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

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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.

Latest Updates!

Updates as on 22nd December 2020 1. Rule 21 Amended: If the outward supplies reported in Form GSTR-1 are in excess of the outward supplies reported in the GSTR-3B for the said tax period, the GSTIN can be cancelled. 2. Rule 21A(2A) Inserted: If there are significant differences in outward supplies between GSTR-3B & 1, or inward supplies between GSTR-3B & 2B, in contravention of Act/Rules, the said taxpayer’s GSTIN could be suspended 3. Rule 59(5) Inserted: The GSTR-1 for the current tax period cannot be filed or the IFF cannot be used if: a) The GSTR-3B was not filed for the preceding two months in case of monthly GSTR-1 filers b) GSTR-3B was not filed for the preceding tax period in case of quarterly GSTR-1 filers, or in cases where Rule 86B is violated 4. Rule 138E Amended: Now, e-way bills cannot be generated if the GST registration has been suspended on account of the taxpayer’s GSTIN liable for cancellation under sub-rule (2) of Rule 21A or on account of significant differences/ anomalies between the GSTR-3B & 1/2B Update as on 15th October 2020 The CBIC has notified the due dates for furnishing GSTR-1 from October 2020 to March 2021
For businesses with turnover Month/Quarter Due Date
More than Rs.1.5 crore October 11th November 2020
November 11th December 2020
December 11th January 2021
January 11th February 2021
February 11th March 2021
March 11th April 2021
Turnover up to Rs.1.5 crore Oct-Dec 2020 13th January 2021
Jan-Mar 2021 13th April 2021

1. GSTR-3B vs GSTR-1

GSTR – 3B is a monthly summary return filed by a taxpayer by the 20th of the next month. 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.

2. 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:
  • The total GST collections disclosed at the end of the year 2017-18 showed a mismatch of several thousand crores. 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.
  • 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.

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

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.
Due to the reasons mentioned above, the Government noticed a difference for the year 2017-18 running into tens of thousands of crores; this has resulted in notices being sent to taxpayers asking for an explanation for these differences.

4. Action to be taken 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.

5. 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, GSTR-3B or GSTR-4 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 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.

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

    • Download GSTR-1 and GSTR-3B anytime across months 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.

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

-Login to the Cleartax GST AccountGo to the ‘Reports’ section, click on view ‘Health Check Report’, click ‘Generate Report’. Health Check Report Enter GSTN credentials and get the detailed GSTR-3B v/s GSTR-1 Report in Excel format. Health Check Report You can alternatively download the ‘GSTR-3B vs GSTR-1 Tax Comparison Report’ to get the graphical comparison of data at a glance. You can easily identify and reconcile mismatches using this 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 “Refresh 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. GSTR-3B vs GSTR-1 GSTR-3B vs GSTR-1 You can also download the report in excel format by clicking on “Download report in excel” to use and share the report in excel form. The Health Check Report also gives you the following results- Try out the GST health check tool and check your GSTIN’s health now!