GSTR 6 Filling: Process, Due Dates and Penalty Details

GSTR 6 is a monthly return registered by Input Service Distributor (ISD). One files it under the GST Regime. The purpose of it is to capture the details of the input tax credit (ITC) received by the ISD. It distributes this credit to associated branches with the same Permanent Account Number. This return includes all details of inward supplies and mechanics of ITC distribution. It maintains transparency and ensure proper tax allocation for a multi-location business structure. Read the blog to know more. 

What is GSTR 6? 

GSTR-6 is a return form that Input Service Distributors (ISDs) file. The form deals with the distribution of input tax credit (ITC) by ISDs. The tax credit distributed to the entities that are part of their network. These can be offices, branches, or other establishments. These entities have the legal rights to receive the distributed ITC. 

The form filed monthly by the ISD. They are responsible for distributing the eligible input tax credit on services. These are distributed to the relevant business units within the same corporate structure. 

Who Can File GSTR 6? 

Filling GSTR-6 is only applicable for businesses registered as Input Service Distributors (ISD). An ISD is a business entity that distributes the input tax credit it receives on services. They distribute the credits to various branches, units, or divisions within its organization. ISDs also include large corporations with franchises or business locations. 

To understand whether you need to it, check if your business holds an ISD registration. This is separate from regular GST registration. It is important to note that only ISDs that receive invoices and credit notes file GSTR-6. 

What is the Due Date for GSTR 6? 

GSTR-6 is usually filed on a monthly basis. The due date for filing the return is the 13th day of the following month. For example, the filling date for GSTR-6 for August is 13th of September. 

It is important for businesses to file GSTR-6 on time. It will help them avoid penalties or interest for delayed filing. Any late filing beyond the due date can cause a penalty as per the GST provisions. 

Key Sections and Information in GSTR 6 

GSTR-6 consists of sections filled by the Input Service Distributor. In the section below we are providing a breakdown of the key sections of GSTR 6: 

1.  GSTIN of the ISD 

Here one will have to fill the GST Identification Number (GSTIN) of the ISD. As an ISD, you must enter your own GSTIN for proceeding the filling. 

2. Basic Information 

Here details about the ISD, are pre-filled by the GST portal. These details include such as the name of the entity, address, and contact information . Businesses must ensure that all the information is correct and up-to-date. 

3. Summary of ITC Received 

This section has a summary of the input tax credit received by the ISD on services. The input tax credit depends on invoices and debit notes issued to the ISD for services. 

Check the following information here: 

• Taxable Value: The total value of the input services. 

• CGST, SGST, IGST, and Cess: The total amount of tax credit received under each type of tax. 

4. Distribution of ITC 

ISD distributes input tax credit into various business units within its network. The distribution stays in alignment with the formula provided in the GST rules. It depends on the turnover or other relevant criteria. 

Here, the ISD will be entering the following details: 

• GSTIN of the recipient (units or branches receiving the credit) 

• ITC amount are distributed to each unit/branch 

• Breakdown of ITC into CGST, SGST, IGST, and Cess 

5.  Receipt of ITC by Recipients 

It tracks the receipt of ITC by each of the business units receiving the distribution from the ISD. It confirms whether there is block on the credit or utilization. 

6. Other Details 

This part of the form includes details such as: 

• ITC received but not distributed: Sometimes there is no distribution of ITC. One can report it here. 

• Mismatch/Discrepancy: These details are listed when there are discrepancies or mismatches. These discrepancies arise between the ITC claimed and should have been claimed. 

7. GST Return Filing for Previous Months 

One can report issues related to filling or adjustments for previous months here. It is vital to track any discrepancies from previous fillings. ? 

How to File GSTR 6? 

Filing GSTR-6 is a simple process. With the step-by-step guide you can file your GSTR-6: 

1. Login to the GST Portal: 

First visit the GST Portal and log in with the GSTIN and password. 

2. Navigate to GSTR-6: 

Go to the ‘Returns’ section, select ‘GSTR-6’ after logging in. Then click on ‘File GSTR-6’. 

3. Fill in the Details: 

Here enter details of the input tax credit received. You will also have to enter the amount distributed across various units or branches. Ensure the accuracy of the information. 

4. Check for Errors: 

The system validates the form and highlight any kind of discrepancies or errors. Ensure there are no mismatches in the data. 

5. Submit the Form: 

Click on ‘Submit’ after completing the form and ensuring all information is correct. The GST portal will ask you to authenticate using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). 

6. Download Acknowledgement: 

You will receive an acknowledgment receipt, after successful submission. You can download it for your records. 

Penalties for Non-Compliance 

The timely filing of GSTR-6 is important. It ensures that your business is compliant with the GST regulations. Failure to file GSTR-6 on time can lead to penalties including: 

• Late Fees: A late fee of Rs. 50 per day (Rs. 25 each for CGST and SGST) applies on filling GSTR 6 after due date.?This late fee continues until the return is filed. 

• Interest on Tax Due: The interest is charged on the unpaid tax when there is any tax due. The interest rate is 18% per annum. 

• Suspension of GSTIN: Persistent non-compliance may lead to GSTIN suspension, especially if other filings are also pending. 

Maintain proper records, track input service invoices. Also ensure timely filing for avoiding penalties. 

Best Practices for Filing GSTR 6 

Follow these best practices to experience a smooth and hassle-free filing of GSTR-6 

1. Maintain Accurate Records: 

All invoices, credit notes, and debit notes must be recorded in the proper way. Remember that organised records will help distributing the input tax credit. 

2. Reconcile ITC Monthly: 

Reconcile the input tax credit received and distributed for avoiding discrepancies during filing. Keeping track of the ITC ensures smooth compliance. 

3. Use GST Software: 

Use of a GST-compliant accounting software streamline the process of GSTR-6 filing. It automates much of the data entry, reconciliation, and calculations. 

4. Verify Data from the GST Portal: 

Check the GST portal for any updates or changes in regulations. It ensures that you are up to date with the latest compliance requirements. 

Conclusion 

GSTR-6 plays help in smooth functioning of the GST system. for Input Service Distributors (ISDs). ISDs can manage their input tax credits and avoid penalties by timely filing. A proper understanding of the filling process simplifies the complexities of GSTR 6. With the right tools and a proactive approach, you can file GSTR 6 timely. Remember that the GST system continues to evolve. Thus staying informed and maintaining accurate records is the key to success. 

FAQ 

Q1. What is GSTR 6 Return? 

GSTR 6 is a monthly return that Input Service Distributor filed under the GST regime. An ISD is an office receiving invoices for services that are used by branches. Then they distribute the Input Tax Credit to those branches. Filling GSTR 6 ensures that the credit is passed to the respective units. These credits help businesses manage tax compliance and utilize ITC effectively. 

Q2. Who Need to File GSTR 6 Return? 

People registered as Input Service Distributors file form GSTR 6. It is a mandatory monthly return. Every ISD must file GSTR-6 for the month in which it has received ITC or needs to distribute ITC. 

Q3. What is the Due Date for Filling GSTR 6? 

The due date when you will have to file GSTR 6 is 13th of every Month. For Example, GSTR6 return for the month of June need to be filed by 13th of July. 

Q4. What Happens if GSTR 6 is Filed after Due Date? 

Late fees apply?on filling of GSTR 6 after the due date. ?In the “Late Fee” Section (Table 10) of GSTR 6 return, the details of the late fees are recorded. 

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.