Difference or Gaps between 3B & GSTR-1 & their resolution

Difference or Gaps between 3B & GSTR-1 & their resolution : Huge Data Gaps between 3B & GSTR-1 have been a matter of concern for businessentities. Even in 26th GST Council meeting, it was held that there are major data gaps between self-declared liability in FORM GSTR-1 and FORM GSTR-3B. Some of reasons Difference or Gaps between 3B & GSTR-1: 1. One of the main reason of the difference is, wrong calculation of revenue & tax liability at the time of filling GSTR-3B

• For a large business organisation, it is very common to have difference in Actual turnover & the turnover recorded in books.
• This may result in GST liability if turnover as recorded in books of Accounts is less than the actual turnover.
• Again this may result in late payment of GST, which may lead to applicability of interest.
• Nominal difference in is still accepted, but large data gaps is matter of concern because this can result in heavy interest liabilty

2. Another reason is change in tax liability between the time of filing of GSTR-3B & GSTR-1

• GSTR-3B is usually filed on 20th of next month & therefore, there is a gap between date of filing of GSTR-1 & GSTR-3B
• For a business house, it is very common to issue debit/credit note during that period which may result in late payment of GST.
• Change in input or wrong calculation of input may also lead to change in GST liability.

Suggestion from author in case of Difference or Gaps between 3B & GSTR-1:

• As per Circular No. 7/7/2017-GST dated 01st September 2017 addressing issue ofSystem based reconciliation of information furnished in FORM GSTR-1 and FORM GSTR-2 with FORM GSTR-3B :

In case the registered person intends to amend any details furnished in FORM GSTR3B, it maybe done in the FORM GSTR-1 or FORM GSTR-2, as the case may be. This circular also addresses the issue that any difference in tax liability can be settled in GST 3, but after payment of interest. This mechanism suggested by CBEC in this circular has not been very successful, because of huge time gap between filing of GSTR-3 & 3B which has resulted in huge accumulation of interest.

• There is also a possibility that the pending tax liability should be admitted in next month return along with payment of interest.

Since GSTR-3B is a summary return and GSTR-1 is a detailed return of output taxes, some differences/gaps are bound to occur. But the important step here would be identifying the mismatches & correcting the tax liability on your end. For any other suggestion or query, please comment below