Filing GSTR-1 and GSTR-3B from your billing software, without a March surprise

GSTR-1 reports what you sold. GSTR-3B is the summary on which you pay. Both are built from the same bills, so in a business with clean books they should agree to the rupee. They usually do not, and the reason is almost never the returns: it is a cash bill entered twice, a credit note dated in the wrong month, a party whose GSTIN is missing so the sale landed in B2C, or ITC claimed from an invoice the supplier never filed. This is the monthly routine that keeps the two together, and what software must do to make it possible.

The calendar

Two rules have tightened in recent periods and are worth knowing. Returns can no longer be filed beyond three years from their original due date, so an old pending period does not stay open forever. And the auto-populated liability in GSTR-3B is being locked, with corrections made through GSTR-1A before 3B rather than by typing over the 3B figure. Both push in the same direction: the bills have to be right in the books, because the return is becoming a mirror rather than a form.

What the billing software has to get right

• Place of supply, derived from the party's GSTIN state, because it decides IGST against CGST and SGST. Get this wrong and the tax is right in total and wrong in every table.
• The B2B and B2C split, and within B2C the large inter-state invoices that are reported individually rather than as a consolidated figure.
• Credit and debit notes linked to the original invoice, in the period they were issued.
• HSN summary at the right number of digits: four for smaller taxpayers, six above ₹5 crore of turnover, with quantity and unit in the codes the portal accepts. Table 12 now uses a dropdown of valid codes and is split between B2B and B2C, so a free-typed HSN that was tolerated for years is no longer tolerated.
• Exempt, nil-rated and non-GST supplies shown separately rather than buried in taxable value.
• A JSON export the portal accepts without a schema error, and the same figures visible on screen first.

In Tatva ERP the GSTR-1 view shows B2B, B2C, credit notes and the HSN summary with drill-down to the bills behind every figure, and one keystroke downloads the portal JSON. GSTR-2 lists purchases and the input tax credit they carry. GSTR-3B is computed with the set-off order in rule 88A, so IGST credit is used first and the split between CGST and SGST follows the rule rather than someone's preference.

The monthly routine that prevents March

1. On the first working day of the month, close the previous month for entry, or at least fix a date after which nobody back-dates a bill without permission.
2. Run the sale register for the month and compare the total with the GSTR-1 summary. A difference here is a data problem, not a return problem.
3. Check the parties with a blank or invalid GSTIN. Every one of them has silently moved a B2B sale into B2C.
4. Download GSTR-2B from the portal and match it against your purchase register. Input tax credit can only be claimed on what appears in 2B, so an invoice your supplier has not filed is not yours to claim yet.
5. List the mismatches and call the suppliers. This is the step everyone skips and the only one that recovers money.
6. File GSTR-1, check what it has auto-populated into GSTR-3B, and pay.
7. Keep the register export and the filed return together, one folder per month. When a notice arrives two years later, that folder is the answer.

A business that does this every month spends about an hour on it. A business that does not spends a week in March trying to remember what a cash sale in July was.

Why books and returns drift apart

Four of those five are fixed in the masters or in the process, not in the return. That is the whole argument for entering bills properly in a system that validates as you type.

Frequently asked questions

Can billing software file my GST return automatically?

It can prepare the return and produce the JSON that the GST portal accepts, and that is what most billing software does, Tatva ERP included. Filing itself is an authenticated act on the portal, with your credentials and an OTP or DSC. Be careful with any vendor who offers to file without you being involved.

How many HSN digits do I have to report?

Four digits if your aggregate annual turnover is up to ₹5 crore, six digits above it, for B2B supplies, with the portal now offering the codes from a dropdown rather than accepting free text. Set the HSN on the item master once and every bill and every return inherits it.

What if my GSTR-3B does not match my GSTR-1?

Find the difference before you file, not after. The common causes are credit notes in a different period, a cancelled invoice still in the return, and back-dated entries. Where GSTR-1 itself needs correcting before 3B, the amendment route is GSTR-1A for that period rather than editing the 3B figure.

Do I need separate return software?

If your billing system produces the registers, the HSN summary and a valid JSON, usually not. Separate return software earns its price when you have many GSTINs, heavy 2B reconciliation across hundreds of suppliers, or a practice filing for many clients.