February 20, 2023
Pranjal Gupta

GSTR 3B Return Advisory: Notices From State Governments  Way Forward

Goods and Services Tax (GST) was introduced in India on July 1, 2017, with a vision to simplify the tax structure and make it more transparent. It is a destination-based tax system, meaning the tax is levied on the final consumer. GST encompasses all indirect taxes levied by the central and state governments.

Under GST, businesses are required to file monthly, quarterly, and annual returns depending on the turnover. One of the most crucial returns is the GSTR-3B return, which is a summary of all transactions made in a particular month. The deadline for filing GSTR-3B is the 20th of every month.

Recently, many taxpayers have received notices from state governments regarding discrepancies in their GSTR-3B returns. Such notices create confusion and stress amongst taxpayers, especially small and medium business owners and startup founders.

Why are State Governments issuing notices for GSTR-3B returns?

State Governments have been empowered to monitor the GST compliance of taxpayers within their respective states. They have access to all the data filed by taxpayers and can scrutinize the returns to check for any discrepancies.

Based on the data provided by taxpayers in their GSTR-3B returns, the state governments can calculate the amount of tax payable, tax paid, and the difference between the two. If there is any discrepancy in the data, the state government issues notices to taxpayers to rectify the same.

The notices issued by state governments to taxpayers are based on their internal audit reports. The audit reports reveal discrepancies such as excess input tax credit claimed, under-reporting of sales, or incorrect tax calculations.

What should taxpayers do if they receive a notice?

If you are a taxpayer who has received a notice from the state government regarding your GSTR-3B returns, do not panic. The notice is an opportunity for you to rectify the discrepancies and comply with the GST regulations.

Firstly, read the notice carefully and understand the discrepancies pointed out by the state government. The notice would contain details such as the period for which the notice is issued, the discrepancies found, and the amount of tax payable.

Once you have understood the discrepancies, review your GSTR-3B returns for the period mentioned in the notice. Check whether the discrepancies pointed out by the state government are accurate. If yes, rectify the discrepancies and pay the amount of tax payable within the stipulated time.

If you disagree with the discrepancies pointed out by the state government, you can file a reply to the notice. The reply should contain the reasons for disagreement and supporting documents. If the state government is satisfied with your reply, they will close the notice. However, if they are not satisfied, they may initiate further proceedings.

It is advisable to seek professional help in case you are unsure about how to proceed with the notice.

The way forward

GST has been implemented with the objective of simplifying the tax structure and making it more transparent. The compliance burden for taxpayers has increased since the introduction of GST. It is important for taxpayers to comply with the GST regulations to avoid notices and penalties.

It is also crucial for state governments to conduct audits and issue notices to taxpayers who are not complying with the GST regulations. Such actions will ensure that the taxpayers comply with the regulations and the tax system remains transparent.


GST has brought about a significant change in the Indian tax system. With the introduction of GST, taxpayers are required to comply with various regulations and file multiple returns. Notices from state governments regarding discrepancies in GSTR-3B returns can create confusion and stress amongst taxpayers.

However, it is important to understand that the notices are an opportunity for taxpayers to rectify the discrepancies and comply with the GST regulations. Seeking professional help and responding to the notice in a timely and accurate manner can help taxpayers avoid penalties and maintain compliance.


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