Key points
- GSTR-3B liability from GSTR-1 is locked; fix errors through GSTR-1A.
- Claim ITC only from GSTR-2B and use IMS every month.
- Keep an RCM register; the list includes commercial rent from unregistered landlords.
- Returns more than three years past due can no longer be filed.
Most GST notices today are generated by data matching, not by an officer reading your file. The portal compares what you reported in one return with another return, with your suppliers’ filings and with e-way bill and e-invoice data. When the numbers do not line up, a notice follows. These are the five gaps that cause the most trouble.
1. Sales in GSTR-1 do not match GSTR-3B
GSTR-1 reports outward supplies invoice by invoice; GSTR-3B is where tax is paid. If GSTR-1 shows higher liability than GSTR-3B for the same period, the difference is flagged and can lead to a notice in DRC-01B asking you to pay or explain. The liability auto-populated in GSTR-3B from GSTR-1 is now locked, so corrections have to be made through GSTR-1A before GSTR-3B is filed, not by editing GSTR-3B.
Fix: reconcile books, GSTR-1 and the GSTR-3B draft every month before filing, and correct errors through GSTR-1A or credit notes in the right period.
2. Claiming ITC that is not in GSTR-2B
Input tax credit is available only when the supplier has reported the invoice and it appears in your GSTR-2B. Claiming credit from your purchase register alone creates a gap that is flagged through DRC-01C. The Invoice Management System (IMS) now lets you accept, reject or keep pending each inward invoice before GSTR-2B is finalised, so use it.
Fix: claim ITC only from GSTR-2B, act on IMS every month, and follow up with suppliers whose invoices are missing. Also track the 180-day rule: credit must be reversed if the supplier is not paid within 180 days of the invoice date.
3. Missing reverse charge (RCM)
For some supplies, the recipient pays the GST. Common examples: legal services from an advocate to a business entity, services of a goods transport agency that has not opted to pay tax itself, import of services, security services from a non-corporate supplier, director sitting fees, and renting of commercial property by an unregistered landlord to a registered tenant (composition-scheme tenants are excluded from the last two). RCM paid in cash can be claimed as ITC, but only after it is paid.
Fix: keep a monthly RCM register mapped to ledger heads such as legal fees, freight, rent and security.
4. Wrong or missing HSN/SAC codes
Businesses with turnover up to ₹5 crore must report at least 4-digit HSN codes on B2B invoices; above ₹5 crore, 6-digit codes are required on all invoices. The HSN summary in GSTR-1 must also agree with the invoices. Wrong codes can also mean a wrong tax rate, which matters more after the rate rationalisation of 22 September 2025.
Fix: maintain an item master with HSN and rate, review it after every rate notification, and validate the HSN summary before filing GSTR-1.
5. Treating GSTR-9 as a formality
The annual return is where monthly errors surface: turnover not matching the books, ITC claimed in the wrong year, or credit notes not reported. GSTR-9 is optional for turnover up to ₹2 crore, and GSTR-9C (a self-certified reconciliation) applies above ₹5 crore. Differences found at this stage often lead to scrutiny under section 61 through ASMT-10.
Fix: reconcile turnover, tax paid and ITC against audited financial statements before filing, and pay any shortfall through DRC-03 with interest.
Watch the three-year filing limit
A GST return can no longer be filed once three years have passed from its due date. Old pending GSTR-1, GSTR-3B or GSTR-9 returns cannot be regularised later, so clear any backlog now.
If you have already received a notice
- Identify the form (ASMT-10, DRC-01A, DRC-01, DRC-01B, DRC-01C) and the reply date.
- Reconcile the specific mismatch before replying; a generic reply rarely closes a notice.
- Reply on the portal with working papers. If you accept part of the difference, pay it through DRC-03 with interest to limit exposure.
- Keep an eye on the time limits for appeal if an order is passed.
The GST late fee and interest calculator helps estimate the cost of delayed returns.
Frequently asked questions
Can I edit the GST liability in GSTR-3B?
Can I claim ITC if the invoice is not in GSTR-2B?
Is GSTR-9 mandatory?
What is the time limit to file old GST returns?
Chartered Accountant since 2019, with experience across income-tax litigation, CFO advisory and corporate finance in hospitality, agri-tech and manufacturing. Maintains the TaxSphere case-law library.