← All Topics📊 GSTR-3B Filing — GST Notes

📊 GSTR-3B Filing — GST Reference Notes

IndIaTaxSim · indiataxsim.com · Free Study Materials · For educational use only
1. What is GSTR-3B?

GSTR-3B is a monthly (or quarterly) self-assessed summary return where taxpayers declare:

•Total output tax liability (sales)
•Input Tax Credit (ITC) claimed
•Net tax payable after ITC setoff
•Actual tax payment (from Cash Ledger or Credit Ledger)

GSTR-3B is where the actual tax payment happens. Errors in GSTR-3B — unlike GSTR-1 — cannot be corrected by amendment. Excess ITC claimed must be reversed in a later period's GSTR-3B.

2. Section-wise Structure of GSTR-3B
SectionDescriptionKey Points
3.1(a)Outward taxable supplies (other than below)Regular taxable supplies — B2B + B2C
3.1(b)Outward taxable supplies — Nil rated, Exempt, Non-GSTNo tax but must be declared
3.1(c)Zero-rated supplies without payment (exports under LUT)IGST = ₹0 but declared
3.1(d)Inward supplies attracting RCMTax payable by you (buyer) under reverse charge
3.1(e)Non-GST outward suppliesPetrol, alcohol, etc.
4(A)(1)ITC on Import of GoodsIGST paid on imports
4(A)(2)ITC on Import of Services (RCM)Claimed after paying RCM
4(A)(3)ITC on Inward supplies from ISDDistributed by Input Service Distributor
4(A)(4)ITC on all other inward suppliesRegular B2B purchases from GSTR-2B
4(B)(1)ITC reversed — Rule 42 & 43Proportional reversal for exempt/personal use
4(B)(2)Other reversalsIneligible credits, excess claimed earlier
5.1Interest payable on taxOn late payment — must be paid in cash
6.1Tax payable after ITC setoffIGST, CGST, SGST liabilities
6.2Tax paid via ITC and CashHow much from each ledger
3. ITC Setoff Order — Section 49 of CGST Act
ITC AvailableCan Be Used To PayCannot Be Used To Pay
IGST creditIGST liability first, then CGST, then SGSTNothing beyond these
CGST creditCGST liability onlySGST (cannot cross-utilise CGST → SGST)
SGST creditSGST / UTGST liability onlyCGST (cannot cross-utilise SGST → CGST)
UTGST creditUTGST liability onlyCGST or IGST
📌 Example
A supplier has:
ITC Available: IGST = ₹5,000 | CGST = ₹3,000 | SGST = ₹3,000
Tax Payable: IGST = ₹8,000 | CGST = ₹4,000 | SGST = ₹4,000
Step 1: Use IGST ITC → Pay IGST: ₹5,000 of ₹8,000 paid. IGST balance payable = ₹3,000.
IGST ITC exhausted. Remaining IGST liability (₹3,000) → pay from Cash.
Step 2: Use CGST ITC → Pay CGST: ₹3,000 of ₹4,000. Balance CGST = ₹1,000 from Cash.
Step 3: Use SGST ITC → Pay SGST: ₹3,000 of ₹4,000. Balance SGST = ₹1,000 from Cash.
Cash required: IGST ₹3,000 + CGST ₹1,000 + SGST ₹1,000 = ₹5,000 total cash.
4. Blocked Credits — Section 17(5)

ITC is BLOCKED (not available) on:

CategoryBlocked ITCException (ITC IS available)
Motor vehicles (≤13 seats)ITC blockedVehicles used for: taxi service, driving school, transport of goods, or further supply of vehicles
Food and beveragesBlockedIf providing outdoor catering service as a business
Club memberships, fitnessBlockedNo exception
Beauty treatment, cosmetic surgeryBlockedNo exception
Works contract for own immovable propertyBlockedIf it is plant and machinery (not building)
Construction of immovable propertyBlockedPlant and machinery (not civil structures)
Rent-a-cab servicesBlockedIf it is a legal obligation of employer
Life insurance, health insuranceBlockedIf mandated by law or for workmen's compensation
Travel benefits to employeesBlockedNo exception
5. Rule 36(4) — ITC Must Match GSTR-2B

You can only claim ITC in GSTR-3B for invoices that appear in your GSTR-2B. If a supplier has not filed GSTR-1 by the GSTR-2B cutoff date (13th of following month), their invoice is NOT in your GSTR-2B. You cannot claim that ITC in the current period.

ℹ️ Note
Before Rule 36(4), taxpayers could claim ITC on any invoice even if the supplier hadn't filed. This led to ₹46,000+ crore fraudulent ITC claims. Rule 36(4) was introduced to plug this gap.
6. Late Fee and Interest
🔢 Formula
Late Fee (non-nil GSTR-3B) = ₹25/day CGST + ₹25/day SGST = ₹50/day total
Late Fee (nil GSTR-3B) = ₹10/day CGST + ₹10/day SGST = ₹20/day total
Maximum = ₹5,000 CGST + ₹5,000 SGST = ₹10,000
Interest on unpaid tax = 18% per annum
= (Tax unpaid × 18%) ÷ 365 × Days delayed
Interest is payable from the due date to the date of actual payment.
IMPORTANT: Interest CANNOT be paid from ITC. Only from Cash Ledger.
❓ Problem
Rahul Enterprises has GSTR-3B tax payable: IGST ₹10,000, CGST ₹8,000, SGST ₹8,000. Available ITC: IGST ₹6,000, CGST ₹5,000, SGST ₹5,000. How much cash must be deposited?
✅ Solution
IGST: ITC = ₹6,000 applied → balance payable in cash = ₹10,000 − ₹6,000 = ₹4,000 cash
CGST: ITC = ₹5,000 applied → balance = ₹8,000 − ₹5,000 = ₹3,000 cash
SGST: ITC = ₹5,000 applied → balance = ₹8,000 − ₹5,000 = ₹3,000 cash
Total cash required = ₹4,000 + ₹3,000 + ₹3,000 = ₹10,000
(Note: IGST ITC could potentially reduce CGST/SGST after IGST is settled — but here IGST itself has a gap, so no spillover.)
❓ Problem
A taxpayer's GSTR-3B for January is due on 20 February. She pays on 15 March. Tax payable = ₹1,00,000. Calculate interest.
✅ Solution
Days delayed = 15 March − 20 February = 23 days.
Interest = ₹1,00,000 × 18% ÷ 365 × 23 = ₹1,13,260 ÷ 365 × 23...
= ₹1,00,000 × 0.18 / 365 × 23
= ₹18,000 / 365 × 23
= ₹49.315 × 23
= ₹1,134 (approx)
This must be paid entirely from the Cash Ledger.
✏️ MCQ Practice — 50 Questions
1.GSTR-3B is a monthly self-assessment return that covers:
(A) Only outward supplies (B) Only ITC claimed (C) Summary of outward supplies, ITC, and tax paid (D) Only tax paid details
2.Monthly GSTR-3B is due on the ___ of the following month for taxpayers in Category 1 states.
(A) 10th (B) 20th (C) 22nd (D) 24th
3.QRMP taxpayers file GSTR-3B:
(A) Monthly by 20th (B) Quarterly by 22nd/24th of the month after the quarter (C) Annually (D) Every 6 months
4.Section 3.1(a) of GSTR-3B covers:
(A) Zero-rated (export) supplies (B) Outward taxable supplies (excluding zero-rated and nil-rated) (C) ITC on inward supplies (D) Tax paid under RCM
5.Section 3.1(b) of GSTR-3B covers:
(A) Outward taxable supplies (B) Outward zero-rated (exports) (C) Inward supplies attracting reverse charge (D) Non-GST outward supplies
6.Section 3.1(c) of GSTR-3B covers:
(A) RCM supplies (B) Outward zero-rated supplies (exports) (C) Nil-rated supplies (D) Exempt supplies
7.Section 3.1(d) covers which type of supplies?
(A) Outward taxable (B) Nil-rated, exempt, and non-GST supplies (C) RCM supplies (D) Zero-rated with IGST payment
8.Section 4(A) of GSTR-3B deals with:
(A) Tax payable (B) ITC available — IGST, CGST, SGST, and CESS (C) Tax paid (D) Excess ITC from previous period
9.Blocked credits under Section 17(5) — such as ITC on personal vehicles — must be reversed in:
(A) Section 4(A) (B) Section 4(B)(1) — ITC reversal as per rules 38, 42, 43, 44, and Section 17(5) (C) Section 3.1 (D) Section 6
10.The ITC setoff order under GST requires first exhausting IGST credit for paying:
(A) CGST liability first (B) IGST liability first, then CGST, then SGST (in that order) (C) SGST first, then CGST, then IGST (D) Any head in any order
11.CGST credit can be used to pay:
(A) CGST only (B) CGST and IGST (not SGST) (C) CGST and SGST (D) Any head
12.SGST credit can be used to pay:
(A) SGST only (B) SGST and IGST (not CGST) (C) SGST and CGST (D) Any head
13.Interest on late payment of GST is charged at:
(A) 12% per annum (B) 15% per annum (C) 18% per annum (D) 24% per annum
14.Interest on fraudulently claimed ITC is charged at:
(A) 18% per annum (B) 24% per annum (C) 36% per annum (D) 12% per annum
15.Late fee for GSTR-3B (nil return) is:
(A) ₹50/day (B) ₹20/day (₹10 CGST + ₹10 SGST) (C) ₹100/day (D) Nil — no late fee for nil GSTR-3B
16.Late fee for GSTR-3B (non-nil) is:
(A) ₹20/day (B) ₹50/day (₹25 CGST + ₹25 SGST) (C) ₹100/day (D) ₹200/day
17.Rule 36(4) restricts provisional ITC to what percentage of invoices appearing in GSTR-2B?
(A) 5% extra over GSTR-2B (B) 10% extra over GSTR-2B (C) 20% extra over GSTR-2B (D) No provisional ITC — 100% from GSTR-2B only
18.Section 17(5) of CGST Act deals with:
(A) Time of supply of services (B) Blocked credits — ITC not available on specified items (C) ITC reversal for partial use (D) Annual ITC reconciliation
19.Which of the following is a blocked credit under Section 17(5)?
(A) ITC on raw materials used for manufacturing (B) ITC on capital machinery (C) ITC on motor vehicles (≤ 13 seats) for personal transport of employees (D) ITC on office furniture
20.ITC on food and beverages purchased for business is:
(A) Allowed fully (B) Blocked — except if the taxpayer is in the outdoor catering business (C) Allowed at 50% (D) Allowed only if GST rate is above 12%
21.ITC on life insurance premium paid for employees is:
(A) Always allowed (B) Always blocked (C) Allowed only if mandated by any law for the employer to provide (D) Allowed if employees pay premium themselves
22.GSTR-3B tax must be paid from which ledger?
(A) Credit Ledger (ITC) only (B) Cash Ledger only (C) Liability Ledger first, then Cash Ledger (D) First exhaust ITC from Credit Ledger, then use Cash Ledger
23.RCM tax liability in Section 3.1(b) can be paid from:
(A) Credit Ledger (ITC) (B) Cash Ledger only — ITC cannot be used to pay RCM liability (C) Either Cash or Credit Ledger (D) Only via bank transfer
24.After paying RCM tax from Cash Ledger, the taxpayer can claim ITC on that RCM tax:
(A) Never (B) Immediately in the same return if eligible (C) Only after 3 months (D) Only in the next financial year
25.GSTR-3B Section 5 — "Interest and Late Fee" is:
(A) Auto-computed and cannot be changed (B) Editable — taxpayer can adjust (C) Shown as zero always (D) Computed only if officer demands
26.RE-COMPUTE INTEREST button in GSTR-3B recalculates:
(A) Interest based on tax paid date vs due date (B) Late fee only (C) Both late fee and penalty (D) Tax payable amount
27.A taxpayer who filed GSTR-3B with excess ITC claimed beyond what appears in GSTR-2B will receive:
(A) Auto-refund (B) DRC-01C notice for excess ITC (C) Nothing — GSTN accepts any ITC claimed (D) Penalty of ₹10,000
28.GSTR-3B once filed can be revised:
(A) Within 30 days of filing (B) Within the same month only (C) Never — it cannot be revised; only corrections via GSTR-1A for outward supplies (D) After annual return filing
29.ITC must be reversed if the supplier's invoice is not paid within:
(A) 90 days (B) 120 days (C) 180 days from invoice date (D) 365 days
30.After 180-day ITC reversal, ITC can be reclaimed when:
(A) The financial year ends (B) The supplier files their GSTR-1 (C) The invoice is paid and the supplier's GSTN shows payment received (D) Payment is made to the supplier
31.Which section of GSTR-3B captures tax on advances received but supply not yet made?
(A) Section 3.1(a) (B) Section 3.1(d) (C) Section 11A (D) Section 4(A)
32.In GSTR-3B, "Net ITC" in Section 4(C) equals:
(A) Total ITC available (B) ITC available minus ITC reversed (C) ITC claimed from GSTR-2B (D) ITC from previous period only
33.GSTR-3B outward supply in Section 3.1(a) should match (approximately) the total taxable value in:
(A) GSTR-2A (B) Filed GSTR-1 (C) GSTR-9 Part II (D) e-Way Bill data
34.The "system-generated GSTR-3B" pre-fills Section 3.1 from:
(A) Taxpayer's own entries (B) GSTR-1 data filed for the same period (C) GSTR-2B data (D) e-Invoice data only
35.Who can file a nil GSTR-3B via SMS?
(A) Any taxpayer (B) Only QRMP taxpayers (C) Only taxpayers with zero turnover for the full year (D) Only composition taxpayers
36.GSTR-3B of a particular month/quarter must be filed before:
(A) GSTR-1 of the same period (B) GSTR-9 of the same FY (C) GSTR-1 of the next period (required to unlock next period's GSTR-1) (D) IMS reconciliation
37.Exports with IGST payment are shown in GSTR-3B Section:
(A) 3.1(a) (B) 3.1(b) (C) 3.1(c) (D) 3.1(d)
38.Section 4(B)(2) in GSTR-3B is used to reverse ITC for which reason?
(A) ITC claimed on blocked credit items (17(5)) (B) Other reversals — DRC-01C compliance, 180-day rule, etc. (C) RCM input tax (D) IGST credit only
39.The maximum late fee for GSTR-3B (non-nil) is capped at:
(A) ₹5,000 (B) ₹10,000 (C) ₹20,000 (D) No cap
40.CESS in GSTR-3B Section 4(A)(5) refers to:
(A) Education Cess (B) GST Compensation Cess on luxury/sin goods (C) Agricultural Welfare Cess (D) Swachh Bharat Cess
41.Which of the following is NOT a valid reason for ITC reversal in Section 4(B) of GSTR-3B?
(A) Rule 42 — ITC on inputs used for exempt supplies (B) Rule 43 — ITC on capital goods partly used for exempt supplies (C) Rule 36(4) — excess provisional ITC (D) All the above are valid reasons for reversal
42.If GSTR-3B is filed after the due date, interest starts from:
(A) Due date of GSTR-3B (B) Date of actual payment of tax (C) Date of filing GSTR-1 (D) Date of GSTR-2B generation
43.DRC-01B is a notice issued when:
(A) GSTR-1 is not filed (B) Excess ITC claimed in GSTR-3B vs GSTR-2B exceeds ₹25 lakh or 20% (C) Tax is paid late (D) Annual return is overdue
44.The taxpayer's response to DRC-01B must be filed within:
(A) 3 days (B) 7 days (C) 15 days (D) 30 days
45.Late fee for GSTR-3B is paid from:
(A) Credit Ledger (ITC) (B) Cash Ledger only (C) Either ledger (D) Liability Ledger
46.For QRMP taxpayers, monthly tax is paid via:
(A) Monthly GSTR-3B (B) PMT-06 challan by 25th of the following month (C) Monthly GSTR-1 (D) GSTR-7 monthly return
47.Section 6 of GSTR-3B covers:
(A) Tax on outward supplies (B) Payment of tax (tax payable vs tax paid reconciliation) (C) ITC claimed (D) Late fee paid
48.IGST credit can be used to pay which liabilities?
(A) IGST only (B) IGST and CGST only (C) IGST, CGST, and SGST (in that order of setoff) (D) Only IGST and CESS
49.What is the correct ITC setoff order as per Section 49B of CGST Act?
(A) CGST → SGST → IGST (B) IGST credit → first for IGST, then CGST, then SGST (C) SGST → IGST → CGST (D) Any order is allowed
50.GSTR-3B is a "self-assessed" return meaning:
(A) GSTN auto-computes all values (B) The taxpayer declares values based on their own records (C) Officer verifies and certifies each entry (D) Bank certifies tax payments
Answer Key
1–C 2–B 3–B 4–B 5–C 6–B 7–B 8–B 9–B 10–B 11–B 12–B 13–C 14–B 15–B 16–B 17–D 18–B 19–C 20–B 21–C 22–D 23–B 24–B 25–A 26–A 27–B 28–C 29–C 30–D 31–A 32–B 33–B 34–B 35–A 36–C 37–C 38–B 39–B 40–B 41–D 42–B 43–B 44–B 45–B 46–B 47–B 48–C 49–B 50–B
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