A Comprehensive Guide to Filing GSTR-5: GST Return Filing for MSMEs with Foreign Business Transactions

Introduction

The Goods and Services Tax (GST) is a comprehensive indirect tax system introduced in India on July 1, 2017. The GST has simplified the tax compliance process for businesses, but it has also introduced some new compliance requirements.

One of the new compliance requirements for businesses that have foreign business transactions is to file GSTR-5. GSTR-5 is a return form that must be filed by non-resident foreign taxpayers registered under GST.

This blog post will provide a comprehensive guide to filing GSTR-5. The blog post will cover the following topics:

1. Who is required to file GSTR-5?
2. What are the due dates for filing GSTR-5?
3. What are the penalties for not filing GSTR-5 on time?
4. How to file GSTR-5?
5. FAQs about GSTR-5
6. Additional Resources

Who is Required to File GSTR-5?

GSTR-5 must be filed by non-resident foreign taxpayers who are registered under GST. A non-resident foreign taxpayer is a person who is not resident in India and who does not have a business establishment in India.

To be considered a non-resident foreign taxpayer, you must meet the following criteria:

1. You must be a foreign company or individual.
2. You must not have a permanent establishment in India.
3. You must have registered under GST.

If you are a non-resident foreign taxpayer and have made supplies of goods or services in India or received supplies in India, you must file GSTR-5. It is important to note that this return is applicable for each registration obtained by the non-resident taxpayer separately.

What are the Due Dates for Filing GSTR-5?

The due dates for filing GSTR-5 are as follows:

1. For the month of January, February, March, April, May, and June: 13th of the following month.
2. For the month of July, August, September, October, November, and December: 13th of the following month or within seven days after the end of the validity period of registration, whichever is earlier.

It is essential to adhere to these due dates to avoid any penalties for late filing.

What are the Penalties for Not Filing GSTR-5 on Time?

Filing GSTR-5 on time is crucial to avoid penalties. The penalties for not filing GSTR-5 on time are as follows:

1. For the first default: ₹100 per day.
2. For the second default: ₹200 per day.
3. For the third and subsequent defaults: ₹500 per day.

It is important to note that these penalties are subject to change, and staying updated with the latest regulations and notifications is advisable.

How to File GSTR-5?

Filing GSTR-5 can be done easily online through the official GST portal. Below are the steps to file GSTR-5:

1. Go to the GST portal (https://www.gst.gov.in/) and login using your GSTIN and password.
2. Click on the “Services” tab and then select “Returns” > “Returns Dashboard.”
3. Choose the financial year and the tax period (month) for which you want to file GSTR-5.
4. Click on the “Prepare Online” button for GSTR-5.
5. Enter the details of your outward supplies and inward supplies for the selected tax period.
6. Cross-verify all the information provided and make sure it is accurate and complete.
7. After reviewing, click on the “Submit” button to file GSTR-5.
8. A success message will be displayed on the screen, confirming that your GSTR-5 has been filed successfully.

It is essential to keep a copy of the filed GSTR-5 for your records and for any future references.

FAQs about GSTR-5

Q: What are the inward supplies that I need to report in GSTR-5?

A: You must report all inward supplies you have received from unregistered persons in India. This includes goods and services that you have imported into India.

Q: What are the outward supplies that I need to report in GSTR-5?

A: You need to report all outward supplies that you have made to unregistered persons in India. This includes goods and services that you have supplied from India to other countries.

Q: What are the penalties for filing GSTR-5 with incorrect or incomplete information?

A: If you file GSTR-5 with incorrect or incomplete information, you may be subject to a penalty of ₹500 per day for each day the information is incorrect or incomplete.

Q: What are the penalties for not filing GSTR-5 at all?

A: If you do not file GSTR-5 at all, you may be subject to a penalty of ₹10,000.

Conclusion

Filing GSTR-5 is a crucial compliance requirement for non-resident foreign taxpayers registered under GST who engage in business transactions in India. By following the steps outlined in this comprehensive guide, you can ensure that you file GSTR-5 correctly and on time, thereby avoiding penalties.

Always remember to keep track of the due dates and any updates in regulations to maintain a smooth and compliant GST filing process. Utilize the official GST portal and avail any additional resources available for your assistance.

By adhering to the GST guidelines and maintaining accurate records, MSMEs with foreign business transactions can successfully navigate the GST regime, contributing to the ease of business in India.