GSTR 5 Return Explained: Non-Resident Taxpayer Must Know

GSTR-5 is one of the key return forms under the Goods and Services Tax regime that non-resident foreign taxpayers must file when conducting business transactions in India. By visiting the official website of GST, all eligible taxpayers can download the PDF file of this form. 

The GSTR-5 return provides accurate records about all inward and outward supplies alongside credit and debit notes, taxes settled and due tax payable value. It ensures transparency and substantiates that an individual's or entity's tax obligations have been appropriately settled.

Keep reading to gather information about why Form GSTR-5 is significant and when to file this return online. 

Why Is GSTR-5 Important?

Filing GSTR-5 is crucial as it ensures that non-resident taxable persons comply directly with the Indian taxation rules. Submitting this document on time assists in tracking the taxes applicable for foreign organisations or individuals running a business in India. It helps restrict cases of tax evasion and preserves the integrity of the GST regulations. 

After filing the GSTR-5 return, non-resident business persons can avail input tax credit (ITC) which marginally cuts down their tax obligations. Also, it facilitates timely reporting, which is essential to stay GST-compliant. Overall, it establishes a strong sense of trust between the GST Council and the taxpayer. 

Who Should File GSTR-5?

Non-resident foreign taxpayers must file the GSTR-5 return form if they are registered under the GST Act. Also, to be eligible, these people must be engaged in the supply of OIDAR (Online Information and Database Access or Retrieval) services from any other country outside Indian territory. Their end customers must be non-taxable Indians. 

People who are required to fill out the GSTR-5 form can acquire temporary registration via the GST portal. It will allow them to file returns for the goods or services sold during the said tax period. Note that the eligible entities should not have a business establishment within the territorial boundaries of India. 

When to File GSTR-5?

GSTR-5 return needs to be submitted every month by the 13th of the following month for a particular tax period. It is essential for non-resident taxpayers to file this return in a timely manner and avoid any interest charges or penalties. 

Uploading GSTR-5 before the deadline ensures compliance with the GST norms and brings accuracy to income tax reporting. On the other hand, late declarations can attract hefty fines enhancing the total tax obligations. 

Non-resident taxpayers must stay updated with the GST returns deadlines to evade legal complications. Particularly, the GSTR-5 holds details of all outward supplies, making sure the taxpayer is precisely reporting their tax dues. 

Meeting form submission deadlines consistently not only assists with compliance but also ensures smooth business operations maintaining goodwill with tax authorities. 

How to Revise GSTR-5?

At present, nobody can bring revisions to GSTR-5 once it has been filed. Thus, it is crucial for all non-resident taxpayers to fill out accurate information before uploading to avoid any mismatches. Preciseness needs to be the paramount objective and thus you should double-check each field before submitting. 

Moreover, the thorough review procedure ensures that all tax particulars, transaction specifics and credits are appropriately placed. As GSTR-5 cannot be modified after submission, it is required to adjust any erroneous entries or omissions in the upcoming returns. 

However, these adjustments prove to be time-consuming and cumbersome. Therefore, meticulous and accurate GSTR-5 return filing not only helps avoid hassles but also saves a business from legal issues. 

So, always prioritise keeping updated transaction records and checking them at regular intervals to aid error-free submissions. It will directly contribute to tax compliance and help you run commercial activities smoothly. 

?feature=shared

Prerequisites for GSTR-5 Filing

A taxpayer must meet certain criteria to fill out Form GSTR-5. The conditions are listed below:

• Under the GST law, the taxpayer must be a registered NRI taxable entity.
• A valid GSTIN must be assigned to the taxpayer.
• Taxpayers need to set a valid username and password for their online GST account.
• Finally, a taxable person should obtain a genuine Digital Signature Certificate (DC) and it has to be non-expired. Again, this criterion is for those whose digital signing is mandatory. This includes LLPs, companies, FLLPs, etc. In the case of others, the genuineness of returns can also be verified through EVC. 

How to File GSTR-5?

By executing the steps mentioned below one can simply file their GSTR-5 return:

Step 1: Open the official GST portal and log in to your account by entering the right details, i.e., your password and username. 

Step 2: Once you reach the homepage, go to the ‘Service’ option and select ‘Return Dashboard’ under the ‘Return’ section.

Step 3: Access the drop-down menu on the redirected page, choose the appropriate filing year and the month of return. Finally, go for the ‘Search’ option.

Step 4: Choose the ‘PREPARE ONLINE’ option. 

Step 5: Navigate to the bottom of your device screen and choose ‘Generate GSTR-5 Summary’ to see the comprehensive list of auto-drafted supplies of goods or services.

Step 6: Following this stage, the foreign taxpayers must enter the necessary information in relevant blocks. After the mandatory fields have been addressed, do not forget to click on the ‘Save’ button.

Step 7: After all the details have been entered, click on ‘Preview’. It allows the users to verify their inputs before making final submission.

Step 8: Now, select ‘10B’ and ‘10A’ to preview any tax liability. 

Step 9: After the verification is done, proceed to an e-Acknowledgement checkbox to click on ‘Submit’.

Step 10: To end the process, pay any outstanding taxable value as mentioned. Choose ‘File GSTR-5’ following which you can see your filing completion status. 

Details to be Covered in GSTR-5 Return

The Government of India has prescribed 14 different headings in the current GSTR-5 format. Below, you can see brief descriptions of each heading that is a part of GSTR-5 as per Indian tax regulations:

• GSTIN

In this segment of the unified portal, a taxpayer needs to enter their GSTIN. If anyone does not have GSTIN, then they can mention their provisional ID. 

• Name of the Taxpayer

This section is already filled with accurate records and the user just needs to verify the details. It shows the legal and trade name of the taxpayer. 

• Validity Period for Registration

This date is also auto-populated and needs to be verified.

Following this, a taxpayer must mention an appropriate month and year to state the period for which the GSTR-5 return is being submitted. 

• Capital Goods/Inputs Collected From Other Countries (Imports)

All non-resident taxpayers should report the basic details of goods imported from outside. The requisites include a bill of entry particulars in addition to the rate of tax, cess paid, IGST and amount of ITC available. NRs can only import purchases or inward supplies to align with direct tax compliance.

• Modifications in the Data Submitted Through Any Earlier Return

The NRs utilise this part to change any entries for imports made in earlier returns. Amendments can be brought in:

• Rate of IGST
• Bill of entry
• Taxable value
• Amount of ITC now available
• Amount of IGST and Cess
• Differential value of input tax credit (when excess is reversed and vice versa)

It is important to note that taxpayers need to provide both revised and original Bill of Entry details.

• Taxable Outward Supplies Aimed Towards Registered Persons (Covering UIN Holders)

Under this section, taxpayers can refer to invoice-wise data of individual B2B sales in India. It even covers sales made to UIN holders. Also, the particulars of IGST/CGST and SGST & Cess in addition to the state needs to be given. 

• Taxable Outward Supplies (Inter-state) Made to Unregistered Persons Where the Invoice Amount is Exceeding ₹2.5 Lakh

It is a prominent part where one finds all the information regarding B2C large transactions, i.e., interstate sales where the end customers are unregistered. Also, the invoice value must be less than ₹2.5 Lakh. 

• Taxable Supplies (Net of Credit Notes and Debit Notes) Made to Unregistered Persons Excluding the Items Listed in Table 6

Here, taxpayers can see specifics of sales to unregistered dealers. This head should encompass all intra-state and inter-state sales below the threshold of ₹2.5 Lakh. 

Suppliers can specify their intra-state sales in a summarised manner. However, inter-state sales have to be given state-wise. 

• Changes to Taxable Outward Supply Particulars Already Offered Through Returns for Previous Tax Periods in Tables 5 and 6 (Comprising Debit Notes/Credit Notes and Changes Thereof)

This part conveys information related to specifics of B2C Large and B2B of earlier filing periods. The original credit notes and debit notes generated throughout the month are shown here. Any amendments made to the credit/ debit notes also appear here. If a taxpayer wants to make changes, then they must provide the original information here. 

• Amendments Reflected in Taxable Outward Supplies to Unregistered Dealers Shown in Returns for Previous Tax Periods in Table 7

B2C sales of the earlier months that are ideally covered in Table 7 can be modified later on. Such changes are visible under this head. However, interstate sales must be represented statewise while intra-state sales are shown as a consolidated summary. 

• Total Tax Amount

Here, one can verify the total tax liability.

1. On Account of Outward Supply:

This part wraps up the details of tax liabilities towards outward supplies for the present month.

2. On Account of Differential ITC Being Negative in Table 4:

In this segment, one can check the extra tax to be furnished because of the reversal of ITC. Such a scenario may arise when changes in any imports take place for the previous months (Table 4). 

• Tax Payable and Paid 

Under this head, taxpayers fetch details showing how much tax they are actually paying during a month. They can see a clear demarcation of CGST, SGST, IGST and Cess. All the relevant taxpayers can either pay using cash or utilising their available ITC. 

• Interest, Late Charges and Other Payable Amounts

This segment will show any reasons for interest and due late charges and the late fees that have been already furnished due to late filing of return after the prescribed time period. 

• Refund From Electronic Cash Ledger

This part has the specifics of refunds collected in a taxpayer’s electronic cash ledger. A user can access the authorised signatory drop-down provided in this section to select the bank account where they wish to get the refund. 

• Debit Entries in Electronic Credit/ Cash Ledger for Taxation/ Interest Payment (Must be Populated After Paying Tax and Submitting Returns)

In this part, finally, you can see the debit entries in the cash ledger which is cash outflow for meeting interest/tax/late payment charges. This table is filled out after tax payment and successful submission of return. 

Eventually, the GSTR-5 return is acknowledged by an authorised signatory. This person can be a representative of the NR. Also, they should be an Indian resident with a genuine PAN card.

GSTR-5 Late Filing Charges and Penalty

If someone misses the filing deadline of GSTR-5, that can attract significant late fees and additional interest.

• The respective taxpayer will be responsible for settling 18% interest on the due tax money as a late payment penalty.
• Moreover, a late charge of ₹20 will be levied every day, beginning from the 14th of a month when the taxable person is submitting a nil return. Apart from this case, ₹50 is charged for each day of delay. 
• According to the GST Act, GSTR-5 filers can be accountable for up to ₹5,000 as a penalty. 

Conclusion

Non-resident taxpayers should compulsorily file the GSTR-5 return to maintain adherence to GST regulations. To upload this form, they access the official GST portal and submit accurate transaction details.

As penalties are involved in the case of mismatches or discrepancies, many consider seeking professional help to ensure accuracy in tax reporting. You can also take the assistance of GST experts to file accurate returns.

💡If you want to streamline your payment and make GST payments via credit card, consider using the PICE App. Explore the PICE App today and take your business to new heights.

FAQs