What is GSTR-1?
GSTR-1 is a document that
businesses file every month or quarter to inform the government about the sales
they made and the tax they collected under the Goods and Services Tax
(GST) system in India.
Imagine you run a shop or a
business. Every time you sell something; you collect GST from the
customer. The government needs to know:
✅
How much you sold
✅
How much tax you collected
✅
Who you sold to
This information is reported in GSTR-1,
which helps the government track tax collection and ensures your customers (if
they are businesses) can claim tax credit (ITC) on their purchases.
Who Needs to File GSTR-1?
Every registered business under
GST must file GSTR-1, except:
❌
Small businesses under the Composition Scheme (they file a different
return).
Even if a business didn’t make
any sales in a month or quarter, it must still file a NIL GSTR-1 (a
return showing no transactions).
When to File GSTR-1? (Due Dates)
The filing deadline depends on business
size:
1️. Large Businesses (Turnover above ₹5 crore per year)
📌 File monthly by
the 11th of the next month.
👉
Example: If reporting sales for January 2025, you must file by 11th
February 2025.
2️. Small Businesses (Turnover up to ₹5 crore per year)
under QRMP Scheme
📌 File quarterly
by the 13th of the month after the quarter.
👉
Example: If reporting sales for January-March 2025, file by 13th
April 2025.
What Information is Reported in GSTR-1?
In simple terms, GSTR-1 is a
list of all sales made during a period.
1️. Sales to GST-registered
businesses (B2B Sales)
- You enter the buyer’s GSTIN (GST number).
- Mention invoice details, sale value, and tax
collected.
- The buyer can then claim Input Tax Credit (ITC).
2️. Sales to Unregistered
Customers (B2C Sales)
- No need to enter GSTIN (because the buyer is not
registered).
- Just mention total sales and GST charged.
3️. Exports and Zero-Rated
Sales
- If selling outside India, mention the country
and invoice details.
- Since exports are zero-rated, no GST is
charged.
4️. Debit and Credit Notes
- If you issued a refund, discount, or correction
on an earlier sale, enter it here.
How to File GSTR-1?
(Step-by-Step Guide)
✅ Step 1: Log in to the
GST Portal (www.gst.gov.in).
✅
Step 2: Go to the Returns Dashboard and select GSTR-1.
✅
Step 3: Enter details of all sales invoices, tax collected, and
adjustments.
✅
Step 4: Review everything carefully to avoid errors.
✅
Step 5: Click Submit and file using a Digital Signature (DSC)
or OTP (EVC).
After filing, your customers (who
are businesses) will see these sales in their GST returns and claim tax
credits.
Why is GSTR-1 Important?
🚀 Helps the government
track tax collection.
🚀
Ensures businesses can claim Input Tax Credit (ITC) on their purchases.
🚀
Builds trust with buyers, as they can claim ITC only if you file correctly.
🚀
Prevents legal trouble and penalties.
📌 If you don’t file
GSTR-1 on time, your customers may not get their ITC, which can harm your
business relationships.
Penalties for Late Filing of
GSTR-1
⏳ Late Fee:
- ₹50 per day (₹25 CGST + ₹25 SGST) if tax is due.
- ₹20 per day (₹10 CGST + ₹10 SGST) if filing a NIL
return.
⚠️ ITC Block for Buyers:
- If you don’t file GSTR-1, your buyers cannot claim
their Input Tax Credit (ITC), which may result in them stopping
business with you.
🚨 Government Action:
- Continuous non-filing can lead to cancellation
of GST registration.
Example to Understand GSTR-1
📌 Imagine you run a mobile
phone store and make the following sales in March 2025:
✅ Sale 1: You sell 100
mobile phones to a registered retailer in Mumbai (B2B sale) and
charge ₹1,00,000 GST.
✅
Sale 2: You sell 20 mobile phones to a customer in Delhi (B2C
sale) and collect ₹5,000 GST.
✅
Sale 3: You export 50 mobile phones to the USA, which is a zero-rated
sale (no GST).
👉 In GSTR-1, you
will enter:
- Buyer’s GSTIN for the Mumbai retailer and
invoice details.
- Total sales and GST collected for the Delhi
customer.
- Export invoice details for the USA sale (but
no GST).
After you file GSTR-1, the
Mumbai retailer can claim ₹1,00,000 as Input Tax Credit (ITC) when they
file their GST return.
Common Mistakes to Avoid in
GSTR-1
❌ Not filing on time –
Results in late fees and ITC issues.
❌
Wrong GSTIN for buyers – Can prevent them from claiming ITC.
❌
Forgetting to report debit/credit notes – Can cause mismatches in GST
records.
❌
Not reviewing before filing – Errors can lead to corrections later.
Example
of GSTR-1 Calculation with Tax Computation
Let’s take an example
to understand how GST is calculated and reported in GSTR-1.
📌 Business Details
- Business Name: ABC Electronics
- Business Type: Electronic Goods Supplier
- Location: Delhi
- GST Filing: Monthly
- Sales in March 2025: Various transactions
Transactions for March 2025
|
Invoice No. |
Buyer Type |
Buyer Location |
Sale Amount (₹) |
GST Rate (%) |
Tax Collected (₹) |
|
INV-001 |
B2B |
Mumbai, Maharashtra |
5,00,000 |
18% |
90,000 |
|
INV-002 |
B2C |
Delhi |
50,000 |
12% |
6,000 |
|
INV-003 |
Export |
USA |
1,00,000 |
0% (Zero-rated) |
0 |
|
INV-004 |
B2B |
Kolkata, West
Bengal |
2,00,000 |
18% |
36,000 |
|
INV-005 |
B2C |
Uttar Pradesh |
30,000 |
12% |
3,600 |
GST
Calculation Breakdown
1️. Business-to-Business (B2B)
Sales
For sales made to registered
businesses, we charge IGST (if inter-state) or CGST + SGST
(if intra-state).
|
Invoice No. |
Sale Amount (₹) |
GST Rate (%) |
IGST (₹) |
CGST (₹) |
SGST (₹) |
Total GST (₹) |
|
INV-001 (Mumbai) |
5,00,000 |
18% |
90,000 |
0 |
0 |
90,000 |
|
INV-004 (Kolkata) |
2,00,000 |
18% |
36,000 |
0 |
0 |
36,000 |
📌 Total IGST collected
from B2B sales = ₹90,000 + ₹36,000 = ₹1,26,000
2️. Business-to-Consumer
(B2C) Sales
For sales made to unregistered
customers, we charge CGST + SGST (if intra-state) or IGST (if
inter-state).
|
Invoice No. |
Sale Amount (₹) |
GST Rate (%) |
IGST (₹) |
CGST (₹) |
SGST (₹) |
Total GST (₹) |
|
INV-002 (Delhi) |
50,000 |
12% |
0 |
3,000 |
3,000 |
6,000 |
|
INV-005 (Uttar Pradesh) |
30,000 |
12% |
3,600 |
0 |
0 |
3,600 |
📌 Total GST collected
from B2C sales = ₹6,000 + ₹3,600 = ₹9,600
3️. Exports
(Zero-rated sales)
Since exports are zero-rated,
no GST is charged on them.
- Total exports = ₹1,00,000
- GST collected = ₹0
Total GST Collected in March 2025
|
Tax Type |
Amount (₹) |
|
IGST (Inter-State
Sales) |
₹1,26,000 |
|
CGST (Intra-State Sales) |
₹3,000 |
|
SGST (Intra-State
Sales) |
₹3,000 |
|
Total GST Collected |
₹1,32,600 |
Reporting in GSTR-1
When filing GSTR-1, ABC
Electronics will enter:
✅ B2B Sales (with GSTIN of
buyers)
- ₹5,00,000 to Mumbai (Maharashtra) – IGST ₹90,000
- ₹2,00,000 to Kolkata (West Bengal) – IGST ₹36,000
✅ B2C Sales (without GSTIN)
- ₹50,000 in Delhi – CGST ₹3,000 + SGST ₹3,000
- ₹30,000 to Uttar Pradesh – IGST ₹3,600
✅ Exports
- ₹1,00,000 to the USA – No GST (Zero-rated supply)
📌 Summary for GST Filing
|
Details |
Amount (₹) |
|
Total Sales
(Including Exports) |
₹8,80,000 |
|
Taxable Sales (Excluding Exports) |
₹7,80,000 |
|
IGST Payable |
₹1,26,000 |
|
CGST Payable |
₹3,000 |
|
SGST Payable |
₹3,000 |
|
Total GST Payable |
₹1,32,600 |
📌 Key Takeaways from the Example
✅ GSTR-1 includes all sales,
both taxable and zero-rated (exports).
✅
B2B sales require the buyer’s GSTIN to allow Input Tax Credit (ITC).
✅
B2C sales are reported without GSTIN, just total sales and GST collected.
✅
Exports are zero-rated, meaning no GST is charged.
✅
GST is collected based on inter-state (IGST) and intra-state (CGST+SGST)
rules.
Final Steps After
GSTR-1 Filing
1️. Once GSTR-1 is filed,
the sales details get auto-populated in the buyer’s GSTR-2A (if they are
registered).
2️. The buyer can claim Input Tax Credit (ITC) based on this data.
3️. The business must pay the collected GST while
filing GSTR-3B (the payment return).
Deductions Under GSTR-1
GSTR-1 is primarily used to report outward supplies (sales) of goods and services. However, there are certain cases where deductions or adjustments can be made while filing GSTR-1. Below are key deductions and adjustments allowed:
1. Amendments to Invoices (Reducing Sales Value)
If a business over-reports sales in a previous GSTR-1 filing, they can amend the invoice details in the subsequent GSTR-1 to correct the error. This effectively reduces the total taxable value.
Example:
- In January, a business reported a sale of ₹1,00,000 instead of ₹90,000.
- In the next GSTR-1 filing, they can amend the invoice to reduce the taxable amount by ₹10,000.
2. Credit Notes (Sales Returns or Discounts)
A business can issue credit notes to customers if:
- Goods are returned.
- Discounts are given after issuing the invoice.
- Tax was overcharged.
These credit notes must be reported in GSTR-1, reducing the taxable turnover.
Example:
- A seller invoices ₹50,000 worth of goods but later gives a discount of ₹5,000.
- A credit note for ₹5,000 is issued and reported in GSTR-1.
- The net taxable value becomes ₹45,000.
3. Exempt, Nil-Rated, and Non-GST Supplies
These categories are not taxed under GST and should be separately reported in GSTR-1. Since they do not attract GST, they act as deductions from taxable turnover.
Example:
- A business sells ₹2,00,000 worth of exempt goods (e.g., unprocessed agricultural products).
- This amount is excluded from GST calculations but still reported in GSTR-1.
4. Reversal of Sales (Cancelled Invoices)
If an invoice is issued but the sale is later canceled, the business must update GSTR-1 by reversing the transaction.
Example:
- A business invoices ₹1,20,000 to a customer but later cancels the order.
- This invoice should be deleted or adjusted in GSTR-1, reducing taxable sales.
Conclusion
GSTR-1 is a mandatory report
that businesses file to declare their sales under GST.
✔ It ensures transparency in tax
collection.
✔ Helps customers claim their Input Tax Credit
(ITC).
✔ Prevents penalties and maintains compliance.
🔹 GSTR-1 is a report of all sales, tax collected, and adjustments.
🔹 It must be filed accurately and on time to ensure compliance.
🔹 Proper classification of sales (B2B, B2C, Exports) is essential.
🔹 Errors can lead to penalties and ITC mismatches for buyers.
Key Takeaways:
✔ File on time – 11th of the next month
(monthly) / 13th of the next quarter (quarterly).
✔ Report all sales correctly – B2B, B2C,
exports, and adjustments.
✔ Review before submitting – Avoid errors that
can affect ITC claims.
Click here to read about GSTR -3B
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