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

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GSTR3B Vs GSTR1

To  file GSTR-3B , taxpayers must submit a monthly summary return by the 20th of the following month. They can also file by the 22nd or 24th of the following quarter. The return also includes a provision for paying taxes for the relevant month, if any. GSTR-3B shows sales, GST owed, tax credits, purchases subject to reverse charge, etc., for the month.

GSTR-1  – is a form that taxpayers fill out regularly to report their sales and taxes owed. Employees fill it out every month or quarter. They report their sales for the previous month and the taxes they owe. Here, you must upload invoice-wise information so the government can monitor each transaction. This information enables the supply recipient to accept the goods and  claim the applicable input tax credit .

GSTR 1 and GSTR 3B difference

What is GSTR 1

GSTR 1 is the GST return where a business reports all its outward supplies for a tax period. It captures invoice wise details of sales made to both businesses and consumers, along with any debit or credit notes and amendments.

Depending on turnover, GSTR 1 is filed monthly or quarterly. For most regular taxpayers it is due on or around the eleventh of the following month, while small taxpayers under the QRMP scheme can file it quarterly.

This return is the base for the buyer input tax credit, because the details uploaded in GSTR 1 flow into the recipient GSTR 2B or 2A for ITC claim.

What is GSTR 3B

GSTR 3B is a summary return in which a taxpayer declares total outward supplies, inward supplies, input tax credit and net tax liability for a tax period. Unlike GSTR 1, it does not contain invoice wise data. It presents consolidated values for different types of supplies and ITC.

GSTR 3B is generally filed monthly, with an option of quarterly filing for eligible small taxpayers. Tax payment must be completed before filing this return, because GSTR 3B is treated as a self assessed statement of tax liability. Any delay in filing can lead to late fees and interest on outstanding tax.

Key differences between GSTR 1 and GSTR 3B

Although both returns are linked, they serve different purposes and capture different levels of detail.

Purpose of each return

  • GSTR 1 is meant to report detailed outward supplies and acts as a sales statement.
  • GSTR 3B is meant to declare overall tax liability, ITC and net tax payable for a period.

Filing frequency and due dates

  • GSTR 1 can be monthly or quarterly depending on turnover. Large taxpayers file monthly and small taxpayers under QRMP file quarterly.
  • GSTR 3B is typically filed monthly with an option for quarterly filing under QRMP, and is due later in the month than GSTR 1 for the same period.

Level of details reported

  • GSTR 1 contains invoice wise details of B2B, B2C, export and deemed export supplies, along with amendments and credit or debit notes.
  • GSTR 3B captures only summary figures of taxable value, exempt and nil rated supplies, reverse charge supplies, outward tax liability and eligible ITC.

Tax payment and ITC treatment

  • GSTR 1 is only a reporting return and no tax payment is made at the time of filing.
  • GSTR 3B requires payment of tax before filing and ITC claimed here is used to offset the output tax liability declared.

Late fees and impact of delay

  • Delayed GSTR 1 filing attracts late fees per day per Act, subject to prescribed caps.
  • Delayed GSTR 3B filing triggers late fees plus interest on any unpaid tax, which can sharply increase the cost of non compliance.

Importance of GSTR-3 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 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.

Reconciliation between GSTR 1 and GSTR 3B

Reconciliation means comparing figures in GSTR 1 and GSTR 3B to make sure your outward supplies and tax liability match across both returns for every period.

The main objective is to ensure that what you report as sales invoice wise in GSTR 1 is the same as what you summarise and pay tax on in GSTR 3B. When these two returns are aligned, the risk of notices, interest, GSTIN suspension and disputes with customers reduces.

It also ensures that the ITC flowing to your customers through GSTR 2B is correct, which helps maintain good relationships with buyers and avoids disputes over mismatched invoices.

How to reconcile GSTR 1 and GSTR 3B (step by step)

You can follow a simple practical flow for each tax period:

  1. Match outward taxable value
    Compare total outward taxable value in GSTR 1 for the period with the corresponding outward supplies section in GSTR 3B. Any difference should be traced back to missing invoices, double reporting or wrong tax heads.
  2. Verify tax amounts by head
    Check that CGST, SGST and IGST amounts computed from GSTR 1 match the tax liability you have declared and paid in GSTR 3B. Pay special attention to classification of supplies as inter state or intra state.
  3. Check amendments and credit or debit notes
    Confirm that all amendments and credit or debit notes reported in GSTR 1 have been properly adjusted while calculating tax liability in GSTR 3B for the relevant month.
  4. Correct differences in subsequent returns
    Where you find short payment of tax, pay the difference along with applicable interest in the next GSTR 3B. If excess liability has been reported earlier, adjust it in line with GST provisions in future returns.

Keep a record of reconciliations
Maintain working papers or system generated reports that show how you reconciled GSTR 1 and GSTR 3B period wise. This helps in answering department queries and simplifies annual return preparation.

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.

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.

Practical checklist before filing GSTR 1 and GSTR 3B

You can add this section toward the end, just before “How Can BUSY Help You”.

Before filing GSTR 1

  • Ensure all sales invoices, credit notes and debit notes for the period are entered and correctly classified as B2B, B2C, exports and exempt supplies.
  • Verify GSTINs, invoice numbers, taxable values and tax rates to reduce the chances of buyer side ITC issues.
  • Recheck amendments to previous periods so you do not miss or double report any supply.

Before filing GSTR 3B

  • Reconcile outward supplies with GSTR 1 figures for the same period.
  • Confirm that ITC claimed matches invoices available in GSTR 2B for that period and is eligible under GST law.
  • Cross check cash ledger and credit ledger balances so that tax payment is sufficient and no additional interest becomes payable later.

How Can BUSY Help You?

BUSY software makes importing and downloading GST data simple for preparing  GST returns . It offers a user a range of choices for quickly ingesting data to generate the GSTR-1 or any other return. Options for importing sales or purchase data into  BUSY accounting software  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  GST accounting software  for GSTR-1 and GSTR-3B reconciliation. It reduces the chances of future litigation and helps avoid GSTIN Suspension. Outward supplies declared in GSTR-1 must match the summary total declared in GSTR 3B. In case of mismatches, GSTIN may be suspended.

Advantages Of GSTR 3B Vs GSTR 1 Tax Comparison Report

Given below are some of the advantages of GSTR-3B Vs GSTR-1 Tax Comparison Report:

  • To compare 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.
  • 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 monthly, quarterly, or annual discrepancies.
  • Reconciliation Between GSTR-3B and GSTR-1.
  • Suppose you discover any inconsistencies between Form GSTR-3B and GSTR-1 months after considering the above situations. The taxpayer must pay the unpaid tax obligation plus any applicable interest or penalties.
  • Make sure the information matches up. It’s important to reconcile GSTR-3B and GSTR-1 regularly. It will help taxpayers when they file their annual GST return because the filing system is connected under GST. Any discrepancy could result in fines, penalties, or even the termination of their GST registration.

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How to Use the GSTR-3B vs GSTR-1 Tax Comparison Report

The GSTR-3B vs GSTR-1 Tax Comparison Report helps businesses reconcile their tax liabilities and ensure compliance with GST regulations. It compares the tax values reported in GSTR-1 (sales details) with those declared in GSTR-3B (summary return). Discrepancies, if any, are highlighted for correction. To use the report effectively:

  1. Access the Report: Log in to your GST portal or software and navigate to the comparison section.
  2. Upload Data: Upload GSTR-1 and GSTR-3B details for the relevant period.
  3. Review Discrepancies: Analyze any mismatches in taxable value, tax amounts, or input tax credits.
  4. Correct Errors: Make necessary adjustments in subsequent returns to ensure accurate reporting.

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Conclusion

GSTR-1 and GSTR-3B are meaningful returns that businesses must file correctly and on time to follow GST rules. GSTR-1 shows what the taxpayer sells, while GSTR-3B summarises all sales, purchases, taxes owed, and credits claimed. The reports generated from each return provide crucial information to businesses and the government for decision-making and analysis. Businesses must know the differences between the returns and file them correctly to avoid penalties or interest charges. Compliance with GST regulations can help companies maintain their credibility and reputation in the market.

Apurva Maheshwari
Apurva Maheshwari
Chartered Accountant
MRN No.: 445615
City: Agra

I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.

Frequently Asked Questions

  • What are the most common reasons for mismatches between GSTR-1 and GSTR-3B?
    Mismatches often happen due to errors in invoice data, missing entries, wrong tax amounts, or delays in updating returns. These differences can lead to notices or penalties if not corrected quickly through reconciliation.
  • How can software like BUSY simplify GSTR-3B vs GSTR-1 reconciliation?
    BUSY software helps match invoices, compare tax amounts, and find errors automatically. It reduces manual work and ensures accurate return filing, helping businesses avoid mismatches and GST notices.
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