written by Khatabook | September 23, 2021

How To File Nil GSTR 1 Return on GST Portal

GSTR-1 is a detailed monthly return required to be filed by every taxpayer. This return consists of information on the sales or outward supplies by uploading invoices of business activities. So, each supplier or client, whether it's Business-to-Business (B2B) or Business-to-Client (B2C), are described in this GST return with their Goods and Service Tax Identification Number (GSTIN). In case you don't have a Supplier or a Customer, you must file a GSTR-1 Nil Return. Even if there was no economic activity during a month, all regular taxpayers with GST registration must file a GSTR1 NIL return.

What is GSTR 1 NIL Return?

Outgoing supplies by a business are reported on the GSTR 1 monthly return. The recipient of a supply of goods must exist if a transaction of supply of goods has been entered into. In essence, it's a return that shows all of a company's sales transactions. The Nil return in GST is required for all regular taxpayers with GST registration, even if there was no commercial activity in the month. You can quickly file a GSTR1 Nil return online, and it only takes a few minutes.

The goal of filing a NIL return is to demonstrate to the Income Tax Return department that you did not pay any taxes during the year because you did not meet the taxable income criterion. GSTR1 NIL Return is required when the taxpayer has no outward supply or sales of goods/services in the month.

The taxpayer must file a GSTR 1 NIL return if they meet the following conditions:

  • The taxpayer must be registered as a normal taxpayer, a casual taxpayer, a Special Economic Zone developer/unit (SEZ Unit), or an SEZ Developer and have a valid GSTIN.

  • On the GST Portal, the taxpayer must have selected either monthly or quarterly filing frequency.

Why filing GSTR1 NIL Return is important?

Business owners who earn more than Rs.2,50,000 a year must file a GSTR 1 income tax return. If you earn less than Rs.2,50,000, it is still recommended to file a tax return. As a result, the tax department is kept up to speed on your monthly or quarterly income.

Even if there is no business activity in the firm, taxpayers with GST registration are obligated to file nil returns under GSTR 1. Rs.100 per day is the penalty charged for the non-filing of GST returns.

  • NIL returns are filed primarily to present the ITR as proof of income.
  • With GSTR 1 NIL returns, it is possible to get a refund.

Also Read: Types of GST Returns: Forms, Due Dates & Penalties

How to File GSTR1 NIL Return?

GSTR 1 is filed by any GST registered person, including those who did not have any sales transactions or activities in a given month. In addition, the GSTR1 report contains information on credit notes issued, advanced received, debit notes issued, amount of advance modified, and documents summarised. The procedure for filing a NIL return under GSTR1 is outlined below.

  • STEP 1: Log in to GST Account

Go to the GST registration portal, log in to your account by entering the valid credentials. Click on “Return Dashboard” on the dashboard page.

  • STEP 2: Prepare the GSTR1 Return

A screen will pop up after you click on "Return Dashboard." Mention the filing period and choose the option "Prepare Online."

  • STEP 3: Validate auto-populated GSTR1 Return

When the taxpayer clicks “Prepare Online”, they will be presented with a summary of the GSTR1 return. Make sure that all portions of the GSTR1 return are nil or zero.

  • STEP 4: Submit GSTR1 Return

Once all the facts have been validated, tick the box indicating that you confirm that the information in the filing is correct and click submit.

  • STEP 5: Accept GSTR1 filing

To accept the GSTR1 filing, click the” proceed” button in the confirmation window. After hitting the continue option, the taxpayer will be unable to amend any of the information entered. So, ensure the GSTR1 return is correct and final.

  • STEP 6: Digital Signature on GSTR1 filing

To complete the nil GSTR1 return filing, the taxpayer must digitally sign the GSTR1 return using EVC verification or a digital signature of class 2 after submitting the final GSTR1 return.

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Also Read:GST Invoice – Learn About GST Invoice Rules And Bill Format

Conclusion

Filing GSTR1 Nil Return is essential for every taxpayer when they have no sales or outward supplies. This return form helps in eliminating any kind of penalty for the taxpayer. We hope that through this article, you have understood the necessity of filing a GST Nil return and how to file Nil return in GSTR 1. You can refer to the Khatabook app for more information regarding GST compliance, where you can file returns and develop GST invoices, among other things. 

FAQs

1. What do you mean by NIL return in GSTR1?

A NIL return is filed to demonstrate to the Income Tax Returns department that you have less than the taxable income and have not paid taxes for the year.

2. Is it mandatory to file a GST NIL return?

If you are a typical taxpayer (including SEZ Unit and Developer) or casual taxpayer, you must file Form GSTR-1 even if you haven't done any business during the tax period. It is possible to file a NIL tax return during such time periods (if all conditions for filing a Nil return are satisfied).

3. Why is it important to file NIL under GST?

The NIL return serves as proof and assists the ITR department in understanding the tax-related details of the businesses.

4. When to file GSTR1 NIL Return?

GSTR1 NIL return is filed when no outward supplies (including reverse charge basis supplies, zero-rated supplies, and presumed exports) were made during the month or quarter.

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