Difference between GSTR-1 and GSTR-3B

[Ishita Ramani]

Introduction

Dealers who have registered for GST are required to submit monthly and quarterly returns. These returns are essential to collect data from authorized dealers and forward it to the ITC. Taxpayers file several types of GST returns annually, but this blog will focus on GSTR-1 and GSTR-3B. This article will explore the differences between the two.

What is a GST return?

A company's sales, purchases, output tax, and input tax paid on purchases are all reported in its GST return. Once a GST return is filed, any resulting tax liability (the amount owed to the government) must be paid.

Why GST return filing is important?

Here are some points on why GST return filing is important:

1. As per the GST Act, all businesses registered under GST are required to file GST returns. Failure to comply with this legal obligation can result in penalties and legal repercussions.
2. GST return filing is important to claim Input Tax Credit (ITC). ITC is the tax paid on purchases that can be set off against the tax liability on sales. Filing accurate and timely returns ensures that you claim the right amount of ITC.
3. GST return filing promotes transparency in the tax system. It provides a clear picture of the taxes paid and collected by the business, making it easier for tax authorities to verify the tax liability of businesses.
4. GST return filing is important for the statutory audit of a business. It helps auditors to verify the accuracy of financial statements, reconcile taxes paid and collected, and identify any discrepancies or errors.
5. Timely and accurate GST return filing can help businesses maintain a good reputation among customers, suppliers, and tax authorities. It demonstrates a commitment to compliance and transparency, which can help build trust and credibility.

Difference between GSTR-1 and GSTR-3B

Here are 5 key differences between GSTR-1 and GSTR-3B:

1. Definition of GSTR-1 and GSTR-3B

GSTR-1 return is filed either monthly or quarterly and includes details of all outgoing supplies or turnover. The frequency of filing this return is determined by the business turnover. On the other hand, GSTR-3B is a self-assessment return filed by dealers, which includes information on their purchases and expenses related to both import and export supplies. This return must be filed monthly, regardless of the turnover.

2. Filing Dates of GSTR-1 and GSTR-3B

GSTR-1 must be filed monthly if the company's annual revenue exceeds Rs. 1.50 crore in the previous or current year. The due date for filing GSTR-1 for the current month is the 11th day of the following month. Taxpayers with a turnover of less than INR 1.50 crore may file GSTR-1 quarterly. In this case, the due date for filing GSTR-1 will be on the 30th or 31st of the month following the last quarter. On the other hand, GSTR-3B is filed monthly, and the due date for filing is the 20th day of every month, irrespective of the company's turnover.

3. Tax Payment of GSTR-1 and GSTR-3B

There is no such tax payment is required when filing a GSTR-1 return. However, GSTR-3B can only be filed after the tax liability is paid. If there is a delay in filing the return, the company must pay a penalty.

4. Penalty for Delay in Filing or Not Filing GSTR-1 and GSTR-3B

If a company files GSTR-1 after the due date, a penalty of INR 200 per day (INR 100 each for SGST & CGST) must be paid. If a company files GSTR-3B after the due date, a penalty of INR 20 per day will be charged for a nil return, and a penalty of INR 50 per day will be charged for any added transaction details.

5. The details to be included in GSTR-1 & GSTR-3B return

When preparing the GSTR-1 return, the invoice must include details on both business-to-business and consumer-to-business turnover, as well as exempt supplies, and the export of goods and services during the period for which the return is being filed. The return should also provide an overview of the supplies made during that time period, along with details of account receivables and repayment.

On the other hand, the GSTR-3B return includes information on the turnover, exempt supplies, and exports of goods or services for the month, specifying the taxable value, CGST, SGST, and IGST. Additionally, it should include the total amount of input tax credit available during the month and details on the inward supply that are applicable to the reverse-charge.

Bottom line

It is important for all taxpayers to be familiar with the necessary details and information required for filing GSTR-1 and GSTR-3B returns, including their respective due dates and penalties for late or non-filing. Such knowledge can help ensure that the returns are accurately filed without any gaps or errors, which could otherwise result in receiving a notice from tax authorities or other complications, and prevent any inappropriate filing of returns.