How to report Interstate supply to unregistered person in GSTR-3B

How to report Interstate sales to unregistered person in GSTR-3B

Goods and service Tax (“GST”) is a consumption/destination based tax, i.e., GST revenue generated out of supply of goods/services accrues to that state wherein such goods/services gets consumed. Information about consuming states is collected by government from data provided by the taxpayers in their GST returns.

Accordingly, in case of inter-state supply (from one state to another), to ensure correct allocation of revenue among states, details of consuming states (i.e., place of supply) is required to be correctly reported in GST returns.

However, it has been noticed by the department under GST Audit that taxpayers have failed to report inter-state supplies to unregistered persons appropriately. Such supplies are reportable grossly in Table 3.2 of Form GSTR-3B and rate-wise in Table 7B of GSTR-1 (invoice value less than INR 2.5 Lacs).

As observed, registered taxpayers have disclosed details of such supply in GSTR-1 properly but failed to report the Interstate supply to unregistered person in GSTR-3B which consequent in:

  • Incorrect allocation of IGST amount to consuming states
  • Mis-match between the quantum of goods or services actually supplied in a state and corresponding allocation of tax against such goods/services.

Accordingly, department has issued circular  89/08/2019-GST dated 18th February, 2019 instructing all registered taxpayers to report details of such inter-state supplies to unregistered dealer properly as:

Table 3.2 of GSTR-3B wherein details required for Interstate supply to unregistered person are:

  • Place of supply (Refer Section 10 & 12 of Integrated Goods and Service Tax Act, 2017),
  • Total Taxable Value and
  • Amount of IGST.

Below is the screen shot of Table 3.2 of GSTR-3B Return

3.2 of GSTR 3B

Table 3.2 of GSTR 3B Return

Table 7 of GSTR-1 (Value of invoice less than INR 2.5 Lacs) contains following details:

  • Place of supply
  • GST Rate
  • Taxable Value
  • Amount of IGST
GSTR 1 Table 7
Table 7 of GSTR 1 Return

Incorrect reporting will lead to invocation of penalty proceeding under Section 125 of Central Goods and Service Tax Act, 2017 against such taxpayers.



Read our article on Amendment, Corrections and Rectifications of GSTR-3B returns

Also find more detail on Various Returns under Goods and Service Tax (GST)


DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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