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

Updated on:  

08 min read

Comparing GSTR-3B with GSTR-1 is a much-needed process to be undertaken by every taxpayer in order to ensure that there are no variations or gaps, which could, in turn, lead to a demand notice from the tax authorities or unwanted issues that may arise and hinder the accurate filing of the annual returns.

GSTR-3B vs GSTR-1

GSTR – 3B is a monthly summary return filed by a taxpayer by the 20th of the next month or 22nd/24th of month following a quarter. GSTR-3B discloses supplies made during the month along with GST to be paid, input tax credit claimed, purchases on which reverse charge is applicable, etc., and also makes a provision for the payment of taxes, if any, for the relevant month. 

GSTR – 1 is a monthly or quarterly return filed by taxpayers to disclose details of their outward supplies for the month – along with their tax liability. Here, invoice-wise details are to be uploaded so that the Government can keep a check on every transaction. This forms the basis for the recipient of supplies to accept the same and take the eligible input tax credit.

Importance for GSTR-3B vs GSTR-1

It is important to reconcile form GSTR – 3B and Form GSTR – 1 on account of the following reasons:

  • Time and again, GST authorities have issued show cause notices to a large number of taxpayers asking them to reconcile the total of sales disclosed in the GSTR-3B summary return and the detailed GSTR-1 return.
  • Reconciliation ensures that no invoice is omitted or recorded more than once in either of the returns.
  • This ensures a taxpayer to arrive at an accurate amount of output tax payable on the sales made in a period.
  • From 1st January 2021, taxpayers must ensure that supplies declared in GSTR-1 must match the summary total of supplies declared in GSTR-3B. Otherwise, the GSTIN may be suspended.
  • Any late declaration of GST liability can also attract interest.
  • Reconciliation would also help the Government to allocate the right share of tax revenue to the concerned states. This reconciliation is specifically useful to identify any errors that have been made when entering the details of integrated taxes while filing GSTR-3B.
  • GSTR-1 forms the base for the recipients of supplies to claim input tax credit while filing their returns. Hence, a timely and accurate declaration in both GSTR-1 and GSTR-3B is necessary, to avoid hassles with recipients at a later date, and also ensure that only genuine input tax credit can be claimed.

Reconciliation at the time of filing of Annual return: At the time of filing an Annual return in Form GSTR – 9, a reconciliation of outward supplies is a must to ensure that the details disclosed match the details disclosed in GSTR-1 and GSTR-3B, across all months. Details of tax paid during the year need to be mentioned as well and this must tally with the total taxes disclosed and paid in GSTR-3B. 

Therefore, it is important that GSTR-1 and GSTR-3B match as the return-filing system is integrated and a mismatch between the same could result in improper disclosure in the annual return.

Reasons for mismatches in GSTR-3B vs GSTR-1

Most commonly, the details disclosed in Form GSTR – 3B  and GSTR – 1 may not reconcile on account of the following reasons:

  • Reporting of supplies under the wrong table in GSTR-3B, but correctly reporting the same when declaring it invoice-wise in GSTR-1. For example: Reporting zero-rated sales correctly in Table 6A of GSTR-1, but incorrectly reporting it under Table 3.1(a) in GSTR-3B.
  • Issue of an invoice in a particular month, and issue of a debit or credit note at a later date could lead to mismatches.
  • Inter-state supplies made to unregistered persons omitted in GSTR-3B but declared in GSTR-1.
  • Value of supplies correctly shown but tax paid under the wrong head. For example, IGST instead of CGST & SGST or vice- versa.
  • Supplies that may have been amended after GSTR-1 has been filed. In other words, any change of tax liability between the time of filing GSTR-1 and GSTR-3B.
  • The time difference in reporting of invoices in GSTR-1 and GSTR-3B.

Actions on Reconciliation of GSTR-3B vs GSTR-1

After considering the situations mentioned above, if any discrepancies are found in Form GSTR – 1 and GSTR -3B across months leading to any shortage of tax paid by the supplier, the same must be paid along with interest. 

It is, therefore, necessary to conduct this reconciliation for every filing period to ensure that both the returns match, which wouldn’t give rise to any interest that may become payable at a later date.

How can ClearTax GST help you?

ClearTax GST offers easy imports and downloads of GST data for preparation of GST returns. It provides various options for a user to ingest data to prepare the GSTR-1, or any other return in under minutes. 

Options like excel ingestion or direct integration with ERP are available for importing sales or purchase data into ClearTax GST software. A user has to import the sales data for GSTR-1 just once. Based on this, the software auto-populates the details into GSTR-3B in a click of a button. 

Thus, one can avoid errors and ensure 100% accuracy in reporting of data with minimal manual intervention. ClearTax GST also provides useful insights under the Health Check Report Tool, so you can now speed through the journey of GST compliance in a hassle-free way! 

One such report that helps you compare GSTR-1 with GSTR-3B is the ‘GSTR-3B vs GSTR-1 vs Books Comparison Report’. The comparison report can be obtained for any time period. Even if the user has not filed the return on the ClearTax GST software in the past, the  report section will allow the user to download this data from the GST Portal, and compare the same. 

This report will help the user compare the supplies reported in GSTR-1 along with the data reported in GSTR-3B, before filing GSTR-3B thus avoiding any evident errors. Further, you can compare the data month-wise or for every financial year. You can also compare data at a GSTIN level or cumulatively at a PAN level.

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.

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

Login to the Cleartax GST Account. Under the ‘Reports’ section, click on the report ‘GSTR-3B vs 1 vs Books report.

If GSTR-1 and GSTR-3B are both filed using ClearTax’s GST software, then the report is automatically displayed. However, if the ClearTax software hasn’t been used before, then click on the button “Download data from GSTN” appearing on the right-hand side of the report section. The yearly data from the GSTN will be fetched after verification via OTP-based login credentials.

You can easily identify and reconcile mismatches using this report. 

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