GSTR-3B is a self-assessed summary return that has to be filed by registered taxpayers under GST every month. It includes details of outward and inward supplies, input tax credit (ITC) claimed, reversed, RCM liability, credit of RCM claimed and details of payment of GST towards interest and late fee. GSTR-3B is an important return and has to be filed every month by all registered businesses. Though it is a fairly easy return to file, sometimes mistakes can happen while calculating sales, purchases, input and output taxes. Taxpayers then face the dilemma of how to rectify the mistakes.
As there is no scope for revision of the GSTR-3B return once it is filed, the only recourse the taxpayer has is to rectify it in the subsequent month when the error has been noticed. But there is a time limit for that too. The corrections and amendments to GSTR-3B must be made before November 30th of the next financial year or before filing the annual return whichever is earlier. The additional liability not reported earlier at the time of filing GSTR-3B can be declared and paid while filing GSTR-9 but additional ITC cannot be claimed. Therefore, it is important to maintain proper records and documentation of all the inward and outward supplies, with invoice details, recipient’s details, tax liability, tax paid etc.
If the errors are traced before filing then they can be corrected by editing the respective input side. But if the errors are noticed after offsetting and filing of the return, then the following has to be done:
Amendments in GSTR-3B
Input tax credit is auto-populated from Form GSTR-2B(auto-generated inward supply statement) and liabilities are auto-populated from Form GSTR-1 (outward supply statement) in Form GSTR-3B, but lot of confusion still remains with regards to GSTR-3B. To overcome this confusion, various circulars and notifications have been issued by the Government based on the recommendations of the GST council so that the taxpayers can furnish the correct information of inter-state supplies and the amount of ineligible/blocked input tax credit (ITC) and reversal thereof: the important changes after these amendments as per Notification No.14/2022, Central Tax darted 05.07.2022 and Circular No. 170/02/2022-GST dated 06.07.2022 is as follows:
- Regular taxpayers, including those opting for QRMP(Quarterly Return and monthly payment) scheme, must file a GSTR-3B return with the required information. They can file the return either monthly or quarterly if they opt for the QRMP scheme. A separate GSTR-3B should be filed for every GSTIN.
- Liability of payment of GST has been shifted to e-commerce operators in various cases from persons selling through e-commerce platforms by virtue of section 9(5) of CGST Act. A separate table 3.1.1 has been introduced in GSTR-3B to report these supplies.
- Table 4(D)(1) was introduced to keep track of ITC being reclaimed out of the temporary reversal pool of ITC and identify the difference in ITC as per GST 2B and GSTR 3B, claimed in the present month, but which pertains to the previous months, can be identified.
- Table 4 (B)(1) will include ITC which is to be reversed and is permanent in nature; that means ITC which will not be re-availed by the registered person.
- ITC which is to be reversed in the current month, but which can be reclaimed later is to be reversed in table 4(B)(2)
- Total of 4(A) + 4(D)(2)-4(D)(1) should be ideally equal to the total of GSTR (2)(B) for the month.
- Identification of supply under section 9(5) to be flagged separately.
- Tracking of supply to UED, composition dealers and UIN.
Also Read: Common Errors and Mistakes in GSTR-3B Filing
Recent Changes in GSTR-3B w.e.f January 2023
- Credit Note and their Amendments auto populated in Table 4(A):
Previously credit notes were auto-populated in Table 4B (2) as ITC reversal. Now the impact of credit notes and their amendments are adjusted in Table 4(A) only.
Basically, the total tax amounts in credit notes will be reduced from the gross ITC available and net amount will be reflected in Table 4(A).
- Taxpayers are also allowed to report negative values in Table-4A.
Because of the changes mentioned above, the values in Table-4A can be negative. In case the value of credit notes exceeds the total of the invoices and debit notes combined, the resultant net ITC will be negative.
- Negative amounts allowed in GSTR-3B Table 4D (2)
Table 4D(2) comprises of the ITC that is ineligible u/s 16(4) and intra State supplies in which the recipient is located in State / UT other than that of the supplier’s (i.e. ITC restricted due to POS rules). Taxpayers are now allowed to show negative amounts in Table 4D(2) of GSTR-3B.
Benefit of Amendment to Taxpayers
- The benefit of this amendment is that it makes reconciliation with GSTR-2B and reporting the values in Tables 4(B)(1) and 4(B)(2) easier.
- Moreover, it will make the comparison of Table 8 of the GSTR-9 more consistent and Table 6A of GSTR 9 will reflect net values of credit notes.
Not Reporting Liability: If any invoice or some liability has not been reported or under reported in a particular month or quarter in GSTR-1 and GSTR-3B, then the taxpayer has to report it and pay tax on it in the succeeding month or the month when it has been noticed along with the interest if any. This must be done before filing the annual return. In case the invoice was reported in GSTR-3B and tax paid, but left out in GSTR-1, then it has to be included in the subsequent month, but no tax needs to be paid along with interest.
Repetition in Reporting Liability: If there is an excess tax paid due to repetition and mistake in reporting of the liability, then the excess tax can be adjusted in the next month/quarter’s return. If this is not possible then a refund can be claimed. If an invoice is reported twice in GSTR-1, then it can be revised in amendments in table 9 of GSTR-1. But liability is adjusted only in GSTR-3B even when there is excess reporting in GSTR-1.
Related Read: Amendment in GST Registration: Core and Non-Core Fields
If the goods and services are not received, the same must be claimed first then reversed.
- What is the due date for availing short credit?
Answer: As per the new amendment, short credit can be availed till GST return of November 30th of the next financial year.
- What are the tips to avoid common mistakes while filing GST returns?
Answer: Some of the tips to avoid common mistakes while filing GST returns are:
- Maintaining accurate records of invoices, purchases, expenses, and taxes
- Timely reconciliation of invoices and returns.
- Regular checking the GSTN portal for notifications and updates
- Training and educating employees about GSTN processes and filing.
GSTR-3B is a summary return in which individual invoice details are not required to be provided while filing this return. Values are auto-populated from GSTR-1 and GSTR-2B in GSTR-3B after the new amendment. Sometimes the invoices are not properly uploaded in these returns which causes errors while computing the tax liability and input tax credit claims.
A business registered under GST can face many consequences like penalty and interest if they file their GSTR-3B returns wrongly. As there is no scope for revision after filing the return, the taxpayers must be cautious and try to avoid mistakes when filing these returns. To avoid losses, a close scrutiny of every detail entered in the form and tax accurately calculated after taking the correct input tax credit should be done before filing the return.
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