Reconciliation of GSTR1 with GSTR3B is a challenging task.
Here is a step-by-step guide to reconcile GSTR-1 with GSTR-3B practically
Step 1: Understand the purpose and contents of each return
GSTR-1 is a detailed return that contains information about all outward supplies (sales) made during a specific period. GSTR-3B, on the other hand, is a summary return that provides an overview of sales and purchases along with the payment of taxes.
Step 2: Review the period covered by both returns
Make sure that the period covered by both GSTR-1 and GSTR-3B is the same. Verify that the dates mentioned in both returns match.
Step 3: Compare the taxable value and tax amount of outward supplies
In GSTR-1, review each line item and compare the taxable value and tax amount with the summary sales figures reported in GSTR-3B. Ensure that the figures match.
Step 4: Identify and rectify discrepancies in sales figures
If there are any discrepancies in the sales figures, go through each line item carefully to identify the reasons for the difference. This may include errors in sales invoices, incorrect tax calculations, or missed entries. Rectify the discrepancies in both returns by making necessary amendments.
Step 5: Cross-verify input tax credit (ITC) figures
Check the ITC figures claimed in GSTR-3B with the sales invoices and credit notes available for the period. Also, compare the ITC figures reported in GSTR-3B with the details mentioned in GSTR-2A, which reflects the ITC available as per the purchases reported by your suppliers.
If there are any instances of missing ITC in GSTR-3B, check if the supplier has filed their GSTR-1 correctly, allowing the ITC to reflect in your GSTR-2A. Conversely, ensure that any excess ITC claims made in GSTR-3B are valid and supported by the necessary documents.
Step 6: Compare tax liability and tax payments
Compare the tax liability reported in GSTR-3B with the tax payment made for the period. Ensure that the total tax amount deposited with the government matches the details reported in GSTR-3B.
Step 7: Rectify errors and file corrections
If you identify any errors or discrepancies during the reconciliation process, file necessary amendments or corrections in subsequent returns. Make the corrections in GSTR-1 and subsequently carry them forward to GSTR-3B.
Step 8: Maintain proper documentation
Keep proper documentation of the reconciliation process, including supporting documents and communication with suppliers or customers. This documentation will be useful in case of any future audits or queries.
Remember, the reconciliation process may vary based on individual circumstances and transactions. It is advisable to seek guidance from a GST professional or a qualified accountant to ensure accurate reconciliation and compliance with GST laws.