One of the key types of taxation returns in India is GSTR-6. GSTR-6 primarily focuses on the input tax credit (ITC) management for Input Service Distributors (ISDs).
Whether you are an ISD or simply seeking knowledge about GST compliance is a must. And having information about GSTR 6 will help you streamline the tax collection and credit management process.
In this article, we delve into the complexities of GSTR-6, providing a comprehensive understanding of its return filing process, format, eligibility criteria, and key associated rules.
What Is GSTR 6?
GSTR-6, the Goods and Services Tax Return 6, is a monthly filing requirement designed for organizations acting as Input Service Distributors (ISDs).
This crucial document serves as a comprehensive statement, mandating the inclusion of vital information related to the inward supplies received or purchases made from registered taxpayers. Table 6 of GSTR 9 is concerned with the reporting of Inward Supplies and ITC.
It also necessitates the disclosure of precise details concerning the distribution of input tax credits among the organization's branches.
By adhering to the guidelines outlined in GSTR-6, organizations can ensure accurate record-keeping and efficient management of their input tax credit distribution.
Which GSTR 6 Features Should You Know About?
Here are some of the features of GSTR 6:
- GSTR 6 is a mandatory filing requirement for every registered Input Service Distributor (ISD) operating under the Goods and Services Tax (GST) regime.
- The deadline for filing GSTR 6 falls on the 13th of the subsequent month, requiring timely submission to meet compliance obligations.
- Taxpayers are obligated to provide comprehensive information regarding tax invoices on which they have received credit, ensuring accurate reporting of input tax credit (ITC) transactions.
GSTR 6 - Who Has to File It?
GSTR 6 filing is mandatory for Input Service Distributors (ISDs), with certain exclusions as follows:
- The requirement to file GSTR 6 does not apply to businesses classified as Composition Dealers.
- Taxpayers who are liable to collect Tax Collected at Source (TCS) are also exempt from filing GSTR 6.
- Similarly, taxpayers responsible for deducting Tax Deducted at Source (TDS) are not required to file GSTR 6.
- Online Information and Database Access or Retrieval (OIDAR) service suppliers are excluded from the obligation to file GSTR 6.
- Compounding taxable persons, who opt for a simplified taxation scheme, are also not mandated to file GSTR 6.
- Lastly, non-resident taxable persons are not required to file GSTR 6.
What Is an Input Service Distributor?
An Input Service Distributor (ISD) links manufacturers with final product producers. As per Rule 2(m) of the Cenvat Credit Rules, 2004, an ISD is recognized as the office of the supplier of goods and/or services.
It receives tax invoices about the input services obtained and, subsequently, distributes the credit of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).
It also distributes Integrated Goods and Services Tax (IGST) to suppliers of goods or services who share the same Permanent Account Number (PAN) as the office mentioned earlier.
The ISD issues relevant documents or invoices to distribute the credit. Within GSTR-6, an ISD is required to furnish details regarding the distribution of credits.
How to File GSTR 6 Return?
Here is how you can step-by-step file a GSTR 6 return:
- GSTIN: Provide your unique 15-digit Goods and Services Taxpayer Identification Number (GSTIN) based on your PAN.
- Name of the Taxpayer: Enter the registered name of your business.
- Period: Specify the filing period, indicating the month and year for which you are submitting GSTR-6.
- Supplies From Registered Taxable Persons: Declare the purchases made from other GST-registered businesses, including the amount of input credit or tax refund against different tax heads (CGST, SGST, and IGST). This section also covers purchases subject to reverse charge. The data in this section is auto-generated based on the vendors' filings in GSTR-1 or GSTR-5 (for foreign taxpayers). Additionally, provide invoice-level information for purchases with multiple deliveries. Amendments to earlier tax period purchases can be made using Section 4A, accompanied by original and modified invoices.
- Details of Credit/Debit Notes: Report credit and debit notes issued for transactions during the filing month. Amendments to debit/credit notes from previous tax periods can be made using Section 5A.
- Input Service Distribution: Provide details of branches that receive input credit, including their respective GSTINs, and the amount of ISD credit distributed under different GST components. Amendments to the distributed credit in earlier tax periods can be made using Section 6A, supported by original and modified transaction proofs.
- ISD Ledger: ITC distribution between the head office and branches is recorded in this section. It tracks Input Tax Credit Received, Input Tax Credit reverted, and Input Tax Credit distributed, categorized under SGST, CGST, and IGST components.
Once all sections of GSTR-6 are completed, electronically declare the document's accuracy and sign it as per the prescribed method.
By adhering to this concise and structured GSTR 6 format, businesses can ensure comprehensive ITC and inward supplies reporting, promoting GST compliance.
General Queries on GSTR 6 Form
Here are some general queries related to GSTR 6 form:
1. What is the GSTR 6 form?
The GSTR-6 form is a return that must be filed under India's Goods and Services Tax (GST) system. It is specifically designed for Input Service Distributors (ISDs) who play a crucial role in facilitating the distribution of input tax credit (ITC) among different branches or units of a company. The purpose of the GSTR-6 form is to capture and report the details of the input tax credit received by the ISD and the distribution of that credit to its branches or units.
2. How do I file the ISD return if my counterparties haven't filed Form GSTR-1/5?
In the context of filing the GSTR-6 return, one must note that one can proceed with the filing process even if their counterparties have not yet filed their Form GSTR-1 or Form GSTR-5. This flexibility allows the filer to fulfill compliance obligations by utilizing the "ADD MISSING INVOICE" functionality.
3. What is the difference between GSTR-5 and GSTR-6?
The main difference between GSTR-5 and GSTR-6 lies in their applicability and the entities required to file them under India's Goods and Services Tax (GST) system. GSTR-5 is specifically designed for Non-Resident Foreign Taxpayers who supply goods or services in India but are not country residents. It captures details of supplies made by non-resident taxpayers and the tax liability associated with those supplies.
On the other hand, GSTR-6 is filed by Input Service Distributors (ISDs). ISDs act as intermediaries between the suppliers of goods/services and their branches or units. GSTR-6 focuses on the distribution of input tax credit (ITC) by ISD to their branches or units and requires reporting details related to input tax credit distribution.
4. Can I download the GSTR 6 form in PDF?
You can download the GSTR-6 form in PDF format from the official Goods and Services Tax (GST) portal. The PDF version of the GSTR-6 form can be accessed and downloaded for offline reference and filling purposes. Simply visit the GST portal, navigate to the downloads section, and select the GSTR-6 form to download it in PDF format. Ensure you have the software or application to view and fill PDF forms on your device.
5. What is Table 6 of GSTR-9
Table 6 of GSTR-9 is a section in the annual return form under India's Goods and Services Tax (GST) system. It pertains to reconciling input tax credit (ITC) declared in the financial statements with the ITC per the GSTR-2A auto-populated data.
In this table, taxpayers need to provide the details of the ITC as per audited annual financial statements for the financial year and the ITC as per GSTR-2A. The purpose of Table 6 is to ensure the reconciliation of the ITC claimed in the financial statements with the ITC available as per the auto-populated data in GSTR-2A.
When to File GSTR-6?
The GSTR-6 form can be filed once the corresponding month has concluded. It is important to note that the deadline for filing this return is before the 13th of the subsequent month.
For instance, if you are filing the GSTR-6 for March 2020, it must be submitted before the 13th of April 2020. Ensuring timely submission of the GSTR-6 allows businesses to fulfill their compliance obligations and maintain a smooth flow of input tax credits.
The GSTR 6 due date for June 2023 is on the 13th of July 2023.
Prerequisites for Filing GSTR-6
To file the GSTR-6, the following conditions must be met:
- You must be a registered taxpayer under the Goods and Services Tax (GST) with a 15-digit PAN-based GSTIN.
- Your business's aggregate turnover should exceed 20 lakh rupees.
- GSTR-6 applies to all registered Input Service Distributors (ISDs) under GST who have not opted for the composition scheme and do not possess a Unique Identification Number (UIN). It does not apply to non-resident taxpayers.
- ISDs and head offices are required to keep detailed records of all taxable purchases made on behalf of their branches and establishments.
- To ensure compliance, it is important to accurately allocate the input tax credit obtained from purchases among different branches of an organization by means of internal transactions between the main office and its subsidiaries.
GSTR-6 Form Filling Made Easy With TranZact
The GSTR-6 form serves as a means to report and distribute input tax credits (ITC) among branches or units of an organization.
It is important to stay updated with any changes or amendments in the rules and format of GSTR-6 to ensure smooth and efficient filing processes.
TranZact helps businesses with the same by ensuring they can create and record GST-compliant documents effortlessly. It helps them to effectively manage their tax obligations and contribute to a streamlined GST ecosystem.
FAQs on GSTR-6
1. Who needs to file GSTR-6?
GSTR-6 must be filed by Input Service Distributors (ISDs) who act as intermediaries between suppliers and their branches/units.
2. What is the due date for filing GSTR-6?
The GSTR-6 return must be filed before or on the 13th of the succeeding month following the tax period.
3. What information is required in GSTR-6?
GSTR-6 requires details of inward supplies received from registered taxpayers, along with the distribution of input tax credit (ITC) among branches/units.
4. What is the turnover limit of GSTR-6?
The aggregate turnover limit for your business for GSTR-6 should be 20 Lakhs.
5. What are the different modes of signing GSTR-6?
The GSTR-6 form can be signed through a digital signature or electronic verification code.
6. What happens if GSTR-6 is not filed?
Failure to file GSTR-6 within the due date may incur penalties and consequences per the GST laws. It is important to comply with the filing requirements to avoid any issues.
7. Can the GSTR-6 filing date be extended?
Yes, GSTR-6 form-filling dates can be extended upon the government's decision.
8. Is there any late fee applicable if the GSTR-6 form is not submitted on time?
Yes, there is a late fee upon late submission of the GSTR-6 form.
