Under the GST System, registered businesses are required to share transaction information with the government. Among the various returns, the most commonly used are GSTR-1 and GSTR-3B. At first, it may be difficult to understand each role, but once you thoroughly understand both, the process will become clearer. This knowledge will make the filing process easier in real-world business scenarios.
What are GSTR-1 and GSTR-3B?
GSTR-1 is a return used to report the sales made by a business. It normally contains details like invoices issued, credit notes, debit notes, and export sales during a particular period. This return helps the GST system show correct sales information and allows buyers to see these details so they can claim input tax credit. No tax payment is made while filing GSTR-1. Its primary purpose is to accurately record sales and maintain transparency.
GSTR-3B is a summary return that shows the overall GST position of a business. In this return, total sales, total purchases, available input tax credit, and the final tax payable are declared. The actual GST payment is made while filing GSTR-3B. It acts as a self-declaration of tax liability and helps businesses pay GST to the government on time.
When to File GSTR-1?
The filing of GSTR-1 entirely depends on the particular size of the business. Businesses that have high turnover have to file it every month, while small businesses only have to file it once in three months under the QRMP Scheme. Remember, if it is the monthly filing, the due date is the 11th of the next month. For quarterly filings, the due date is set for the 13th of the month following the quarter’s end. If this return is not filed on time, you have to pay the late fee of ₹200 per day (₹100 for CGST and ₹100 for SGST). Filing GSTR-1 on the scheduled dates will help to ensure that sales details appear correctly on the GST portal without errors and delays.
When to File GSTR-3B?
GSTR-3B has to be filed every month, but small businesses can choose quarterly filing if they are eligible. This is a very important return as GST payment is made through it. For monthly filing purposes, the due date is scheduled on the 20th of the following month. If you have to file it quarterly, then the due date scheduled is the 22nd or 24th, based on your state. If this return is not filed on time, you have to pay the late fee of ₹50 per day for a return with tax liability, and ₹20 per day for a “Nil” return. Additionally, late payment of tax in GSTR-3B attracts interest at 18% per annum on the outstanding amount.
In Simple terms, GSTR-1 is mainly used for reporting sales, while GSTR-3B is used for paying GST. Both returns have different roles, but both of them are essential for a smooth tax compliance,and this is taught clearly in the GST course offered by Finprov. Filing both returns is mandatory for all normally registered taxpayers, even if there are no business transactions (a “Nil” return) during the period. As a responsible entity, every registered eligible taxpayer must file these returns on time to avoid additional penalties.
