GSTR-3B and GSTR-1 reconciliation

GSTR-3B and GSTR-1 Reconciliation

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GSTR-3B and GSTR-1 Reconciliation

Goods and Service Tax (GST) is a destination based levy and introduction of the same has subsumed various Central taxes and State taxes. The transaction of inter-state supplies of goods or services to the unregistered person needs to be reflected in both the returns FORM GSTR-3B and FORM GSTR-1. Currently, the trade practice that is being followed is that many registered person is not reflecting the transaction of inter-state supplies of goods or service to the unregistered person in FORM GSTR-3B, however, the same is being reflected in FORM GSTR-1. Due to such trade practice, there arises a mismatch in the quantum of goods or services or both that are actually being supplied in a State and the amount of integrated tax apportioned between the Centre and the State. In order to solve the above-mentioned issue, the Central Board of Indirect Taxes and Customs issued circular no. 89/08/2019-GST dated 18th February 2019. In this article, we look at the procedure for GSTR-3B and GSTR-1 reconciliation as per the above notification.

Reconciliation

The below mentioned table provides the details of how and where the inter-state supplies to the unregistered person need to be reflected in FORM GSTR-3B and GSTR-1 –

Relevant Return

Table No.

Particulars

FORM GSTR-3B Table 3.2 Details of inter-state supplies made to the unregistered persons, composition taxable person and UIN holders
FORM GSTR-1 Table 7B Details of all the inter-state supplies made to the unregistered persons where the invoice value is up to INR 2.5 Lakhs (rate-wise)

Clarification by the Board

The Central Board of Indirect Taxes and Customs, vide circular no. 89/08/2019-GST dated 18th February 2019, has provided the below clarification:

The transaction of inter-state supplies to the unregistered person by the registered person is mandatory to be reflected, along with the place of supply, in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1.

In case there is any contravention in reflecting of the said entries, in the said FORM GSTR-3B and FORM GSTR-1, penal action under provisions of section 125 of the CGST Act would be initiated.


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