How to File GSTR-3B FY 2026-27 — ITC Reconciliation Step-by-Step

GSTR-3B has one job: calculate what GST you owe after subtracting what you've already paid through ITC, and pay the balance.

Sounds simple. But since January 2026, the portal actively blocks filing if your ITC claim doesn't match GSTR-2B. Sellers who skip the reconciliation step now don't get a warning — they get a blocked return, a missed deadline, and a late fee. The reconciliation isn't optional anymore.

Here's the complete workflow for FY 2026-27, including the IMS step that most guides published before October 2024 entirely miss.

The GSTR-3B Workflow — Overview

The correct sequence is fixed. Do not file GSTR-3B before completing each step in order: Your Sales Register ↓ Reconcile with GSTR-1 (filed by the 11th) ↓ Review IMS dashboard (action on supplier invoices by 13th) ↓ GSTR-2B generated by portal (14th of the month) ↓ Reconcile GSTR-2B vs your purchase register ↓ File GSTR-3B (due 20th)

Skip any step and you either claim wrong ITC or get blocked by the portal. Either outcome costs money.

Step 1 — Reconcile Your Outward Supplies with GSTR-1

Before touching GSTR-3B, confirm that your GSTR-1 for the period has been filed and the numbers are correct.

Pull your sales register for the month. Compare total taxable value and total tax against what you filed in GSTR-1. They must match.

If GSTR-1 was filed with an error — wrong tax amount, missed invoice, wrong HSN — you have two options:

The error can be corrected via amendment in next month's GSTR-1
Your GSTR-3B for the current month must still declare the correct tax liability, not the erroneous GSTR-1 figure

The GST portal auto-populates GSTR-3B Table 3.1 (outward supply liability) from your filed GSTR-1. Verify these figures before accepting them. If there's a discrepancy, override manually with the correct figure and note the reason for records.

Step 2 — Use the IMS Dashboard (Action by the 13th)

The Invoice Management System is the step most sellers are skipping — and it's now directly linked to their GSTR-2B.

You'll see all inward supply invoices your vendors have filed against your GSTIN. For each invoice, you have three options:

Accept — Invoice flows into your GSTR-2B as eligible ITC
Reject — Invoice is removed from GSTR-2B (use if the invoice is wrong or not related to your business)
Pending — Invoice is flagged for review; flows into next month's GSTR-2B if not actioned

For most e-commerce sellers with straightforward purchase invoices, the practical approach: review the IMS dashboard for anomalies (unknown vendors, duplicate invoices, invoices from suppliers you haven't dealt with). Accept the rest. Flag anything unusual.

The 13th cutoff: Any IMS action taken after the 13th but before you file GSTR-3B requires you to click "Recompute" in GSTR-3B to update your GSTR-2B figures. If you don't recompute, you're filing against stale data.

Step 3 — Download and Reconcile GSTR-2B

GSTR-2B is generated by the portal on the 14th of every month. It is a static statement — once generated, it doesn't change regardless of what your suppliers file afterward.

Download it: GST portal → Services → Returns → GSTR-2B → Download.

Open it alongside your purchase register for the month. Match every eligible invoice:

First reconciliation — GSTR-2B vs your purchase register:

Invoice in GSTR-2B AND in your books → Claim ITC ✅
Invoice in your books but NOT in GSTR-2B → Do NOT claim this month; follow up with supplier to file their GSTR-1 with your invoice
Invoice in GSTR-2B but NOT in your books → Do not claim; verify with your team — it may be a duplicate or wrong GSTIN entry

Second reconciliation — GSTR-2B vs IMS actions: Confirm that your IMS accepts, rejects, and pending actions are reflected in the GSTR-2B totals. If you rejected an invoice in IMS but it still shows in GSTR-2B, click Recompute before filing.

Sonal runs a handloom brand sourcing fabric from 12 suppliers in Surat and Varanasi. In March 2026, three suppliers totalling ₹18,000 in ITC hadn't filed their GSTR-1 before the 13th. Their invoices didn't appear in her GSTR-2B. She claimed only the ₹82,000 in GSTR-2B — not the full ₹1,00,000 she'd spent. When all three filed in April, the ₹18,000 appeared in her April GSTR-2B and she claimed it the following month. No notice, no penalty — because she stayed within GSTR-2B limits. A seller who claimed the full ₹1,00,000 in March would have had a blocked return.

Step 4 — Open GSTR-3B and Fill Each Table

GST portal → Services → Returns → Returns Dashboard → Select month → GSTR-3B → Prepare Online.

Table 3.1 — Outward Supply Liability

Auto-populated from GSTR-1. Verify and confirm:

3.1(a): Outward taxable supplies (other than zero-rated and nil)
3.1(b): Outward taxable supplies (zero-rated — exports)
3.1(c): Other outward supplies (nil rated, exempted)
3.1(d): Inward supplies on which you pay RCM (reverse charge)
3.1(e): Non-GST supplies

For a marketplace seller with only domestic B2C sales, you'll primarily fill 3.1(a). Exporters on e-commerce fill 3.1(b).

Table 4 — Input Tax Credit

This is where the January 2026 restriction bites.

4(A): Eligible ITC → Enter from your reconciled GSTR-2B total. Do not enter a figure higher than GSTR-2B eligible ITC — portal will block filing.
- 4(A)(5) is the most-used row: "All other ITC" — your regular purchase invoices from vendors
4(B): ITC reversals
- 4(B)(1): Permanent reversals — ITC on blocked credits under Section 17(5) (personal use items, motor vehicles, food, etc.)
- 4(B)(2): Temporary reversals — ITC on invoices unpaid beyond 180 days
4(C): Net ITC available → Auto-calculated = 4(A) minus 4(B)

Blocked credits under Section 17(5) — sellers commonly miss these:

Food and beverages provided to staff (not deductible as ITC)
Health and beauty products purchased for employee gifting
Club memberships, health club expenses
Motor vehicle purchase or lease (unless you're in the vehicle business)

If you accidentally claim ITC on any blocked category, you must reverse it in 4(B)(1). Claiming blocked ITC is one of the most common reasons for GST notices.

Table 5 — Exempt, Nil, and Non-GST Inward Supplies

Declare any purchases from unregistered suppliers or for exempt supplies. Most marketplace sellers can skip this or enter zero.

Table 6 — Payment of Tax

The final calculation:

Tax payable (from Table 3.1 liability)
Less: ITC from Table 4(C)
= Net cash payable

Pay the balance in cash via your GST Electronic Cash Ledger before filing. You cannot file GSTR-3B with an outstanding cash liability.

GST is paid via challan: GST portal → Services → Payments → Create Challan. Use NEFT, RTGS, or net banking. Credit reflects in your cash ledger within minutes for online payments.

Table 9 — TCS Credit from E-commerce Operators

This is money most marketplace sellers are leaving on the table.

Amazon, Flipkart, and Meesho deduct 1% GST TCS on your net taxable value and deposit it to the government against your GSTIN. It auto-appears in Table 9 of your GSTR-3B after the marketplace files their GSTR-8.

Verify the Table 9 figure against your settlement reports each month. If TCS appears in your settlement report but not in Table 9, the marketplace hasn't filed their GSTR-8 yet — raise a ticket and wait before filing, or file without it and claim next month.

Never manually enter a TCS figure that isn't in GSTR-2B / auto-populated in Table 9. Over-claiming TCS is treated as ITC fraud.

Step 5 — Review, Submit, and File

Click Preview → verify all table totals → click Submit GSTR-3B.

Submission freezes your data. After submission, click File GSTR-3B. Authenticate via EVC (OTP) or DSC.

Your ARN confirms filing. Download the filed return summary — this is required for bank loan applications, GST audit responses, and GSTAT appeals.

The GSTR-1 vs GSTR-3B Reconciliation — Do This Every Month

The GST department cross-validates GSTR-1 and GSTR-3B data automatically after filing. A mismatch in either direction triggers a scrutiny notice under Section 61.

GSTR-1 Figure	GSTR-3B Should Show	What Mismatch Means
Taxable value ₹80L	Tax liability based on ₹80L	Under-declared liability in 3B → demand + interest
Tax amount ₹14.4L	₹14.4L in Table 3.1	Over-declared in 3B → excess payment (refund eligible)
Zero-rated exports ₹10L	₹10L in 3.1(b)	Mismatch triggers LUT/bond verification

Keep both reconciled before filing either return. The safest practice: file GSTR-1 by the 9th, reconcile both statements by the 17th, file GSTR-3B by the 19th.

The Common ITC Mistakes That Cause Notices

Claiming ITC not in GSTR-2B — The January 2026 portal update blocks this at filing. Before January 2026, it was possible and commonly done. Many pending notices are for this exact issue from FY 2024-25 returns.
Not reversing ITC on goods returned or invoices unpaid beyond 180 days — Required under Rule 37. If you bought ₹1L of inventory in October 2025, claimed ₹18,000 ITC, and still haven't paid the vendor by April 2026 (180 days later), you must reverse the ₹18,000 ITC in your April 2026 GSTR-3B.
Claiming ITC on Section 17(5) blocked credits — Motor vehicles, food, membership fees. These are blocked by law regardless of whether they appear in GSTR-2B.
Missing TCS credit month after month — Some sellers simply never look at Table 9. At 1% of GMV, a seller doing ₹15L/month accumulates ₹1,800/month in TCS. Over a year, that's ₹21,600 sitting unclaimed — a free working capital infusion waiting in the filing form.

File GSTR-1 first — step-by-step guide for sellers → Full compliance calendar: every GST due date FY 2026-27 → GST 2.0 ITC changes — what changed in October 2024 →

The 20th arrives twelve times a year. A seller who has reconciliation built into their monthly routine — invoices checked on the 9th, IMS actioned by the 13th, GSTR-2B reviewed by the 17th, GSTR-3B filed by the 19th — spends less than two hours per month on GST compliance and never sees a notice. The seller who does it in a rush on the 20th evening is one reconciliation error away from one.

How to File GSTR-3B: ITC Reconciliation and Step-by-Step Guide (FY 2026-27)