Possibilities of errors & its solutions in GSTR-3B

CA Rahul Mittal
on 15 June 2020

When GST came in 2017, there was a provision of GSTR 1, GSTR 2 and GSTR 3 returns. GSTR-3B (i.e. a summary return) was brought for a short period by the Government.

What is GSTR-3B?

Simple Tax return form in which Summary of sale and purchase, available input tax credit, tax payable, tax paid is to be furnished. GSTR-3B once filed, cannot be revised.

Who can file GSTR 3B?

GSTR 3B must be filed by everyone who has registered for GST.

Who can not file GSTR 3B?

Input service Distributors
Composition dealers
Suppliers of online information and database access or retrieval services
Non Resident taxable Person

Possibilities of errors and its solutions in GSTR-3B

If no transaction is done in a month, do we still to file a return?

Yes, GSTR-3B has to be filed by every registered person even if there are no transactions in a month.

Section 37(3) of CGST Act

Any registered person, who has furnished the details under section 37(1) for any tax period and which have remained unmatched under section 42 or section 43 of CGST Act, shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay tax and interest, if any, in case there is short payment of tax on account of such error or omission, in return to be furnished for such tax period.

Provided that no rectification of error or omission in respect of the details furnished under section 37(1) of CGST Act shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier – first proviso to section 37(3) of CGST Act.

Possibilities of errors in GSTR 3B?

1. Liability was under-reported

Liability may be added in the return of subsequent month(s) after payment of interest. Suppose in a certain month some sale bill missed to be reported and due to this while adding this sales amount to current month sales, liability will also get increased. The said liability will have to be paid along with appropriate interest amount. Under GSTR 3B additional sales figure will be added in point no. 3.1 i.e. Outward supplies and inward supplies on reverse charge. Though in GSTR 3B where the said interest can be shown is not explained so only payment can be made.

Example: Mr. A missed to report a bill in GSTR 3B of the month of July 2019 of amount Rs. 10,000 on which GST 18%. Now, Mr. A can add this bill in next month return i.e. August 2019 and pay the GST liability with interest.

If such liability was not reported in FORM GSTR-1 of the month/quarter concerned, then such liability may be declared in the subsequent month's/quarter's FORM GSTR-1 in which payment was made.

2. Liability was over reported

Liability may be adjusted in return of subsequent month(s) or refund may be claimed where adjustment is not feasible. Suppose if a bill was booked twice or some sales return transactions were missed to be considered then the same can be adjusted with the current month liability, if feasible otherwise refund can be claimed. Under GSTR 3B over reported sales figure will be deducted from the total sales figure from point no. 3.1 i.e. Outward supplies and inward supplies on reverse charge. It may be noted that while making adjustment in the output tax liability or input tax credit, there can be no negative entries in the FORM GSTR-3B.

Example: Mr. A booked a bill twice in GSTR 3B of the month of July 2019 of amount Rs. 10,000 on which GST 18% and also filed the return. Now, Mr. A can reduce this bill liability in the return of subsequent months or claim refund of the same.

Where the liability was over reported in the months / quarter's FORM GSTR-1 also, then such liability may be amended through amendments under Table 9 of FORM GSTR-1.

3. Liability was wrongly reported

Unreported liability may be added in the next month's return with interest, if applicable. Also, adjustment may be made in return of subsequent month(s) or refund may be claimed where adjustment is not feasible.

Suppose interstate sale was shown as intrastate sale or liability was shown with low tax rate. Then said interstate liability or the balance tax liability has to be paid and earlier paid intrastate tax can be adjusted later or can for claimed as refund.

Example: Mr. A was registered in Haryana. While entering the outward supplies in FORM GSTR-3B, Mr. A realized that he had inadvertently, shown inter-State supply as intra-State supply and submitted the return. Mr. A paid their wrong liability and filed their return in order to avoid late fee and penalty.

Now, Mr. A will have to report the inter State supply in their next month's liability and adjust their wrongly paid intra-State liability in the subsequent months returns or claim refund of the same.

Such taxpayers will have to file for amendments by filling Table 9 of the subsequent month's / quarter's FORM GSTR-1.

4. Input tax credit was under-reported

Input tax credit which was not reported may be availed while filing return for subsequent month(s). Suppose we have missed to consider certain purchases then we can consider the same in subsequent months purchase along with input tax credit available. In point no. 4 of GSTR 3B i.e. "Eligible ITC " Additional ITC can be added.

Example: Mr. A booked the Input tax credit of Rs. 100 while Rs. 1000 was to be done.Mr. A filed the return and paid Rs. 900/-.
Now, Mr. A can add the remaining Input Tax Credit in the subsequent month(s) return.

No Action required in GSTR 1

5. Input tax credit was over reported

Pay (through cash) / Reverse such over reported input tax credit with interest in return of subsequent month (s). Suppose if we have claimed more input tax credit and also utilized then we need to adjust or pay the same along with the applicable interest amount.

Example: Mr. A booked the input tax credit of Rs. 2000 while Rs. 1000 was to be done. Mr. A also utilized the input tax credit and filed the return.

Now, Mr. A will have to pay (through cash) or reverse the over booked utilized input tax credit with interest.

No action required in GSTR-1.

6. Input Tax credit of the wrong tax was taken

Pay (through cash)/ Reverse any wrongly reported input tax credit in return of subsequent month(s).

For under-reporting input tax credit, the same may be availed in return of subsequent month(s).

Example: Mr. A wrongly booked central tax credit of Rs. 2000 as integrated tax credit. Mr. A paid Rs. 2000 central tax in cash and did not utilize the integrated tax credit and filed the return.

Now, there is an unutilized integrated tax credit of Rs. 2000 which was inadmissible. Mr. A will have to pay/ reverse such credit in the return of subsequent month(s). Further, central tax credit of Rs. 2000 can be availed in the return of subsequent month(s).

No action required in GSTR 1.