Library / Goods and Services Tax: The Professional's Master Guide

45. Case Study 1: Monthly GSTR-3B of a Trading Company

45.1 Facts

Suryoday Electricals Pvt. Ltd. is a trader in switchgear, cables and fittings with one registration in Ahmedabad, Gujarat. All its goods are taxed at 18%. The company was incorporated in 2023 and paid income tax of Rs. 62,000 for FY 2023-24 and Rs. 88,000 for FY 2024-25. Its electronic credit ledger had no opening balance for November 2025. The accountant has prepared the following data for the GSTR-3B of November 2025.

Inward supplies for the month, as seen in GSTR-2B and in the purchase register, were as follows.

One more item needs attention. A supplier invoice dated 10 May 2025 for goods of Rs. 3,00,000 (CGST Rs. 27,000, SGST Rs. 27,000) was taken as credit in the May 2025 return, filed on 20 June 2025. The supplier has not been paid because of a quality dispute.

45.2 Issues

• Which tables of GSTR-3B carry each figure, and what is auto-populated.
• Tax payable under reverse charge on legal fees and freight, and credit of that tax.
• Blocked credit under section 17(5) on car repair and staff food.
• Reversal under rule 37 for the unpaid supplier, with interest.
• Set-off in the order laid down in section 49 and rule 88A, cash payable, and the 1% cash test of rule 86B.

45.3 Analysis and computation

Reverse charge. Legal services by an advocate or firm of advocates to a business entity are taxed in the hands of the recipient under section 9(3). Freight paid to a GTA that has not opted for forward charge is also taxed in the hands of a registered recipient at 5%. Both amounts are paid in cash; the ITC on them is available in the same return because the services are used for business. The 5% without-credit condition binds the GTA, not the recipient.

Blocked credit. Repair of a motor car used by a director is blocked by section 17(5)(ab) read with (a), since the car is not used for transport of goods, passengers or training. Food supplied to staff is blocked by section 17(5)(b)(i). Both are shown in Table 4A and reversed in Table 4B(1).

Rule 37. The 180th day from 10 May 2025 is 6 November 2025, which falls in November. The credit of Rs. 54,000 must be added back in the November return. It goes in Table 4B(2) because it can be reclaimed when the supplier is paid. Interest under section 50 is payable where the credit had been utilised. The company used its whole ledger every month, so interest runs from 21 June 2025 to 20 December 2025, 183 days.

The ITC position for Table 4 is then:

Set-off. IGST credit is used first against IGST. CGST credit then goes against CGST and SGST credit against SGST. Nothing is left to use across heads.

45.4 Compliance and documentation

• GSTR-1 for November 2025 by 11 December 2025: B2B invoices invoice-wise, B2C inter-State invoices of value above the prescribed limit individually, other B2C in summary. Annual turnover is above Rs. 5 crore, so B2B invoices carry an IRN.
• GSTR-3B by 20 December 2025. Table 3.1(a) is auto-populated from GSTR-1 and cannot be edited; errors are corrected in GSTR-1A before filing. Table 3.1(d) carries the reverse charge value and tax. Table 3.2 shows Rs. 2,00,000 supplied to unregistered persons in Rajasthan.
• Self-invoice for the advocate fees and the GTA freight, and a payment voucher on payment.
• A rule 37 register listing unpaid invoices by age. When the supplier is paid, the Rs. 54,000 is reclaimed in Table 4A(5) and also shown in Table 4D(1).

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