GSTR 3B, & GSTR-1

GSTR-3B is a monthly self-declaration form summarizing total taxable value and tax liability. GSTR-1 details outward supplies and must be filed monthly or quarterly by registered businesses.

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What is GSTR 3B, & GSTR-1

GSTR-3B is a monthly self-declaration return form that businesses registered under GST must file. It summarizes the total values of outward and inward supplies, including taxable value, tax liability, and input tax credit (ITC) claims. The primary purpose of GSTR-3B is to provide a simplified summary of the taxpayer’s GST liabilities and ITC for the reporting period, ensuring timely payment of taxes.

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For the following reasons, it is essential to reconcile Form GSTR-3B with Form GSTR-1:

Importance of GSTR-3 B Vs GSTR-1

  • The GSTR-3B summary return and the comprehensive GSTR-1 return contain different amounts of sales information.
  • The GST authorities have repeatedly sent show-cause notifications to many taxpayers requesting that they reconcile these amounts.
  • Reconciliation ensures that no invoice is missed or reported more than once in either of the returns. It guarantees that a taxpayer will accurately calculate the output tax due on sales made within a period.  
  • Taxpayers must ensure that the total supplies listed in GSTR-1 and GSTR-3B match as of January 1, 2021. If this happens, the GSTIN may be suspended. We may charge interest on any late GST liability declaration.

The government can help states by giving them the right amount of tax money through reconciliation. This reconciliation helps identify errors in the integrated taxes entered in the GSTR-3B file. The GSTR-1 is the foundation for supply recipients to claim input tax credits when submitting their returns. It is important to submit accurate declarations in both GSTR-1 and GSTR-3B forms on time. This action will help prevent issues with recipients and ensure that only valid tax credits can be claimed.

Reconciliation At The Time Of Filing Annual Returns—A reconciliation of outward supplies is necessary when submitting an annual return in Form GSTR-9 to ensure that the information provided corresponds to the information provided in GSTR-1 and GSTR-3B for all months. The entire amount of taxes stated and paid in GSTR-3B must match the details of taxes paid throughout the year. Since the return-filing system interconnects, it is crucial that GSTR-1 and GSTR-3B match. An incompatibility could lead to inappropriate disclosure in the annual report.

Reasons For Mismatches In GSTR-3B Vs GSTR-1

The following factors are the most frequent causes of the details given in Form GSTR – 3B and GSTR – 1 failing to match up:
  • Taxpayers sometimes place supplies reported in GSTR-1 in the wrong section in GSTR-3B when declaring invoice-by-invoice. Zero-rated sales should be reported in Table 6A of GSTR-1. Do not report them in Table 3.1(a) of GSTR-3B.
  • Mismatches can occur if someone issues an invoice in one month but issues a debit or credit note later.
  • Unregistered individuals do not report supplies made between states in GSTR-3B, but they report them in GSTR-1.
  • Supply costs are accurately displayed, yet tax is paid under the incorrect heading. CGST & SGST in place of IGST, for instance, or vice versa.
  • The interval between when invoices are reported in GSTR-1 and GSTR-3B.

Action On Reconciliation Of GSTR-B Vs GSTR-1

After considering the above circumstances, any differences in Form GSTR-1 and GSTR-3B that result in a shortage of tax paid by the supplier must be reimbursed along with interest. This reconciliation is needed for every filing period to avoid accruing interest and to ensure that both returns match.

A debit note is issued by the seller when the amount payable by the buyer to seller increases:

  1. Tax invoice has a lower taxable value than the amount that should have been charged
  2. Tax invoice has a lower tax value than the amount that should have been charged

A credit note is issued by the seller when the value of invoice decreases:

  1. Tax invoice has a higher taxable value than the amount that should have been charged
  2. Tax invoice has a higher tax value than the amount that should have been charged
  3. Buyer refunds the goods to the supplier
  4. Services are found to be deficient

Advantages of GSTR-3B vs GSTR-1 Tax Comparison Report

  • Download GSTR-1 and GSTR-3B anytime across months and upload sales ledgers to start comparing data. Verify GST login once using OTP, and continue to easily update data in a click, anytime and anywhere.
  • Check the difference for every field such as outward tax, outward taxable value, supplies under RCM in both returns, etc.
  • Data comparison at a PAN and GSTIN level is available.
  • Know the differences instantly at a monthly, quarterly, or annual level, to take further action.

Frequently Asked Questions

The GSTR 3B is a form created by the GST Council. Taxpayers use it to report their total GST liabilities for a specific tax period. It reports total sales, purchases, input tax credits, and tax payable values.

The GSTR 3B due date is typically the 20th of the following month. For example, the April return is due by May 20th. However, the government may extend this deadline under exceptional circumstances.

The format of GSTR 3B includes sections for reporting outward and inward supplies, input tax credits, and tax payments. It requires details on total sales, taxable value, and tax amounts for CGST, SGST, IGST, and Cess.

GSTR 1 vs. GSTR 3B differ mainly in details and purpose. GSTR 1 is a detailed return that includes invoice-wise details of all outward supplies made in a month. In contrast, GSTR 3B is a summary return for reporting overall tax liabilities and claiming input tax credit.

To file GST 3B accurately, summarise your monthly sales and purchases. Calculate your input tax credit and determine your tax payable. Use this data to correctly fill in the GSTR 3B form and file it by the due date.

You can download a GSTR 3B template from the official GST portal or accounting websites. These templates can help you understand the structure and the required details for filing.

Please complete the GSTR 3B by the last date to avoid penalties and late fees. Additionally, it may need help in claiming input tax credits and affect your GST compliance rating. It’s crucial to file on time to avoid these issues.

A taxpayer must file a GST 3B return monthly, summarising their tax liabilities and credits for that period. Regular filing helps taxpayers pay taxes timely and accurately, keeping them compliant with GST regulations.

Understanding GSTR 3B in GST compliance is essential as it helps summarise tax liabilities and credits. Filing GSTR 3B on time is necessary to follow the rules, avoid fines, and keep a business running smoothly under GST.