Day 22: GSTR-1, GSTR-3B & ITC Set-off
✅ Today you will learn
- Know what goes into each GSTR-1 table
- Prepare GSTR-3B: outward tax, RCM and ITC
- Compute set-off and cash payable
- Record the GST payment and set-off in TallyPrime
- Reconcile purchase ITC with GSTR-2B
🏢 In the real world
It is 8 July 2026. Rohit’s GSTR-1 for June is due on 11 July and GSTR-3B on 20 July. The owner wants to know one number: how much cash goes to the government this month. You will produce both returns from TallyPrime and prove that number.
Which return, when
| Return | What it contains | Monthly due date |
|---|---|---|
| GSTR-1 | Invoice-wise B2B, summary B2C, exempt, HSN, documents – your sales | 11th of next month (quarterly filers: IFF for B2B + GSTR-1 after the quarter) |
| GSTR-2B | Auto-drafted ITC statement from your suppliers’ GSTR-1 – read-only | Generated on the 14th |
| GSTR-3B | Summary return: output tax, ITC, payment | 20th of next month (QRMP: 22nd/24th after the quarter) |
In TallyPrime: Display More Reports → GST Reports → GSTR-1 / GSTR-3B (or Alt+G and type the name). Each report shows included transactions and any “uncertain” ones that need correction before filing. Export with Ctrl+E (JSON/Excel) for the GST portal, or upload directly if you use TallyPrime’s connected GST features.
GSTR-1 for June 2026
| Table | Details | Taxable / count | Tax |
|---|---|---|---|
| 4A – B2B invoices | 1 invoice to Capital Office Supplies (07…) | 49,600 | IGST ₹8,928 |
| 7 – B2C (others), rate-wise | Uttar Pradesh, 18% | 43,000 | CGST ₹3,870 + SGST ₹3,870 |
| 8 – Nil-rated / exempt | Intra-state to unregistered | 10,200 | – |
| 12 – HSN summary | 3 HSN codes | 1,02,800 | See table below |
| 13 – Documents issued | Invoices RS/26-27/101 to 103 | 3 | 0 cancelled |
HSN summary (table 12)
| HSN | Description | Qty | Rate | Taxable (₹) | IGST | CGST | SGST |
|---|---|---|---|---|---|---|---|
| 4802 | A4 Copier Paper 75 GSM | 280 | 18% | 85,600 | 8,100 | 3,654 | 3,654 |
| 4820 | Notebook 200 Pages | 300 | 0% | 10,200 | – | – | – |
| 9608 | Ball Pen Blue | 60 | 18% | 7,000 | 828 | 216 | 216 |
GSTR-3B for June 2026
| Table | Taxable (₹) | IGST | CGST | SGST |
|---|---|---|---|---|
| 3.1(a) Outward taxable supplies | 92,600 | 8,928 | 3,870 | 3,870 |
| 3.1(c) Nil-rated / exempt | 10,200 | – | – | – |
| 3.1(d) Inward supplies liable to reverse charge | 10,000 | – | 900 | 900 |
| 4A(3) ITC – inward supplies under reverse charge | – | 900 | 900 | |
| 4A(5) ITC – all other | – | 8,010 | 8,010 | |
| Net ITC available | – | 8,910 | 8,910 |
Rohit paid ₹10,000 legal fees to an advocate – under reverse charge he must pay CGST ₹900 + SGST ₹900 himself (Day 23). That tax is paid in cash; once paid, the same amount is available as ITC in the same return.
Set-off
| Tax | Output tax | ITC available | Pay in cash | Credit carried forward |
|---|---|---|---|---|
| IGST | 8,928 | 0 | 0 | 0 |
| CGST | 3,870 | 8,910 | 0 | 0 |
| SGST | 3,870 | 8,910 | 0 | 1,152 |
| Total | 16,668 | 17,820 | 0 | 1,152 |
| Credit used | Against liability | ₹ |
|---|---|---|
| CGST credit | against CGST | 3,870 |
| CGST credit | against IGST | 5,040 |
| SGST credit | against SGST | 3,870 |
| SGST credit | against IGST | 3,888 |
Result: forward-charge tax is fully covered by ITC (no IGST credit, so CGST and SGST credits pay their own heads first and then IGST). Cash payable for June = RCM ₹1,800 only. SGST credit of ₹1,152 carries forward to July.
Rohit also makes exempt sales (notebooks). ITC on inputs used for both taxable and exempt supplies (such as the legal fee) must be partly reversed under rule 42. It is ignored here to keep the example readable – in real work, compute it every month.
Set-off and payment entries in TallyPrime
| Particulars | Debit | Credit | |
|---|---|---|---|
| Dr | Output CGST | 3,870 | |
| Dr | Output SGST | 3,870 | |
| Dr | Output IGST | 8,928 | |
| Cr | Input CGST | 8,910 | |
| Cr | Input SGST | 7,758 | |
| Total | 16,668 | 16,668 |
| Particulars | Debit | Credit | |
|---|---|---|---|
| Dr | RCM CGST Payable | 900 | |
| Dr | RCM SGST Payable | 900 | |
| Cr | SBI Bank | 1,800 | |
| Total | 1,800 | 1,800 |
GSTR-2B reconciliation
ITC is claimed only for invoices that appear in GSTR-2B. Download GSTR-2B (JSON) from the portal and import it in TallyPrime’s GSTR-2B reconciliation report. Each purchase is marked Matched, Mismatched (amount/number/date) or Not in 2B.
| Status | Meaning | Action |
|---|---|---|
| Matched | Supplier filed exactly what you booked | Claim ITC |
| Mismatched | Different invoice no., date or amount | Correct your entry if you erred; else ask the supplier to amend |
| Not in 2B | Supplier has not filed yet | Do not claim; follow up and claim when it appears |
Solved examples
Example 1: Prove the cash payable
Output tax ₹16,668 (IGST 8,928 + CGST 3,870 + SGST 3,870). Forward-charge ITC ₹16,020 + RCM ITC ₹1,800 = ₹17,820 available. After set-off, forward tax payable = ₹0; credit left ₹1,152 (SGST). Add RCM paid in cash ₹1,800 → total cash ₹1,800.
Practice exercises (unsolved – answer hidden)
Try each exercise on paper or in TallyPrime first, then open the answer to check.
🏋️ Practice – do it yourself
Show solution
Credits: CGST ₹2,100, SGST ₹3,252. Steps: CGST → CGST ₹2,100; SGST → SGST ₹3,252. Cash: IGST ₹5,400, CGST ₹4,200, SGST ₹3,048 = ₹12,648.Show solution
Do not claim the ₹9,000 ITC this month. Follow up with the supplier; claim it in the month it appears in GSTR-2B (within the time limit).🏅 Job skills unlocked today
Quick quiz
🧠 Quick Quiz – test yourself
Interview corner
💼 Interview Corner
What is the difference between GSTR-1 and GSTR-3B?
GSTR-1 reports outward supplies in detail (invoice-wise for B2B) and feeds the buyers’ GSTR-2B; GSTR-3B is the summary return where you declare output tax, claim ITC and pay the tax.
How do you reconcile ITC before filing GSTR-3B?
Download GSTR-2B, import it in TallyPrime’s reconciliation, resolve mismatches, and claim ITC only on matched invoices; keep a list of pending invoices to follow up.
Summary
- GSTR-1 by the 11th, GSTR-3B by the 20th (monthly filers).
- June: output ₹16,668, ITC ₹17,820, cash only RCM ₹1,800, SGST credit ₹1,152 carried forward.
- RCM is always paid in cash, then claimed as ITC.
- Claim ITC only for invoices in GSTR-2B.
Day 23: e-way bill, e-invoice and reverse charge in TallyPrime.
Frequently Asked Questions
What if I find a mistake after filing GSTR-1?
Is late filing penalised?
Tally and TallyPrime are trademarks of Tally Solutions Pvt. Ltd. This is an independent course, not affiliated with or endorsed by Tally Solutions. All business names, GSTINs and figures in the examples are fictional samples.
