Many business owners often get confused between GSTR-1 and GSTR-3B. A common misconception is that GSTR-1 is used to report sales and GSTR-3B is only for purchases. However, this is not entirely accurate. In this article, we will clearly explain the difference between GSTR-1 and GSTR-3B and their respective roles in GST compliance.
What is GSTR-1?
GSTR-1 is a monthly or quarterly return that contains invoice-wise details of all outward supplies (sales) made by a registered taxpayer. This includes sales to both registered and unregistered buyers. Every transaction made during the month—whether it is a B2B (Business-to-Business) or B2C (Business-to-Consumer) sale—must be reported in GSTR-1. The purpose of GSTR-1 is to record your actual sales data in detail, which is then made available to your buyers for ITC (Input Tax Credit) claims. Timely and accurate filing of GSTR-1 helps in better transparency and reconciliations for both supplier and buyer.
Want to learn How to File GSTR-1 Online - Step by Step Guide for Business Owners
What is GSTR-3B?
GSTR-3B, on the other hand, is a summary return filed every month. It includes summary data of sales, purchases, tax liability, and ITC (Input Tax Credit). It is not invoice-wise like GSTR-1, but rather a consolidated report. The key objective of GSTR-3B is to facilitate the payment of GST liabilities. In this return, taxpayers declare the total taxable value, the tax collected on sales, and the amount of eligible ITC. This return is used to compute and pay the net GST payable for the month.
Major Differences Between GSTR-1 and GSTR-3B
Type of Return:
GSTR-1 is a detailed invoice-wise return that captures all your outward supplies, meaning sales you’ve made. On the other hand, GSTR-3B is a summary return where only total values are reported without invoice-level details.
Filing Frequency:
GSTR-1 can be filed monthly or quarterly, depending on your turnover and GST scheme. In contrast, GSTR-3B must be filed every month, regardless of your turnover.
Data Reported:
In GSTR-1, you report only sales (outward supplies). But in GSTR-3B, you report a summary of sales, purchases, input tax credit (ITC), and tax payable.
Purpose of Return:
The purpose of GSTR-1 is to provide the government with detailed sales records, which are then used for matching ITC claims. GSTR-3B is used to calculate and pay your monthly GST liability.
Adjustment Flexibility:
GSTR-1 does not allow any adjustment of input tax credit or tax dues. GSTR-3B, however, allows you to adjust your tax liability with the available ITC before making the payment.
Impact on Buyer’s ITC:
Filing GSTR-1 directly affects the buyer, as it enables them to claim input tax credit. But GSTR-3B has no direct impact on the buyer’s ITC — it’s only for the taxpayer's tax payment process.
Confused about GST Eligibility Here’s our full article on GST Registration in India: Who Needs to Register & Why
Final Thoughts
GSTR-1 and GSTR-3B serve different but equally important purposes. GSTR-1 is about reporting your sales in detail, while GSTR-3B is about paying your GST liability after adjusting ITC. Mistakes or mismatches between these two returns can lead to notices from the department or denial of ITC for buyers.
So, as a responsible business owner, ensure that both GSTR-1 and GSTR-3B are filed correctly and consistently. This not only ensures compliance but also builds trust with your buyers and strengthens your GST profile.
