Difference Between GSTR 1 and GSTR 3B
Difference Between GSTR 1 and GSTR 3b
Understanding the various tax returns is essential for businesses operating under the Goods and Services Tax (GST) regime in India to ensure compliance and avoid penalties. Among the numerous returns taxpayers must file, GSTR-1 and GSTR-3B are the most crucial. While both serve important purposes in the GST filing process, they differ significantly in content, frequency, and function. This article provides an in-depth comparison, highlighting the key difference between GSTR 1 and GSTR 3b and the importance of reconciling the two.
Ensure accurate and timely GST return filing with IndiaFilings. Let our experts handle your GSTR-1 and GSTR-3B flings so you can focus on growing your business.
File Now!What is GSTR-1?
GSTR-1 is a detailed return that businesses must file to report their outward supplies or sales for a specific tax period. It includes information on all the goods and services supplied by the business, whether to other businesses (B2B) or to consumers (B2C). GSTR-1 must be filed either monthly or quarterly, depending on the taxpayer’s turnover.
GSTR-1 captures comprehensive details of all sales transactions, including invoices, debit/credit notes, and any modifications made to previous supplies.
The return focuses solely on outward supplies, providing a clear record of the revenue generated by the business.
What is GSTR-3B?
GSTR-3B is a summary return that businesses file to declare their monthly tax liabilities. It is a simplified return that provides a summary of sales, purchases, and input tax credit (ITC) claimed during the month. Unlike GSTR-1, which offers detailed transaction-level information, GSTR-3B gives an overview of the taxpayer’s total turnover and tax liabilities.
Click here to learn more about GSTR-3B
Key Differences Between GSTR-1 and GSTR-3B
GSTR-1 and GSTR-3B differ primarily in their content and filing frequency. GSTR-1 provides detailed information about outward supplies and can be filed either monthly or quarterly, depending on the business’s turnover. In contrast, GSTR-3B is a monthly summary return that offers an overview of both sales and purchases. GSTR-1 is essential for reconciling outward supplies, while GSTR-3B serves as a self-assessed summary return. Here are the key differences between GSTR-1 and GSTR-3B:
Purpose:
- GSTR-1: Used for reporting outward supplies and ensuring that the details match the recipient’s records.
- GSTR-3B: Used for declaring and paying monthly tax liabilities.
Who Should File GSTR-1 and GSTR-3B?
- All registered taxpayers who make outward supplies (sales) are required to file GSTR-1.
- Regular taxpayers must file GSTR-3B every month, regardless of whether they have made any outward supplies during the tax period. Small taxpayers with a turnover of up to Rs. 1.5 crores have the option to file GSTR-1 quarterly, while those with a turnover exceeding Rs. 1.5 crores are required to file it monthly.
Due Date for Filing GSTR-1 and GSTR-3B:
GSTR-1:
Monthly Filing: If a company’s annual revenue exceeds Rs. 1.50 crore in the previous or current financial year, GSTR-1 must be filed monthly. The due date for filing GSTR-1 is the 11th day of the following month.
Quarterly Filing: For taxpayers with an annual turnover of less than INR 1.50 crore, GSTR-1 can be filed quarterly. The due date for filing, in this case, is the 30th or 31st day of the month following the last quarter.
GSTR-3B:
GSTR-3B must be filed monthly by the 20th of the following month. For example, the GSTR-3B for August should be filed by the 20th of September. However, small taxpayers with an aggregate turnover of up to Rs. 5 crores have the option to file GSTR-3B on a quarterly basis.
Additionally, the tax liability will auto-populate from GSTR-3B to GSTR-1 when filing returns.
Tax Payment of GSTR-1 and GSTR-3B:
When filing a GSTR-1 return, no tax payment is required as it only involves reporting the details of outward supplies. However, GSTR-3B requires the payment of tax liability before filing. If there is a delay in filing GSTR-3B, the company will incur penalties for late submission.
Penalty for Delay in Filing or Not Filing GSTR-1 and GSTR-3B:
GSTR-1: If a company files GSTR-1 after the due date, a penalty of INR 200 per day (INR 100 each for SGST & CGST) is applicable until the return is filed.
GSTR-3B:
- For a nil return, if GSTR-3B is filed after the due date, a penalty of INR 20 per day will be charged.
- For returns with any added transaction details, the penalty increases to INR 50 per day.
These penalties continue to accrue until the return is filed.
Details to be Included in GSTR-1 & GSTR-3B Returns:
GSTR-1:
- Invoice Details: Must include information on business-to-business (B2B) and consumer-to-business (B2C) transactions.
- Exempt Supplies: Details of any exempt supplies during the period.
- Exports: Information on the export of goods and services.
- Overview of Supplies: A summary of all supplies made during the period.
- Account Receivables and Repayment: Details related to outstanding receivables and any repayments during the period.
GSTR-3B:
- Turnover: Includes the total turnover for the month.
- Exempt Supplies: Information on exempt supplies.
- Exports: Details on the export of goods or services.
- Tax Details: Specifies the taxable value and amounts for CGST, SGST, and IGST.
- Input Tax Credit (ITC): The total input tax credit available during the month.
- Inward Supply under Reverse Charge: Details of inward supplies where the reverse charge mechanism is applicable.
Reconciliation Between GSTR-1 and GSTR-3B
One of the most critical aspects of managing GST compliance is ensuring that the details reported in GSTR-1 and GSTR-3B are consistent. Reconciliation plays a vital role in this process.
What is Reconciliation?
Reconciliation is comparing the data reported in GSTR-1 with that in GSTR-3B to identify and rectify any discrepancies. This comparison ensures that the details of outward supplies, tax liabilities, and input tax credit (ITC) are accurately reflected in both returns.
Why is Reconciliation Important?
Discrepancies between GSTR-1 and GSTR-3B can lead to several issues, including incorrect tax payments, potential interest liabilities, and penalties from tax authorities. Reconciliation helps in:
- Identifying Omissions or Duplications: Ensuring no invoice is omitted or recorded more than once.
- Ensuring Correct Tax Payment: Verifying that the correct tax amount is paid under the appropriate tax head (CGST, SGST, IGST).
- Preventing GSTIN Suspension: As per recent regulations, mismatches between GSTR-1 and GSTR-3B could lead to the suspension of the GSTIN, making reconciliation essential to avoid such consequences.
How to Reconcile GSTR-1 and GSTR-3B?
To ensure compliance and accuracy, businesses should perform reconciliation regularly, preferably before filing GSTR-3B. This process involves:
- Comparing Invoice Details: Check that all invoices reported in GSTR-1 are also reflected in GSTR-3B.
- Verifying Tax Payments: Ensure that the tax liabilities calculated in GSTR-3B match the totals from GSTR-1.
- Correcting Discrepancies: If any mismatches are found, they should be corrected immediately, and any shortfall in tax payment should be addressed along with any applicable interest.
For more details on GSTR 1 and GSTR 3b Reconciliation, Click here
Key Differences Between GSTR-1 and GSTR-3B
The table below summarizes the primary differences between GSTR 1 and GSTR 3B, highlighting their distinct roles in the GST filing process.
| Aspect | GSTR-1 | GSTR-3B |
| Content | Detailed information about outward supplies, including invoices, debit/credit notes, and modifications. | Summary of sales, purchases, and tax liabilities without detailed transaction-level data. |
| Purpose | Used for reporting outward supplies and ensuring that details match the recipient’s records. | Used for declaring and paying monthly tax liabilities. |
| Filing Frequency | Monthly for businesses with a turnover exceeding Rs. 1.5 crore quarterly for those with a turnover of up to Rs. 1.5 crore. | Filed monthly by all taxpayers, with an option for small taxpayers to file quarterly. |
| Reconciliation | Reconciliation with the recipient’s GSTR-2A needs to ensure consistent transaction details. | It is not directly used for reconciliation but helps summarise tax liabilities, which are later verified against GSTR-1 and GSTR-2A. |
| Tax Payment | No tax payment is required when filing GSTR-1. | Tax payment is mandatory before filing, as GSTR-3B involves self-assessment of GST liabilities. |
| Penalties for Late Filing | INR 200 per day (INR 100 each for SGST & CGST) if filed after the due date. | If filed late, INR 20 per day for nil returns and INR 50 per day for returns with transaction details. |
Conclusion
Understanding the differences between GSTR 1 and GSTR 3B is vital for every taxpayer under the GST regime. While GSTR-1 provides a detailed report of outward supplies, GSTR-3B offers a summary of the month’s sales, purchases, and tax liabilities. Regular reconciliation between these two returns helps ensure accuracy, compliance, and smooth tax filing processes.
Streamline your GST return filing process with IndiaFilings. Our experts are here to help you file GSTR-1 and GSTR-3B and ensure accurate reconciliation. Get started today for hassle-free GST compliance!
File Now!