Difference between GSTR-1 and GSTR-3B



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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

 

Comments

Post a Comment

Popular posts from this blog

8 Sources of Finance for Small-Scale Industries

Image
  Introduction Finding financing for your business is one of the most important things you can do to ensure its success. There are a wide variety of ways in which you can find financing for your small-scale industry, and this is just one aspect of the overall financial management of your business. Small-scale industries need both long-term and short-term credit. The source of finance is essential for the survival, development, and overall growth of the industry. There are a wide variety of sources of finance, including personal investment, love money, venture capital, angel funding, crowdfunding, business incubators, etc. These sources are useful under various circumstances. They are classified based on time period, ownership and control, and their source of generation. Sources of finance are the most researched area, especially for startup entrepreneurs. In this article, we will explore the top 8 sources of finance for small-scale industries in India. What is a Small-Scale Industry? S
Read more

Business Choices: Sole Proprietorship vs. Partnership firm

Image
Introduction When starting a new firm, choosing the correct business structure is crucial. Partnerships and Sole Proprietorships are two prominent business structures that many small business owners prefer for flexibility and simplicity. In this article, detailed information on what a Sole Proprietorship is and the difference between Sole Proprietorship and a partnership firm is discussed. What is Sole Proprietorship? A Sole proprietorship is a name given to a business owned and operated by a single individual. It’s the simplest type of business organization. A sole proprietorship is not considered a separate legal entity from its owner. What are the Characteristics of a Sole Proprietor? Single Ownership:  The term single ownership refers to the fact that the sole proprietor owns all the assets of the business, including the property. Therefore, the sole proprietor takes on all the risks associated with the business. Unlimited Liability:  Sole proprietorship business liability is unlim
Read more
Image
  Start Business in India Registering a business in India is a very quick and online process. India is a land of infinite opportunities and skilled workforce as one would agree. Starting a business in India and Investing was never so easy, cheap and quick. One can start a wholly owned Indian subsidiary anywhere in India. There are no state-specific laws to register your business in India. There is only one central law that governs the Indian Subsidiary Set up across India. All you need a resident Indian director (not necessarily a shareholder but can be an employee!) and a rented (virtual) place of office to get going. 100% ownership, strategic decision -making and control of operations rest with your parent company always. Minimum Requirement for Indian Subsidiary: Minimum two directors are required for incorporation of the Company. At least one should be a resident of India. No minimum capital required to form an Indian Subsidiary Company in India. Indian Subsidiary Company must have
Read more