You have received an assessment notice for the financial year 2018-2019. It seems that there is a difference between your GSTR-1 and GSTR-3B returns for that year. Let me try to explain the possible reasons and solutions for this issue.
First of all, you need to understand the difference between GSTR-1 and GSTR-3B. GSTR-1 is a return that contains the details of your outward supplies, i.e., sales, for each month or quarter. You need to report the invoice-wise details of your sales to different types of customers, such as B2B, B2C, exports, etc. GSTR-3B is a summary return that contains the total values of your inward and outward supplies, i.e., purchases and sales, for each month. You also need to report the tax liability and input tax credit (ITC) claimed for each month in GSTR-3B.
The difference between GSTR-1 and GSTR-3B can arise due to various reasons, such as:
Incorrect classification of customers: You may have reported some customers as B2B in GSTR-1, but as B2C in GSTR-3B, or vice versa. This can lead to a mismatch in the tax rates and amounts applicable to different types of customers. For example, if you have sold goods worth Rs. 10,000 to a B2B customer at 18% GST rate, you need to report Rs. 10,000 as taxable value and Rs. 1,800 as tax amount in both GSTR-1 and GSTR-3B. However, if you have mistakenly reported the same customer as B2C in GSTR-3B, you need to report Rs. 11,800 as taxable value and Rs. 0 as tax amount in GSTR-3B. This will create a difference of Rs. 1,800 in the taxable value and tax amount between GSTR-1 and GSTR-3B.
Incorrect reporting of invoices: You may have missed reporting some invoices in either GSTR-1 or GSTR-3B, or reported them twice in either of the returns. This can lead to a difference in the total value and tax amount of your sales between GSTR-1 and GSTR-3B. For example, if you have sold goods worth Rs. 10,000 to a customer at 18% GST rate, but forgot to report the invoice in GSTR-1, you will have a difference of Rs. 10,000 in the taxable value and Rs. 1,800 in the tax amount between GSTR-1 and GSTR-3B. Similarly, if you have reported the same invoice twice in GSTR-1, you will have a difference of Rs. -10,000 in the taxable value and Rs. -1,800 in the tax amount between GSTR-1 and GSTR-3B.
Incorrect calculation of tax liability and ITC: You may have made some errors in calculating your tax liability and ITC for each month, and reported them incorrectly in GSTR-3B. This can lead to a difference in the net tax payable or refundable between GSTR-1 and GSTR-3B. For example, if you have sold goods worth Rs. 10,000 to a customer at 18% GST rate, and purchased goods worth Rs. 8,000 from a supplier at 12% GST rate, your tax liability for the month will be Rs. 1,800 - Rs. 960 = Rs. 840. However, if you have calculated your tax liability as Rs. 1,800 - Rs. 800 = Rs. 1,000, and reported it in GSTR-3B, you will have a difference of Rs. 160 in the net tax payable between GSTR-1 and GSTR-3B.
To resolve the difference between GSTR-1 and GSTR-3B, you need to do the following steps:
Identify the months or quarters for which there is a difference between GSTR-1 and GSTR-3B. You can use the GST portal or any software that can compare the two returns and highlight the discrepancies.
Analyze the reasons for the difference and rectify the errors in the respective returns. You can amend your GSTR-1 for the previous months or quarters by reporting the correct details of your sales in the current month or quarter. You can also amend your GSTR-3B for the previous months by reporting the correct values of your supplies, tax liability, and ITC in the current month. However, you cannot amend your GSTR-3B for the previous quarters, as it is a monthly return.
Pay the additional tax liability, if any, along with interest and penalty, if applicable, while filing your GSTR-3B for the current month. You can also claim the excess tax paid, if any, as a refund or adjust it against your future tax liability, while filing your GSTR-3B for the current month.
Respond to the assessment notice and submit the relevant documents and evidences to prove that you have rectified the errors and paid the correct tax amount. You can also request for a personal hearing, if needed, to explain your case and seek relief from the tax authorities.
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