How to File Monthly GST Returns in India — GSTR-1 and GSTR-3B
GST-registered businesses with turnover above ₹5 crore (or those not on the QRMP scheme) must file two returns every month: GSTR-1 (details of outward supplies, due by the 11th) and GSTR-3B (summary return with net tax payment, due by the 20th). Since the GST portal enabled Invoice Management System (IMS) reconciliation, buyers accept, reject, or keep invoices pending against your GSTR-1 data, which now directly shapes their GSTR-2B and ITC claims. Since a 2025 portal change, GSTR-3B's auto-populated liability figures are locked and can only be corrected via GSTR-1A before filing, not by manual overwrite. Missed or mismatched filings block e-way bill generation, delay your buyers' input tax credit, and attract late fees and interest. Because the two returns are interlinked, most of the real work happens in reconciliation between filing GSTR-1 and filing GSTR-3B, not in either filing itself.
Before you start
- Active GSTIN and GST portal login credentials
- Sales invoices for the month (B2B, B2C, exports, credit/debit notes) in a consistent format
- Purchase invoice register with vendor GSTINs for ITC matching
- Digital signature certificate (DSC) or EVC-linked mobile/email for authentication, depending on entity type
- Bank account enabled for net banking or NEFT/RTGS GST payments
- Previous month's Electronic Credit Ledger and Electronic Cash Ledger balances
- HSN/SAC-wise summary of outward supplies for the HSN reporting table
- Reconciliation of e-invoices (if applicable) against the sales register, since e-invoice data auto-populates GSTR-1
Step-by-step
Compile and Classify Sales Invoices
Segregate your sales invoices into: B2B (registered buyers — GSTIN required), B2C large (interstate sales above the applicable threshold to unregistered buyers), B2CS (consolidated for other B2C), exports (with/without payment of tax), SEZ supplies, and nil-rated/exempt supplies.
- If you issue e-invoices, cross-check that IRN-linked invoices have flowed into your GSTR-1 draft correctly before making further edits.
- Errors in classification here are the single biggest cause of reconciliation mismatches with buyers' GSTR-2B/IMS later in the month.
Reconcile Credit and Debit Notes
List all credit notes and debit notes issued during the month against original invoices, including those relating to earlier tax periods. Confirm each note references the correct original invoice number and date — the portal validates this at upload and rejects orphaned notes.
Prepare and Upload GSTR-1 Data
Use the GST offline tool (Excel/JSON-based) or your accounting software's GST API integration to prepare invoice-wise data. Upload to the portal and review the summary for each table (B2B, B2C, exports, HSN summary, documents issued) before submission.
File GSTR-1 by the 11th
Log in to the GST portal, navigate to Returns Dashboard, select the tax period, and open GSTR-1. Verify the auto-populated summary against your books, then submit and file using DSC or EVC. Once filed, the data flows into your buyers' IMS/GSTR-2B that night — late filing directly delays their ITC.
Monitor IMS Actions and File GSTR-1A if Needed
Track how buyers act on your invoices in the Invoice Management System (accept, reject, or pending). If a buyer rejects an invoice or flags a discrepancy before you file GSTR-3B, use GSTR-1A to correct the relevant entries — this is the only route to amend outward-supply data for the same period before the 3B is filed.
Download and Reconcile GSTR-2B
Download the auto-generated GSTR-2B, typically available around the 14th. Match it line-by-line against your purchase register.
- Claim ITC only for invoices reflected in GSTR-2B.
- Flag mismatches, missing invoices, and duplicate entries for follow-up with vendors — do not adjust ITC unilaterally without a matching document.
Compute Net Tax Liability
Calculate output tax from your filed GSTR-1, deduct eligible ITC from GSTR-2B, and separately compute IGST, CGST, and SGST/UTGST liability. Include reverse charge mechanism (RCM) liability where applicable, which must be paid in cash and cannot be offset against ITC on the same transaction.
Create Payment Challan and Deposit Tax
Generate Form PMT-06 on the portal for the net cash tax payable and pay via net banking, NEFT/RTGS, or over-the-counter (for amounts within the permitted limit). The amount credits your Electronic Cash Ledger, from which the GSTR-3B liability is offset at filing.
File GSTR-3B by the 20th
Open GSTR-3B for the period. Review the auto-populated figures drawn from your filed GSTR-1 and GSTR-2B — these are largely locked for direct editing under the current portal rules, so any correction should already have been routed through GSTR-1A. Offset the liability using the Cash and Credit Ledger balances, then submit and file using DSC or EVC.
Archive Filing Acknowledgments
Download and save the ARN (Application Reference Number) receipts for both GSTR-1 and GSTR-3B, along with the payment challan. Retain these for at least the statutory record-keeping period, since they are the primary evidence in any departmental audit or notice.
Common mistakes to avoid
- Filing GSTR-1 after the 11th — this delays your buyers' ITC via GSTR-2B/IMS and attracts a late fee (commonly ₹50/day, ₹20/day for nil returns) subject to a cap — confirm the current schedule on the portal.
- Claiming ITC for invoices not reflected in GSTR-2B — such claims are disallowed on scrutiny and reversed with interest.
- Treating GSTR-3B's auto-populated figures as freely editable — corrections to outward-supply data generally need to go through GSTR-1A, not a manual overwrite in 3B.
- Ignoring buyer actions in the Invoice Management System until after GSTR-3B is filed — unresolved rejections or pending flags can cause ITC disputes downstream.
- Not reversing ITC on non-business or blocked-credit expenses — ITC is available only for goods and services used in the course or furtherance of business, and certain categories remain permanently blocked.
- Missing HSN-wise summary reporting requirements — incomplete or incorrect HSN codes at the prescribed digit level can trigger portal validation errors or notices.
- Letting GSTR-1 and GSTR-3B outward-supply figures diverge — if 3B liability is materially lower than GSTR-1, it reads as understatement and invites interest and penalty on the shortfall.
- Paying tax via challan but forgetting to actually file GSTR-3B — the payment alone does not complete the return; the ARN is only generated on filing.
Frequently asked questions
What is the QRMP scheme and who is eligible?
The Quarterly Return Monthly Payment (QRMP) scheme lets taxpayers with annual aggregate turnover up to ₹5 crore file GSTR-1 and GSTR-3B quarterly while paying tax monthly through a fixed-sum or self-assessed challan. It reduces the compliance burden for small businesses but still requires monthly cash payment to avoid interest.
Can I amend a filed GSTR-1?
Yes, in two ways: minor B2B invoice corrections can traditionally be made in the amendment tables of a subsequent month's GSTR-1, and GSTR-1A allows in-period corrections after the original GSTR-1 is filed but before GSTR-3B for the same period is filed.
What is the Invoice Management System (IMS) and why does it matter?
IMS is the portal facility where buyers review each invoice reported in your GSTR-1/IFF and accept, reject, or keep it pending. Their action determines whether the invoice flows into their GSTR-2B for ITC. As a supplier, monitoring IMS lets you catch disputes early rather than discovering them as ITC mismatches later.
What happens if I miss the GSTR-3B deadline?
A late fee applies per day of delay (commonly ₹50/day, lower for nil returns), capped at a maximum per return, plus interest on any tax paid late — confirm the current rates on the GST portal, as these are revised periodically.
Is GSTR-1 filing mandatory even with no sales in a month?
Yes. A nil GSTR-1 must still be filed. Eligible taxpayers can file a nil GSTR-1 via SMS to the designated short code without logging into the portal, though verifying the current SMS format on the official GST portal is recommended before relying on it.
Can GSTR-3B liability be edited manually if it doesn't match my books?
Only to a limited extent. Since the portal locked several auto-populated fields, the recommended path for correcting outward-supply figures is to file GSTR-1A before the GSTR-3B deadline rather than editing GSTR-3B directly. Persistent discrepancies should be resolved with a tax professional before filing.
What is reverse charge mechanism (RCM) and how does it affect my monthly filing?
Under RCM, the recipient of certain notified goods or services pays GST directly instead of the supplier. RCM liability must be discharged in cash — it cannot be set off against available ITC — and is reported separately in both GSTR-3B and, where applicable, GSTR-1.
Do I need a digital signature certificate (DSC) to file GST returns?
Companies and LLPs are generally required to file using a Class 3 DSC. Proprietorships and other entity types can typically use an Electronic Verification Code (EVC) sent to the registered mobile and email instead — confirm the applicable requirement for your entity type on the portal.
What is the HSN summary table and why is accuracy important?
GSTR-1 requires a table summarizing outward supplies by HSN/SAC code and quantity. Reporting at the correct digit level (which depends on your turnover slab) is mandatory, and errors here are a common trigger for portal validation failures or subsequent scrutiny.
Can I file GSTR-3B before filing GSTR-1 for the same period?
No. GSTR-3B relies on data auto-populated from your filed GSTR-1 and the corresponding GSTR-2B, so GSTR-1 for the period must be filed first for GSTR-3B's figures to be accurate.
What records should I retain after filing?
Retain the ARN receipts for both returns, the payment challan (PMT-06), invoice-wise data uploaded, and the GSTR-2B used for ITC reconciliation for the statutory retention period applicable under GST law, as these form the primary support in any departmental review.
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