Consequences Of Inaccurate Reporting of Inter-State B2C Sales In GSTR-3B According to the GSTR-3B format, the return filer must report inter-state sales to unregistered customers, sales to composition dealers, and UIN holders in table 3.2

By Archit Gupta

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Pexels

GSTR-3B is a self-declared summary return in which taxpayers must report the summary figures of sales, Inputs Tax Credit (ITC) claimed, and net tax payable. Businesses must do the table-wise reporting as mandated in GSTR-3B format.

Though the department released guides and advisories on reporting in Goods and Services Tax (GST) returns, the burden of proof for the submitted data still remains on the taxpayers. Hence, GST-registered businesses must verify and validate the data before filing the returns.

Also, the department makes timely amendments and issues clarifications regarding return format to nudge taxpayers towards accurate reporting. Accordingly, it recently clarified reporting of inter-state B2C sales in GSTR-3B.

The taxpayers must report the inter-state B2C sale invoices, including their amendments in tables 5/7B/9/10 of GSTR-1 and the summary figure in GSTR-3B. Similarly, the sales to composition dealers and UIN holders, including its amendments, must be filled in tables 4A/4C/9 of GSTR-1 and be referred to while reporting values in GSTR-3B.

According to the GSTR-3B format, the return filer must report inter-state sales to unregistered customers, sales to composition dealers, and UIN holders in table 3.2. It is important to note that the taxpayers should segregate the said sales according to the place of supply while reporting them.

However, many taxpayers were reporting in a bulk manner without properly bifurcating the sales based on the state in which they sold goods or provided services. This practice created challenges for the government to ascertain consumption in a particular state and allocate tax revenue among states/UTs.

Hence, to address this issue, the department has clarified that the taxpayers must report all interstate B2C sales in table 3.2 of GSTR-3B only after classifying them according to the place of supply. It also clarified that similar practice needs to be followed in case of sales to composition taxpayers/UIN holders.

If the taxpayers fail to bifurcate the inter-state sales, as clarified by the department, it will lead to notices. Also, it may attract a general penalty of up to INR 25,000.

Hence, the businesses shall focus on improving KYC & customer onboarding, especially while capturing the addresses of unregistered customers. Also, they need to maintain proper books of accounts to accurately report interstate B2C sales in GSTR-3B.

This clarification helps the government allocate tax revenue to the relevant states. The affected suppliers operate in banking, finance, insurance, telecom, stock broking, digital payment facilitation, e-commerce and OTT platforms.

Archit Gupta

Founder & CEO, Clear

Clear (née ClearTax) is India’s leading Fintech SaaS company with the mission of simplifying finance. We are trusted by over 6 million Indians, more than 50,000 tax professionals, 1 million small businesses and 3,000 large Enterprises. For small and large businesses, our product suite covers invoicing, GST, range of managed services and credit. For tax professionals, we offer comprehensive GST, Income Tax and TDS solutions. For individuals, we offer tax and wealth management solutions. With this Series C round, we have raised $140 million in equity capital since inception. Our investors include Y Combinator, Composite Capital, Elevation Capital, Founders Fund and Sequoia Capital.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

News and Trends

Kolkata-Based Lab-Grown Diamond Brand Jewelbox Secures USD 3.2 Mn

The startup will primarily use the funds to expand its retail footprint, growing from eight stores to 30 locations by the end of this year.

Science & Technology

How Can Marketers Use ChatGPT? Here Are the Top 11 Uses.

With the recent developments in AI and the popularity of ChatGPT, you may want to integrate AI into your marketing practices. Find out how.

Marketing

5 Ways ChatGPT Will Impact Digital Marketing

ChatGPT is creating ripples across the digital landscape right now. Here are five ways it can benefit your ads, campaigns and marketing strategies.

Science & Technology

The Deepfake Threat is Real. Here Are 3 Ways to Protect Your Business

The rising use of deepfakes is a growing threat to businesses and society as technology advances. Here are three tips for companies to combat this threat.

Business News

'This Has to Stop': JPMorgan CEO Jamie Dimon Outlines How to Run a Successful Meeting

In his annual letter to shareholders Monday, the JPMorgan CEO wrote that meetings have the potential to slow a business down.