto-populates outward liabilities from your filed GSTR-1 (Table 3.1) and eligible input tax credit from GSTR-2B (Table 4). Compare these auto-populated values with your internal books of accounts. Verify that ineligible credits, such as personal expenses or blocked credits under Section 17(5), are reversed in Table 4(B).

Step 3: Settle Liabilities and Discharge Tax Payment

Proceed to the tax payment screen. The portal will automatically utilize available electronic credit ledger balances against output CGST, SGST, and IGST liabilities per statutory set-off rules. If the credit balance is insufficient, generate a payment challan (PMT-06) to deposit the required cash through net banking, NEFT, or RTGS. Once funds appear in the electronic cash ledger, offset liabilities and click File GSTR-3B with DSC or EVC verification.

Filing Nil Returns and Special Schemes

If a registered taxpayer has no outward sales and no inward purchases during a tax period, filing a Nil return remains legally mandatory. Taxpayers can file Nil GSTR-1 and Nil GSTR-3B through a single-click verification on the portal or via SMS from their registered mobile number. Eligible small businesses can also register under the QRMP scheme to file quarterly returns while making monthly cash deposits.

Invoice Management System (IMS) and Input Credit Governance

Taxpayers should take advantage of the Invoice Management System (IMS) introduced on the GST portal. This mechanism allows recipient businesses to accept, reject, or keep pending any inward invoices uploaded by suppliers in their GSTR-1 or Invoice Furnishing Facility (IFF). By actively accepting valid invoices and rejecting inaccurate records in IMS, taxpayers ensure that auto-generated GSTR-2B statements reflect only verified purchases, preventing disputed input tax credit claims during departmental audits.

Common Mistakes to Avoid During Filing

Taxpayers should maintain careful controls during data entry. Frequent mistakes that trigger scrutiny notices include:

• Mismatch between GSTR-1 and GSTR-3B: Declaring lower turnover in GSTR-3B than reported in GSTR-1 leads to automated recovery notices under Section 75(12).
• Excess ITC Claims over GSTR-2B: Claiming input tax credits exceeding amounts reflected in GSTR-2B attracts automated system notices in Form DRC-01C.
• Incorrect Place of Supply: Misidentifying the recipient state leads to paying CGST/SGST instead of IGST, requiring cash settlement and subsequent refund applications.
• Failure to File Nil Returns: Neglecting Nil filings accumulates continuous daily late fees and causes portal blocking of E-Way Bills.

Coordinated Compliance for Business Entities

Managing periodic GST filings requires close integration with broader corporate compliance. For instance, businesses must coordinate their GST records when completing Annual Income Tax Returns Filling for LLP and when preparing documentation to File Your Tax Returns via the official Goods and Services Tax Portal.