Are you a non-resident taxable person seeking to comply with India’s GST regulations?
If yes, GSTR-5 is the form you need to file. It is specifically designed for non-resident businesses supplying goods or services in India, helping you report your taxable transactions and fulfill your GST obligations. By filing GSTR-5 accurately and on time, you can ensure seamless compliance and avoid penalties.
In this guide, you will learn about GSTR-5, its prerequisites, format, and filing process, enabling you to manage tax obligations and remain GST-compliant with ease.
Form GSTR-5: Filing Obligations
Form GSTR-5 is a monthly return that must be filed by all individuals or entities registered as Non-Resident Taxpayers (NRTP) under GST. This form is used to report business transactions, including details of sales and purchases, in compliance with GST regulations. The due date for filing GSTR-5 is the 20th of the month following the tax period for returns up to September 2022. From October 2022 onwards, the due date is the 13th of the month following the tax period or within seven days of business closure, whichever is earlier.
Before proceeding with the filing of GSTR-5, it is essential to first familiarize yourself with the necessary prerequisites that businesses must fulfill to ensure accurate and timely submission. Let’s explore these prerequisites to streamline the filing process and avoid potential errors.
Prerequisites for Filing GSTR-5
Before filing GSTR-5, a non-resident taxable person must ensure certain prerequisites are fulfilled to enable accurate and timely submission. Firstly, the taxpayer must hold an active GSTIN (Goods and Services Tax Identification Number) registered under the non-resident taxable person category. It is essential to maintain accurate records of all outward supplies (sales), inward supplies (imports or purchases), input tax credits (if applicable), and tax liabilities for the relevant tax period.
All pending previous GSTR-5 filings should be completed to avoid discrepancies or errors in the current filing. The taxpayer must also have access to the GST Portal with valid login credentials and ensure that any outstanding late fees, interest, or penalties from previous returns are cleared. Lastly, before proceeding with the filing, it is crucial to verify the availability of sufficient balance in the electronic cash ledger to settle any tax liabilities.
Once you’ve ensured that all prerequisites are met for filing GSTR-5, the next step is to gather the necessary details to ensure a smooth and error-free submission.
Format and Content of GSTR-5
The GSTR-5 return begins with essential details, including the GSTIN, which is the unique identification number assigned to the non-resident taxable person. It also captures the legal name of the non-resident taxable person, the validity period of registration specifying the start and end dates, and the tax period indicating the relevant month and year for which the return is being filed.
In addition to these basic particulars, the return requires the reporting of various transactions and financial information. The key components of the return are summarized below:
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Once you’ve met all the prerequisites for GSTR-5 filing, let’s move forward with the filing process to ensure smooth GST compliance.
Filing Process of GSTR-5
The GSTR-5 filing process enables non-resident taxable persons to stay compliant with GST regulations by accurately reporting tax liabilities and input tax credits (ITC). Filing GSTR-5 on the GST portal involves the following steps:
Step 1 – Visit the GST Portal and log in using your credentials.Step 2 – Click on ‘Services’ > ‘Returns’ > ‘Returns Dashboard’.
Step 3 – Choose the appropriate ‘Financial Year’ and ‘Return Filing Period (Month)’ from the dropdown. Then click on the ‘SEARCH’ button.
Step 4 – In the GSTR-5 tile, click on the ‘PREPARE ONLINE’ button.
Step 5 – Once on the GSTR-5 page, fill out the necessary sections such as outward supplies (sales), inward supplies (imports or purchases), tax liability, and any applicable interest and late fees. If there are amendments from previous filings, make sure to update them in the respective sections.
Step 6 – After entering all details, click on ‘PREVIEW’ to download and review the form. This step helps ensure all data entered is accurate and complete.
Step 7: Once verified, click ‘SUBMIT’. After submission, the form will be locked for editing. Before proceeding to final filing, make sure to clear any outstanding tax liability, which can be paid through NEFT, RTGS, internet banking, or by utilizing the Electronic Cash Ledger available on the GST portal. Then click ‘PROCEED TO FILE’ with either DSC or EVC.
Step 8: Upon successful submission, an Acknowledgement Reference Number (ARN) will be generated. You may download the acknowledgement for your records.
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While the filing process of GSTR-5 is straightforward when carried out with accuracy, failure to comply with deadlines can result in significant consequences that businesses must carefully consider. Let us now examine the implications of late filing in detail.
Consequences of Late Filing of GSTR-5
As per the guidelines in the GSTR-5 user guide issued by the Government of India, late filing of Form GSTR-5 results in mandatory late fees and interest charges. The late fee is calculated using the following formula:
The government imposes a late fee of ₹50 per day, subject to a maximum of ₹5,000. If the taxpayer has no tax liability, the late fee is reduced to ₹20 per day. Additionally, the taxpayer must pay interest at the rate of 18% per annum on the outstanding tax amount from the due date until the date of payment. These financial charges increase compliance costs and strain cash flow.
Delayed filing also results in the suspension of the taxpayer’s GST registration. Until the taxpayer clears the delay, they cannot carry out business transactions or file subsequent returns. This suspension disrupts the input tax credit availability for other businesses linked to that GSTIN and damages the taxpayer’s reputation. Filing GSTR-5 on time helps avoid financial penalties, regulatory action, and trust issues with business partners.
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Beyond understanding the impact of delayed filing, let’s see how non-resident taxable persons can correct errors through the amendment procedures outlined for GSTR-5.
How to Amend Errors in GSTR-5 Filings?
Non-resident taxable persons can correct errors in their GSTR-5 filings through amendments in subsequent returns. The following procedures outline how to amend outward supplies, inward supplies, import details, and credit/debit notes accurately.
1. Amending Outward Supplies
If you’ve entered incorrect invoice details in outward supplies, you can amend them in your next GSTR-5 return. Log in to the GST Portal, go to the Returns Dashboard, and select the relevant tax period. Under “Amendment of Outward Supplies,” update invoice numbers, dates, taxable values, or tax amounts as needed. Don’t forget to pay any additional tax arising from the correction.
2. Amending Inward Supplies
Inward supply details can also be amended easily. In your next GSTR-5 return, head to the “Amendment of Inward Supplies” section. Select the invoice you wish to correct and update taxable amounts or tax rates. Once done, save and submit. This will ensure your input tax credit records remain accurate.
3. Updating Import Details
Non-resident taxpayers often report import details under GSTR-5. If there are mistakes in Bill of Entry numbers, IGST paid, or port codes, use the “Amend Import of Goods/Services” section. Correct the data and save the changes before filing. This will help avoid future reconciliation issues with customs records.
4. Updating Credit/Debit Notes
Incorrect credit or debit note details can be amended in the next filing. Go to the “Amend Credit/Debit Notes” section and correct GSTIN, values, or tax amounts. Submit the changes and adjust your tax liability accordingly. Be sure to maintain proper documentation for these amendments.
Knowing how to file or amend GSTR-5 is essential, but managing it manually can be challenging. Let’s see how Pazy makes the entire process effortless and accurate.
Simplify Your GSTR-5 Filing Process with Pazy
Pazy is an all-in-one automation platform that offers end-to-end tax compliance solutions for non-resident businesses. It helps streamline the GSTR-5 filing and amendment processes, ensuring accurate submissions and adherence to deadlines. By automating invoice capture, GST validation, and 2A/2B reconciliation, Pazy ensures accuracy while reducing the manual effort involved in GSTR-5 filing.
- Automated GST Reconciliation
Pazy automates the entire GST reconciliation process, ensuring all transactions are matched accurately, eliminating manual errors, and saving valuable time. This makes the GSTR-5 filing process faster and more efficient for businesses.
- Real-Time Error Alerts
With real-time alerts, Pazy identifies discrepancies or errors in GST filings, allowing businesses to address issues promptly. This proactive approach ensures GSTR-5 compliance and minimizes the risk of costly mistakes during audits.
- Accurate 2A/2B Reconciliation
Pazy automatically reconciles GST 2A and 2B data, ensuring accurate ITC claims and minimizing discrepancies. This feature ensures your GSTR-5 filing is accurate and compliant with tax regulations.
Pazy simplifies tax filings for SMBs, improving compliance and cash flow. Integrating with accounting tools simplifies processes for finance teams and enhances audit readiness. Industry-specific businesses and startups benefit from efficient ITC management, ensuring compliance and supporting growth.
Conclusion
For non-resident taxpayers engaged in business activities in India, understanding and accurately filing GSTR-5 is essential to remain compliant with GST regulations. However, managing timely amendments, maintaining accurate records, and ensuring proper reconciliation can often be challenging and time-consuming.
To address these challenges, Pazy offers a comprehensive and reliable solution for tax filing. With features such as automated invoice capture, GST validation, and 2A/2B reconciliation, Pazy helps businesses improve accuracy, save time, and maintain consistent input tax credit records.
If you are a non-resident taxpayer seeking to simplify and streamline your GSTR-5 filing process, Pazy offers an efficient solution to manage compliance with ease. Schedule a Free Demo to learn more!
FAQs
1. Can GSTR-5 be filed after leaving India?
No, GSTR-5 must be filed before the non-resident taxable person leaves India. This ensures all tax compliances are completed before departure.
2. Can GSTR-5 be filed without paying taxes?
No, tax payment is mandatory before filing GSTR-5. The return will not be accepted without full payment of tax liabilities.
3. Can I file GSTR-5 without PAN?
Yes, a non-resident taxable person can register and file GSTR-5 using their passport details instead of PAN.
4. Can I file GSTR-5 for multiple months together?
No, GSTR-5 must be filed separately for each tax period. Multiple months cannot be combined in one return.
5. Can additional liabilities be declared in GSTR-5?
Yes, you can declare and pay additional tax liabilities in GSTR-5 before submission.
6. Can refund claims be made via GSTR-5?
No, refund claims cannot be made through GSTR-5. Refunds must be claimed through the prescribed separate process.
7. Can I delete an already filed GSTR-5?
No, once GSTR-5 is filed, it cannot be deleted or revised. Care must be taken before filing.
8. Is Aadhaar authentication required for GSTR-5?
No, Aadhaar authentication is not mandatory for non-resident taxable persons filing GSTR-5.
9. Can I pay taxes partially before filing GSTR-5?
No, full payment of tax liabilities is required before filing GSTR-5. Partial payments are not allowed.
10. Can liabilities be adjusted against credits in GSTR-5?
No, non-resident taxable persons are not eligible to use Input Tax Credit (ITC). All liabilities must be paid in cash.