GSTR-1/3B Matching for Marketplace Sellers: Reconciliation Checklist
Marketplace sellers in India face unique challenges reconciling their outward supplies, marketplace sales, and returns. Proper matching between GSTR‑1 and GSTR‑3B ensures accurate GST compliance and reduces the risk of notices. This checklist walks you through what to track, where mismatches often occur, and how to fix them.
Why matching GSTR 1 and GSTR 3B matters
Matching these returns shows that what you reported in GSTR 1 (outward supplies) aligns with what you reported in GSTR 3B (tax paid). For marketplace sellers this becomes more complex because of indirect supplies, mixed payment flows, returns, and platform settlements.
Maintaining alignment helps avoid interest, penalties, or GST audit notices. It builds accurate liability books and ensures that input tax credits and output tax balances are credible.
Key areas to track in the reconciliation
A good reconciliation process looks at data from sales, returns, platform statements, ledger entries, and tax reports. Tracking these areas reduces surprises at filing time.
- Outward supplies by supply type (taxable, exempt, nil-rated)
- Supplies through marketplace operators vs direct
- Returns, cancellations and credit notes issued
- TCS (Tax Collected at Source) entries for marketplace supplies
- Settlement deductions and fees charged by marketplaces
- Payment mode split (COD vs prepaid) and tax impact
- Place of supply (state vs inter-state) for correct IGST/CGST-SGST split
- Input tax credits claimed and reversed correctly
- GST liability shown in GSTR 3B and tax paid via electronic cash ledger
Monthly data collection checklist
Gathering accurate and complete data each month makes reconciliation faster and more reliable. Use this as your steady monthly routine.
- Download marketplace settlement file with gross sales, returns, fees, TCS, and net amount.
- Extract credit notes or return sheets for the same period.
- Pull your sales register in the accounting system by marketplace and date.
- Pull the auto-posted tax ledger details in your accounting software.
- View the electronic cash ledger in the GST portal to see tax paid and balance.
- Extract GSTR 1 report for outward supplies (B2B, B2C, nil/exempt) and cross validate with system register.
- Extract GSTR 3B return figures for output tax, input credits, and tax paid.
- Prepare a tracking sheet with all figures for quick comparison (sales, returns, net value, tax, paid tax).
GSTR 1 to accounting system matching
This step ensures what you report to GST aligns with your ledger and sales booking. Discrepancies here often cascade into bigger mismatches.
- Match total outward taxable supplies (from system) to GSTR 1 column 3 sum.
- Verify that exempt or nil rated supplies in GSTR 1 reflect accurately in your register.
- For marketplace supplies, confirm the correct value has been reported under UASL or applicable headings.
- Confirm place of supply calculations so IGST, CGST/SGST splits are correct.
- Cross check that credit notes or returns for the period are excluded from the value you report.
GSTR 3B to accounting system matching
Your tax liability, payments, and input tax credits must match what you report in GSTR 3B. This ensures your tax payment and filings are consistent.
- Check your output tax ledger to ensure the CGST, SGST, IGST figures match the values in GSTR 3B line 4.
- For supplies through marketplace, ensure TCS amounts are captured appropriately in the cash ledger.
- Confirm input tax credits claimed match your eligible invoices and none are duplicated.
- Verify that tax paid via cash ledger or electronic payment is reflected correctly in GSTR 3B line 4A.
- Reconcile any tax reversal entries (e.g., for exempt supplies, composition scheme, or non-business use) and ensure they are in your books and reflected in filings.
Settlement to tax filings matching for marketplace sellers
Marketplace operators add an extra dimension with fees, adjustments, TCS, and net payout. Aligning your settlement with tax filings ensures comprehensive compliance.
- Compare the marketplace settlement gross sales value with your accounting sales register for the same period.
- Subtract returns and cancellations to arrive at net taxable value.
- Ensure the TCS deducted by the marketplace is recorded in your books and shows in the electronic cash ledger.
- Watch for fees and service charges that reduce your settlement but not your tax base. Ensure they are treated correctly in your accounting (expense vs part of tax base).
- Confirm that the net value from settlement maps to the net supplies value you reported in GSTR 1 for marketplace supplies.
Returns and credit notes – reconciliation focus
Returns and credit notes often cause mismatches between the system, statement, and filings. Treat them carefully so your net numbers stay accurate.
- Issue credit notes in your accounting system for all returns and cancellations in the period.
- Reduce the taxable base for those supplies so your GSTR 1 matching remains valid.
- Link settlement return lines in marketplace statement to your credit notes so you don’t omit anything.
- Check that the tax reduction is reflected in GSTR 3B through lower output tax or reversal as applicable.
- Ensure TCS base is adjusted for net value post returns as required for marketplace supplies.
Common mismatches and how to fix them
Some errors keep recurring. Identifying these early helps you build controls and avoid repeat audits.
- Gross sales included instead of net (after returns) in GSTR 1 – adjust before filing.
- Uses of wrong place of supply or wrongly split IGST vs CGST/SGST – correct in system map.
- Fees charged by marketplace treated as part of taxable value – instead treat them as expenses and prorate correctly.
- Missing or delayed settlement entries lead to differences in tax base – ensure monthly capture.
- TCS amounts not posted or matched with cash ledger – reconcile each month.
- Input credits claimed from non-business or exempt supplies – audit the ledger and clean before filing.
Using a monthly reconciliation template
- A standard spreadsheet or template helps everyone stay aligned. Use it every month before you file your returns.
- Create columns for: Gross sales, Returns, Net taxable value, Output tax, TCS deducted, Net payout.
- Add ledger figures: Output tax posted, Input tax credits, Cash ledger tax payments.
- Add filing data: GSTR 1 taxable value, GSTR 3B output tax, GSTR 3B tax paid.
- Highlight variances and assign tasks for any gap over a small tolerance (say 1 %).
Save monthly templates for historical trend analysis and audit readiness.
Where BUSY Recom save time
When multiple marketplaces, high order volumes and many fee deductions become the norm, manual reconciliation slows down everything. BUSY Recom automates settlement matching, order-level tag-back, and fee analysis so your tax reconciliation becomes far quicker.
It pulls in settlement files, matches your sales and credit note data, aligns TCS deductions to your cash ledger and flags mismatches early. You get ready dashboards for marketplace gross, returns, net value, and tax impact. This leaves more time for decision-making and less time for chasing spreadsheets.
Conclusion
For marketplace sellers, perfectly matching your accounting system, marketplace settlements, and GST filings is not optional—it is needed. Follow your monthly data collection, post accurate entries, reconcile GSTR 1 and GSTR 3B and adjust for returns, TCS and fees. With the right checklist and the automation support of BUSY Recom you minimise error risk, reduce audit exposure and keep your close process smooth.
I’m Fazeel Zaidi, a Chartered Accountant based in Prayagraj with 8 years of experience. I specialize in GST and Audits, helping businesses stay compliant and audit-ready. With a B.Com background, I focus on practical, clear guidance that simplifies regulations and supports better decision-making.