Every registered shop files the same two returns for the same month. GSTR-1 says what you sold. GSTR-3B is where you pay the tax on it. They describe one set of bills, so they should carry one set of figures. When they do not, the GST portal notices, because comparing them is now automatic. This post explains why they drift apart in an ordinary shop, how to catch the gap at month end, and how to correct it cleanly.
Two returns, one truth
GSTR-1 is the statement of outward supplies. It carries the detail: B2B sales bill by bill with the buyer's GSTIN, B2C sales as consolidated totals, credit and debit notes, and the HSN summary in Table 12. It collects no money. Its job is information, and other people rely on it: your B2B buyers' GSTR-2B, the statement their input tax credit depends on, is built from your GSTR-1.
GSTR-3B is the opposite: almost no detail, all money. It is a self-declared summary, a handful of totals, and the return through which tax actually reaches the government.
So GSTR-1 is what you told the world you owe, and GSTR-3B is what you paid. For any month the two should be equal. A gap in either direction is a problem: pay less than GSTR-1 declares and the portal treats the shortfall as admitted but unpaid tax; pay more and your B2B buyers cannot see the sales their credit depends on.
The usual ways they drift apart in a shop
Almost every mismatch in a small shop comes from one of five habits:
- A credit note in one return but not the other. A customer returns goods, you issue a credit note under Section 34 and reduce the tax you pay in GSTR-3B, but the note never gets entered in GSTR-1's credit note table. Or the reverse: the note is in GSTR-1 and the 3B figure was typed from the old total.
- A late bill. An invoice missed in this month's GSTR-1 gets added to next month's, but the tax was paid this month. Each single month now shows a gap, in opposite directions.
- Hand-typed figures. GSTR-1 is uploaded from software or a spreadsheet, while GSTR-3B is typed into the portal from a register. One transposed digit and the returns disagree.
- An amendment on one side only. A wrong invoice is corrected through GSTR-1's amendment tables, but nobody adjusts the tax in any GSTR-3B.
- A cancelled bill counted once. A bill cancelled at the counter still sits in one return's total. We cover what cancellation does to your records in the rules for cancelled invoice numbers.
None of these is dishonesty, and none is a portal bug. Each is the same sale recorded in two places by two different routes.
The portal compares them too, so find the gap first
Until a few years ago a mismatch waited quietly for an officer to find it. That has changed in two specific, checkable ways.
First, the Explanation to Section 75(12) of the CGST Act, in force since 1 January 2022, says that tax declared in GSTR-1 but not included in GSTR-3B counts as self-assessed tax. Self-assessed tax can be recovered under Section 79 without a show-cause notice: in the law's eyes you admitted owing it when you filed GSTR-1.
Second, Rule 88C, inserted in December 2022, made the comparison automatic. When your GSTR-1 liability for a period exceeds your GSTR-3B liability by more than the limits set under the rule, the portal sends an intimation in Form GST DRC-01B. You then have seven days to pay the difference through DRC-03 or explain it in Part B. Until you respond, Rule 59(6) blocks your next GSTR-1, which holds up your buyers' credit.
A month-end reconciliation you can do in ten minutes
Do this after GSTR-1 is ready but before GSTR-3B is filed, every month:
- Put the GSTR-1 summary and the draft GSTR-3B side by side, and compare four numbers: taxable value, IGST, CGST and SGST for outward taxable supplies (Table 3.1(a) of GSTR-3B) against the GSTR-1 totals net of credit notes.
- Check that every credit note issued in the month appears in GSTR-1, and that the 3B figure was reduced by the same notes, not a different set.
- Count the bills. If your billing records show 412 bills and the GSTR-1 upload covers 409, three went missing somewhere.
- Look at the first and last invoice numbers of the month for continuity, so a skipped or cancelled number is explained rather than discovered.
If all four figures match to the rupee, file. If not, do not nudge one return to match the other. Find which side matches the physical bills: the bills are the truth, and both returns are copies of it. A GSTR-3B forced to equal a wrong GSTR-1 is two wrong returns that agree.
Fixing it: adjust in the next period or use the amendment tables
The fix depends on which return is wrong, and the two returns correct differently.
GSTR-3B cannot be revised. Once filed, it is filed. The accepted method, laid out in Circular No. 26/26/2017-GST, is to adjust in a later month's GSTR-3B. If you underpaid, add the difference to a following month's figures and pay interest on the shortfall under Section 50. If a DRC-01B has already arrived, pay through DRC-03, or explain in Part B if the difference is genuine timing. If you overpaid, reduce a later month's liability by the excess.
GSTR-1 corrects through its amendment tables in a later period: Table 9A for B2B invoices, Table 9B for credit and debit notes, Table 10 for B2C summaries. The outer limit under Section 37(3) is 30 November after the financial year ends, so a March mismatch does not stay fixable forever.
Whatever you adjust, write down the trail: the month of the error, the month of the correction, and the working between the two figures. If a query comes, that page of working turns a long afternoon into a two-line reply.
Why filing from one set of bills prevents the drift
Look back at the five causes. Each needs two sources of truth: a bill book and a register, a software export and a hand-typed portal entry, a corrected invoice and an uncorrected summary. Remove the second source and the drift has nowhere to start.
That is the approach Layerdots ERP takes. Bills, credit notes and amendments live in one local database on your own computer, and both returns are produced from it: the GSTR-1 upload files, including the HSN summary for Table 12, and the GSTR-3B summary you copy into the portal, come from the same rows. A credit note recorded once flows into both. One honest limit: software cannot reconcile what it never saw, so if a figure is retyped into the portal by hand, compare it against the export before submitting. The reports put both sets of numbers on one screen, so the comparison takes a minute, not an evening.
Common questions
I received Form DRC-01B on the portal. What do I do first?
Respond within seven days: pay the difference through DRC-03, or explain in Part B with the
reason that actually applies, such as an invoice reported in GSTR-1 last month with tax paid
this month. Do not ignore it: Rule 59(6) blocks your next GSTR-1 until you respond, and an
unanswered intimation can move to recovery under Section 79.
The returns disagree. Which one should I correct?
Neither, until you have checked both against your bills. Total the month's invoices and credit
notes from your billing records, then see which return matches. Correct the one that does not:
GSTR-1 through its amendment tables, GSTR-3B by adjusting a later month per Circular
26/26/2017-GST.
Can I just revise GSTR-3B for the month I got wrong?
No. GSTR-3B has no revision facility. Corrections go into a subsequent month's return, with
interest under Section 50 if tax was short-paid. GSTR-1 does allow amendments through Tables
9A, 9B and 10, but only until 30 November after the end of the financial year under
Section 37(3). The earlier a gap is found, the more options remain open.