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Reconciliation Between GSTR 3B and GSTR 1: Importance, Reasons and Actions

Prakash Matre
Prakash Matre at September 12, 2023

Reconciliation GSTR 3B and GSTR 1

Reconciliation Between GSTR 3B and GSTR 1

Reconciliation between GSTR 3B and GSTR 1 is a very important step as it helps you to reconcile the mismatches between them. However, not performing reconciliation between GSTR 3B and GSTR 1 can result in a show-cause notice from the GST authorities. Moreover, you may not be able to file an accurate Annual GST Return due to the mismatches.

Here in this article we'll provide details of GSTR 3b and GSTR 1:


1. What is GSTR1 and GSTR 3B?

GSTR 3B is a summary return filed by a taxpayer on a monthly basis. Furthermore, GSTR 3B is to be filed by the 20th day of the next month.

GSTR 3B shows supplies during the month together with GST paid, Input Tax Credit availed, and reverse charge purchases etc. Now, you understand what is GSTR 3B.

On the other hand GSTR 1 vs GSTR 3B, GSTR 1 is a monthly/quarterly return that shall be filed by taxpayers. GSTR 1 helps in disclosing details of monthly/quarterly sales and tax liability.

2. Importance of Reconciliation Between GSTR 3B and GSTR 1

Reconciling Form GSTR-1 and 3B plays an important role as it helps in the following manner:

  • It ensures that there is no duplicity or omission of invoices
  • This helps in arriving at an accurate amount of tax that is payable on the sales during the specified period
  • It assists in identifying errors in integrated taxes at the time of filing GSTR 3B

3. Reasons for Mismatches in GSTR 1 and GSTR 3B

Difference between GSTR1 and GSTR 3B, or mismatch on the following basis:

  • Furnishing supplies in GSTR 3B under the wrong head but declaring the same details in GSTR 1 correctly

    For Instance: Furnishing Zero-Rated Supplies under the Table 6A of GSTR 1, but furnishing the details wrongly under Table 3.1(a) in GSTR 3B.

  • Issuing invoices, debit and credit note for a particular month on a later date
  • Supplies made to an unregistered person furnished in GSTR 1 but not in GSTR 3B
  • Tax paid under the wrong head

    For instance, CGST and SGST in place of IGST or vice- versa

  • Tax liability change between GSTR 1 and GSTR 3B filling time
  • Reporting invoices in GSTR 1 and GSTR 3B at different time

    On the above-mentioned mismatches, there can be chances that you may get notices to form GST authorities. Moreover, this can also lead to a penalty plus interest. Hence, it is necessary for you to reconcile GSTR 1 and GSTR 3B.

4. Actions on GSTR 3B and GSTR 1 Reconciliation

Considering the above-stated difference between GSTR1 and 3B resulting in a lesser amount of tax paid. Then in such a case, the GST authorities may give you a show cause notice. In addition to this, you may have to pay the deficit tax amount along with interest.

5. The Bottom Line

Every taxpayer must carry out a reconciliation between GSTR 3B vs GSTR 1 so as to know if there are any discrepancies. Since even a small mismatch between GSTR 3B and GSTR 1 can lead to a hefty amount of penalty that too along with interest. So, taking such a scenario into consideration Masters India created autoTax GST Software. This GST Software ensures that there is no room left for any mistake and mismatch by eliminating human intervention. Thus, ensuring you stay worry-free in terms of your business GST Compliance.

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GST Verification API
GST Verification API integrates with your application to validate GST taxpayer details.

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