GSTR-6 is more than just a return; it’s your avenue to efficiently distribute Input Tax Credit (ITC) across your organisation’s branches. This process ensures compliance within the Goods and Services Tax (GST) framework. To navigate this successfully, let’s delve into the crucial aspects of GSTR-6 filing, from eligibility criteria to meticulous documentation, and explore how you can optimise credit allocation.
What is GSTR-6?
GSTR-6 is a monthly return form required to be filed by firms functioning as Input Service Distributors (ISD) under the Goods and Services Tax (GST) system. When filing GSTR 6, ISDs should furnish details about inbound supplies received and purchases made from other registered taxpayers. Additionally, they must provide information about the allocating input tax credits among their subsidiaries.
It’s important to note that all ISDs, regardless of whether they have any transactions, must file GSTR-6.
When is the GSTR-6 due, and is there a late submission fee?
As per the GST Act, you must file the GSTR-6 Form by the 13th of the following month. Late fees are now reduced to Rs. 50 per day. It’s important to note that no reduction provision applies if you’re filing a NIL return.
Who should file GSTR-6?
Filing GSTR 6 is mandatory for Input Service Distributors (ISD). An ISD is a GST taxpayer who receives invoices for services employed by its branches and distributes the associated tax credit—commonly known as the Income Tax Credit (ITC). This credit encompasses central tax (CGST), state tax (SGST), union territory tax (UTGST), and integrated tax (IGST), all linked to the services in question. Notably, these branches may possess distinct GST identification numbers (GSTINs) yet must be registered under the same PAN number.
Also Read: Best practices for GSTR-6 compliance
Two modes for filing of GSTR 6 form
Digital Signature Certificate (DSC)
Digital Signature Certificates (DSC) are electronic versions of physical signatures. They can be used digitally to establish identity, access the internet, or digitally sign documents. In India, authorised Certifying Authorities issue DSCs. The GST Portal exclusively accepts PAN-based Class II and III DSCs.
Electronic Verification Code (EVC)
The Electronic Verification Code (EVC) establishes user identity by generating an OTP on the GST Portal. The portal sends this OTP to the registered mobile phone number of the authorised Signatory provided in part A of the Registration Application.
Details Required to fill GSTR-6
GSTIN :
GSTIN is a 15-digit goods and service tax identification number assigned to every individual registered under GST. It should be provided for the dealer on whose behalf the return is filed.
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Name of the Taxpayer:
The name of the taxpayer will be auto-populated.
Tax credit received for distribution:
Automatically populated details of each input received are subsequently distributed as Input Tax Credit (ITC), listed by invoice.
Total ITC for Distribution in the Tax Period:
The ISD accumulates all input tax credits and categorizes them into Total ITC, Eligible ITC, and Ineligible ITC for distribution.
Distributing Input Tax Credit in Table No. 4:
In this section, you must provide information regarding the ISD reports and the complete allocation of ITC in the return. Subsequently, the receiving dealer becomes eligible to claim the ITC based on this information.
Changes to Previously Provided Information in Table No. 3:
If you have identified any inaccuracies in the invoice data for domestic supplies submitted in previous returns, you can rectify them in this section.
Input tax credit discrepancies and reclaims for distribution in this tax period:
You can adjust the total Input Tax Credit due to discrepancies or reclaimed ITC resulting from rectifying mismatches in this section.
Adjustments for Input Tax Credit Distribution from Tables 6 and 7:
You can provide any alterations to the credit amount distributed to dealers based on information submitted in Tables 6 or 7 in this section.
Redistribution of ITC Distributed to a Wrong Recipient:
This section addresses any erroneous distribution of Input Tax Credits to dealers in earlier returns.
Late Fee Declaration:
Complete this table if any penalties incurred due to delayed return filing.
Claiming Refund from Electronic Cash Ledger:
If you are eligible for a refund, you can use this section to request from the electronic cash ledger.
Requirements for Submitting GSTR 6
- You should possess a 15-digit PAN-based GSTIN and be officially registered as a taxpayer under the GST system.
- Your company’s overall revenue should amount to at least ₹20 Lakhs.
- All registered Input Service Distributors (ISD) under GST, excluding those under the composition scheme or having a Unique Identification Number (UIN), can file the GSTR 6 return.
- Non-resident taxpayers are exempted from the obligation of filing the GSTR 6 return.
- It’s essential to comprehensively document all taxable purchases made on behalf of your other businesses or subsidiaries.
- Additionally, ensure you record the specific allocation details of the input tax credit received for these purchases among your branches using internal transactions.
Also read: GSTR-6 Applicability: Who Needs to File and When?
Frequently Asked Questions(FAQs)
1. Is there an offline tool available for filing Form GSTR-6?
Yes, there is an offline tool for filing Form GSTR-6.
2. How can I distribute credit to my other units in Form GSTR 6?
You can allocate both eligible and ineligible ITC to the units by utilising Table 5 and Table 8 in Form GSTR-6.
3. Can the date of filing of Form GSTR-6 be extended?
The Government can extend the date of filing of Form GSTR-6 through notification.
