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Tax Laws and Practice · Procedural Compliance under GST

Returns under GST for CS Executive

Updated 11 October 2026 · Fact-checked

Returns under GST are periodic statements a registered person files to report supplies, tax paid and input tax credit. GSTR-1 reports outward supplies, GSTR-3B is the summary return for paying tax, and the annual return covers the year. To solve questions, identify the return, the default, then apply the late fee under section 47.

Understand Returns under GST

A return is how a registered person tells the department what he supplied, what credit he claimed and what tax he paid. GST is a self-assessed tax, so returns are the main compliance tool.

GSTR-1 is the statement of outward supplies, filed under section 37. It shows your sales invoice by invoice. The details flow to your customers, who see them as their inward supplies. GSTR-3B is the return under section 39. It is a summary return in which you declare tax liability, claim input tax credit and pay tax. Think of GSTR-1 as the sales record and GSTR-3B as the payment return.

The annual return is furnished under section 44 once a year. It is commonly filed as GSTR-9, with a reconciliation statement (GSTR-9C) for persons above the prescribed turnover who must file it. Check the current thresholds and forms in the rules before writing figures. Other returns include those for composition dealers, non-resident taxable persons, and e-commerce operators who collect tax at source (section 52).

Input tax credit depends on matching. Under section 16(2), you can claim credit only if you hold the tax invoice, the supplier has furnished the invoice details in the statement of outward supplies and these have been communicated to you, you have received the goods or services, the credit has not been restricted under section 38, the tax has been actually paid to the Government, and you have furnished your return under section 39. So your credit depends on your supplier filing GSTR-1 correctly.

Default has a price. Late filing attracts a late fee under section 47 and interest under section 50 on tax paid late. If you do not file at all, the officer can assess you on best judgment under section 62.

Key rules to remember

Late fee: outward supplies and returns (section 47(1))
₹100 per day of default, maximum ₹5,000
Applies to failure to furnish details under section 37, or returns under section 39, section 45 or section 52, by the due date. Shown in the Act text as ₹100 a day; check notified reductions for the exam year.
Late fee: annual return (section 47(2))
₹100 per day, maximum 0.25% of turnover in the State or Union territory
Applies to failure to furnish the annual return under section 44 by the due date. The cap is a quarter per cent of turnover in the State or Union territory.
Conditions for ITC (section 16(2))
Tax invoice or debit note + supplier has furnished details and they are communicated + goods or services received + not restricted under section 38 + tax actually paid to Government + return under section 39 furnished
All conditions must be met together.
Time limit for claiming ITC (section 16(4))
Earlier of: 30 November following the end of the financial year of the invoice or debit note, OR furnishing of the annual return
Credit cannot be taken after this date.
Non-payment to supplier within 180 days (section 16(2) second proviso)
Pay value plus tax to supplier within 180 days of invoice date, else pay back the ITC with interest under section 50
Does not apply to supplies on reverse charge. Credit can be re-availed on payment.
Assessment of non-filers (section 62)
Order within 5 years from the annual return due date for that financial year; withdrawn if valid return filed within 60 days of service
A further 60 days is allowed on an additional late fee of ₹100 per day beyond 60 days. Interest and late fee still continue.

How to solve Returns under GST questions

Use this order for any question on returns, late fee or credit matching. Write the section number beside each point.

  1. 1Identify the return involved: GSTR-1 (section 37), GSTR-3B (section 39), annual return (section 44), final return (section 45) or e-commerce return (section 52).
  2. 2Note the due date and the actual date of filing. Count the days of delay from the day after the due date up to the filing date.
  3. 3Apply section 47. For sections 37, 39, 45 or 52 returns, use ₹100 a day with a ₹5,000 maximum. For the annual return, use ₹100 a day with the cap at 0.25% of turnover.
  4. 4Compute the cap and take the lower of the daily amount and the cap.
  5. 5If tax was paid late, add interest under section 50 separately. Late fee and interest are different levies.
  6. 6If the question is about credit, test each condition of section 16(2) and the time limit in section 16(4).
  7. 7If the person has not filed even after notice under section 46, bring in section 62 assessment and the 60-day window.
  8. 8State a clear conclusion in one line with the amount or the eligibility.

Quickest way: Late fee in four lines

When to use it: Use when the question gives a due date, a filing date and asks for late fee.

  1. Count delay days: filing date minus due date.
  2. Multiply days by ₹100.
  3. Compare with the cap: ₹5,000 for section 47(1) returns, or 0.25% of turnover for the annual return.
  4. Write the lower figure and add that interest is payable separately under section 50 if tax was late.

Common mistakes in Returns under GST

  • Treating GSTR-1 and GSTR-3B as the same return.

    Both are monthly and both show sales.

    Fix: GSTR-1 gives invoice-wise outward supply details under section 37. GSTR-3B is the summary return under section 39 where tax is paid and credit is claimed.

  • Applying the ₹5,000 cap to the annual return.

    Students remember one cap for all returns.

    Fix: Section 47(2) caps the annual return late fee at 0.25% of turnover in the State or Union territory. The ₹5,000 cap is only for section 47(1).

  • Counting the due date itself as a day of delay.

    Careless counting of days.

    Fix: Delay starts the day after the due date. Subtract the due date from the filing date.

  • Merging late fee and interest into one amount.

    Both arise from late filing.

    Fix: Late fee is under section 47 and is a fee for default in filing. Interest is under section 50 on tax paid late. Show them separately.

  • Claiming credit because the invoice is in hand, ignoring supplier's filing.

    Students stop at the first condition of section 16(2).

    Fix: Check that the supplier has furnished the invoice in the statement of outward supplies and it is communicated to you, and that credit is not restricted under section 38.

  • Missing the time limit for credit.

    Students forget section 16(4) has two limbs.

    Fix: The deadline is the earlier of 30 November following the financial year end or filing of the annual return.

Worked examples

Example 1

Rohan Traders, a registered person in Pune, was due to file its GSTR-3B for a month by 20 April but filed it on 30 April. Compute the late fee under section 47.

Show the solution
  1. The return is under section 39, so section 47(1) applies.
  2. Delay runs from 21 April to 30 April, which is 10 days.
  3. Late fee = 10 × ₹100 = ₹1,000.
  4. The maximum is ₹5,000. ₹1,000 is below the cap, so it stands.
  5. Interest under section 50 is separate and applies only if tax was paid late.

Answer: Late fee is ₹1,000 under section 47(1). Interest, if any, is payable separately under section 50.

Example 2

Sundaram Textiles Ltd had turnover of ₹40,00,000 in Tamil Nadu. It filed its annual return 100 days late. Find the maximum late fee under section 47(2) and the fee payable.

Show the solution
  1. The annual return falls under section 44, so section 47(2) applies.
  2. Daily amount = 100 × ₹100 = ₹10,000.
  3. Cap = 0.25% of ₹40,00,000 = ₹10,000.
  4. The daily amount equals the cap, so the fee is ₹10,000.
  5. The ₹5,000 cap is not used because it applies only to section 47(1).

Answer: Late fee payable is ₹10,000, being both the accrued amount and the 0.25% cap.

Exam tips

  • Write the section number with every rule: 37 for GSTR-1, 39 for GSTR-3B, 44 for annual return, 47 for late fee, 50 for interest.
  • Show the day count and the cap comparison. Examiners give marks for the working.
  • For credit questions, list the section 16(2) conditions one by one and tick each against the facts before concluding.
  • Give a one-line conclusion after the analysis, as ICSI style expects: provision, facts, conclusion.
  • Rates of late fee can change by notification. If the question gives a rate, use the question's rate.

Practice questions from Procedural Compliance under GST

Returns under GST in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Returns under GST: frequently asked questions

What is the difference between GSTR-1 and GSTR-3B?

GSTR-1 is the statement of outward supplies under section 37 and lists invoices. GSTR-3B is the summary return under section 39 in which you pay tax and claim credit. Credit for your buyers depends on GSTR-1.

What is the late fee under section 47 of the CGST Act?

For returns under sections 39, 45 or 52 and details under section 37, it is ₹100 a day, up to ₹5,000. For the annual return under section 44, it is ₹100 a day, up to 0.25% of turnover in the State or Union territory.

What are GSTR-9 and GSTR-9C?

GSTR-9 is the usual form of the annual return under section 44. GSTR-9C is the reconciliation statement filed along with it by those above the prescribed turnover. Check the rules for current thresholds.

Can I claim input tax credit if my supplier has not filed GSTR-1?

No. Section 16(2)(aa) requires the supplier to have furnished the invoice details in the statement of outward supplies and for them to be communicated to you. Without that, the credit is not available.