A Guide to GSTR-3B vs GSTR-1: Importance & Report Comparison


Date: 02 Feb 2023

Comparison of GSTR-3B Vs GSTR-1: Importance & Report

Every taxpayer should compare GSTR-3B and GSTR-1 to make sure there are no inconsistencies or gaps that can result in a demand notice from the tax authorities or other problems that might develop and prevent the appropriate filing of annual reports.


GSTR 3-B  - A taxpayer must file a GSTR - 3B monthly summary return by the 20th of the following month or the 22nd or 24th of the month after a quarter. It also includes a provision for the payment of taxes, if any, for the relevant month. GSTR-3B discloses supplies made during the month together with GST to be paid, input tax credit claimed, purchases on which reverse charge is applicable, etc.

GSTR-1 - It is a monthly or quarterly return that taxpayers prepare to provide information about their outgoing supplies for the previous month as well as their tax liability. Here, invoice-wise information must be uploaded so that the government may monitor each transaction. This serves as the foundation for the supply recipient to accept the goods and claim the applicable input tax credit. 

Importance For GST-B Vs GSTR-1

For the following reasons, it is essential to reconcile Form GSTR-3B with Form 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 a large number of taxpayers requesting that they reconcile these amounts.

  • No invoice is missed or reported more than once in either of the returns, thanks to reconciliation.

  • This guarantees that a taxpayer will accurately calculate the output tax due on sales made within a period.  

  • Taxpayers must make sure that the total of the supplies listed in GSTR-1 and GSTR-3B match as of January 1, 2021. The GSTIN may be suspended if this happens.

  • Interest may be charged on any late GST liability declaration.

  • The government would benefit from reconciliation by being able to distribute the appropriate amount of tax income to the affected states. This reconciliation is especially helpful for finding any mistakes that were made when entering the specifics of integrated taxes for the GSTR-3B file.

  • The GSTR-1 serves as the foundation for supply recipients to claim input tax credits when submitting their returns. Therefore, a timely and precise declaration must be made in both the GSTR-1 and GSTR-3B forms in order to prevent complications with recipients down the road and to guarantee that only true input tax credit may be claimed.

Reconciliation At The Time Of Filing Of Annual Returns - A reconciliation of outward supplies is necessary when submitting an annual return in Form GSTR-9 to make sure 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 is interconnected, it is crucial that GSTR-1 and GSTR-3B match because 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:

  • Supplies that are correctly reported when they are declared in GSTR-1 invoice-by-invoice but are reported under the incorrect table in GSTR-3B. For instance, appropriately reporting zero-rated sales in Table 6A of GSTR-1 but reporting them wrongly in Table 3.1(a) of GSTR-3B.

  • Mismatches may occur if an invoice is issued in one month, but a debit or credit note is issued at a later time.

  • Supplies made between states to unregistered individuals are not reported in GSTR-3B but are reported 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.

In order to prevent interest from accruing that would be due at a later time and to verify that both returns match, it is required to perform this reconciliation for each filing period.

How Can Busy Help You?

For the purpose of preparing GST returns, busy accounting software makes it simple to import and download GST data. It offers a user a range of choices for ingesting data to generate the GSTR-1 or any other return quickly.

For importing sales or purchase data into Busy accounting software, options include excel ingestion or direct interaction with ERP. The user only needs to import the sales information for GSTR-1 once. Based on this, the software instantly auto-populates the information into GSTR-3B with a click.

You can use Busy accounting software for GSTR-1 and GSTR3-B reconciliation. It reduces the chances of future litigation. It helps avoid GSTIN Suspension: Outward supplies declared in GSTR-1 must match with the summary total of supplies declared in GSTR 3B. In case of mismatches, GSTIN may be suspended.

Advantages Of GSTR-3B Vs GSTR-1 Tax Comparison Report

  • To begin comparing data, download GSTR-1 and GSTR-3B at any moment throughout any month and upload sales ledgers. Once you've used OTP to confirm your GST login, you can easily change your data with a click from any location at any time.

  • Verify the differences in each field, including the outgoing tax, the outgoing taxable amount, the supplies reported under RCM in both reports, etc.

  • It is possible to compare data at the PAN and GSTIN levels.

  • To take additional action, be quickly aware of discrepancies at a monthly, quarterly, or annual level.

Reconciliation Between GSTR-3B and GSTR-1 

If any inconsistencies between Form GSTR-3B and GSTR-1 across months are discovered after taking into account the above situations. The taxpayer must pay the unpaid tax obligation plus any applicable interest or penalties.

To ensure that the information provided reconciles, it is crucial to reconcile between GSTR-3B and GSTR-1 throughout each reporting period. Additionally, this will assist the taxpayer when submitting their annual GST return because the entire system for filing returns is interconnected under GST. Any discrepancy could result in fines, penalties, or even the termination of their GST registration.