GSTR-1_vs

SS Digital India

1 week ago

GSTR-1_vs

Transcript

00:00If you're selling online in India, you know that GST filing can be a real headache.

00:05And honestly, one of the biggest mix-ups is trying to figure out your GSTR1 sales data

00:09versus those TCS reports you get from the marketplaces.

00:12Well, today, we're going to clear that up once and for all.

00:15So I hear this constantly.

00:17It's a super common assumption for sellers.

00:19You know, you get your settlement report from Amazon or Flipkart,

00:22you see the TCS numbers, and you think,

00:25perfect, I'll just use this for my GSTR1.

00:27It seems like the easy way to do it, right?

00:30Well, let me just stop you right there.

00:32That is absolutely 100% incorrect.

00:35And relying on that method isn't just a small slip-up.

00:38It can lead to some really serious compliance issues,

00:41tax notices, and even penalties down the road.

00:44See, this isn't just a simple error.

00:46It's a fundamental misunderstanding of how the whole GST system is designed to work for e-commerce.

00:51So let's break down exactly why using those marketplace reports

00:55for your GSTR1 filing is the wrong move.

00:58Okay, let's dive into this.

01:00To really get why this is a mistake,

01:02you have to understand that there are two different sections of the GST law

01:05that are working at the same time, but separately.

01:08Let's start with your main job as a seller,

01:11which is all laid out in Section 37.

01:13Section 37 of the CGST Act is crystal clear on this.

01:18It says that you, the seller,

01:20are legally on the hook to report the details of all your sales,

01:23what the law calls outward supplies in your GSTR1 return.

01:28This is your responsibility and nobody else's.

01:31And if you take away only one thing today, let it be this.

01:36The foundation, the single source of truth for your GSTR1 filing is not a settlement report.

01:42It's not a TCS statement.

01:44It's the actual sales invoices that you issue to your customers for every single sale, period.

01:50So, what does that cover?

01:52Well, as you can see, it's the whole shebang.

01:55Your business-to-business invoices, your direct-to-consumer sales,

01:58any exports, and even things like debit or credit notes.

02:01But notice what's missing from that list?

02:03You got it.

02:04TCS data.

02:05It simply does not belong here.

02:07Okay, enough with the legal jargon.

02:09Let's make this super practical.

02:11We're going to walk through a really simple example

02:13so you can see exactly how this plays out in the real world.

02:16So, let's just say you sell a product and the base taxable value is 10,000 rupees.

02:21On top of that, you've got your GSTR, let's say, at 18%, which adds another 1,800 rupees.

02:27That brings the total value on the invoice,

02:30the amount your customer actually sees and pays, to 11,800 rupees.

02:35And here's the crucial point.

02:36Your GSTR, one return, has to report a taxable value of 10,000 rupees and GST of 1,800.

02:43It needs to be a perfect mirror of that invoice.

02:47It is completely, totally irrelevant what Amazon or Flipkart actually pays you

02:51after they've taken out their commissions, fees, and whatever else.

02:54Your filing is based on the sale, not the final settlement.

02:58Okay, so that's your job.

02:59But what about the marketplaces?

03:01What's this whole TCS thing about then?

03:04Well, this is where that second piece of the law, Section 52, comes into the picture.

03:09This part defines the totally separate job of operators like Amazon and Flipkart.

03:14See, Section 52 puts a legal responsibility on the e-commerce platform, not on you.

03:20They are required to collect a tiny percentage, specifically 1%,

03:24as tax-collected at source, or TCS,

03:27on the net value of the stuff you sell through their site.

03:30So how does that actually work behind the scenes?

03:33Well, first, the marketplace figures out your net sales for the month.

03:37Then, they take out that 1% as TCS from your payment.

03:41After that, they deposit that money with the government by filing their own return,

03:45which is called a GSTR-8.

03:47And finally, that amount pops up in your GST portal as a credit you can use.

03:52Just to put some simple numbers on it,

03:54let's say your net taxable sales for a month were 1 lakh rupees.

03:58The marketplace would simply collect 1% of that, which is 1,000 rupees, as TCS.

04:03They handle all of this for you.

04:05And this is another really key point to get.

04:08That TCS amount.

04:10It's not your income.

04:11You should think of it more like an advanced tax payment that's been made for you.

04:15It's basically a credit just sitting in your account,

04:18ready for you to use later to pay off the final GST UO when you file your GSTR-3B.

04:24So now we have the two big pieces of the puzzle.

04:26Your role under Section 37 and the marketplace's role under Section 52.

04:31Let's put them right next to each other to make the difference absolutely unmistakable.

04:34Now, what's really interesting about this slide is how it just simplifies everything.

04:39I mean, just look down the rows.

04:41Who does it apply to?

04:42Section 37 is for you, the seller.

04:44Section 52 is for the e-commerce operator.

04:47What's the basis for the calculation?

04:48For you, it's your sales invoices.

04:50For them, it's the net taxable supplies.

04:52The returns they file are different.

04:54The whole purpose is different.

04:55You're reporting sales.

04:56They're collecting a tax.

04:57They're just two separate parallel tracks.

05:00All right.

05:00So after all of that, what's the one single golden rule you need to walk away with?

05:05What is the one thing that will always, always keep your GSTR-1 filings accurate?

05:10It's this.

05:11Your responsibility under Section 37 and the marketplace's responsibility under Section 52

05:17are completely independent.

05:20They operate in their own lanes and they never, ever mix.

05:24One does not replace the other.

05:26So the crucial point is this.

05:28Your GSTR-1 filing is built on one foundation and one foundation only, your invoices.

05:34That is always your single source of truth.

05:37So after going through all of this, the final question is really for you to think about.

05:42Take a good, honest look at your own process.

05:45Are your tax filings actually built on the right foundation?

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