GSTR-1 — Your Sales Return

Friday morning. Sharma Sir called Meera and Negi Bhaiya into his cabin. "Bisht Ji's GSTR-1 for January is due on the 11th of February. That's four days away. Meera, I want you to prepare it. Negi Bhaiya will guide you." Meera felt nervous. She had understood GST in theory, but this was real — filing an actual return for a real client with the government. "Don't worry," Negi Bhaiya said, putting a hand on her shoulder. "We'll take the data from ERPLite. Most of the work is already done. You just need to verify and organize it."

What is GSTR-1?

GSTR-1 is a return (a report filed with the government) that contains details of all your outward supplies — in simple words, all your sales for the month.

Every registered taxpayer under GST (except those under the Composition Scheme) must file GSTR-1.

Think of it this way: The government wants to know — who did you sell to, how much did you sell, and how much GST did you charge? GSTR-1 is where you report all of this.

Who Files GSTR-1?

• Every person registered under Regular GST (not Composition Scheme)
• Even if you had zero sales in the month, you must file a Nil GSTR-1

Filing Frequency

QRMP stands for Quarterly Returns with Monthly Payment. Under this scheme, small businesses file GSTR-1 quarterly but still pay GST monthly.

Bisht Ji's turnover is about Rs 90 lakh — under Rs 5 crore. He has opted for the QRMP scheme, so he files GSTR-1 quarterly. But for learning purposes, Sharma Sir wants Meera to practice with monthly data first.

Due Date

For January 2026 (monthly): Due by 11th February 2026.

For October-December 2025 quarter (QRMP): Due by 13th January 2026.

What Goes Inside GSTR-1?

GSTR-1 captures all your sales, but they need to be organized into specific categories. Let us understand each one.

The Main Sections of GSTR-1

Understanding B2B vs B2C

This is a critical distinction in GSTR-1.

B2B (Business to Business): Your buyer is a GST-registered business. You have their GSTIN. Each invoice is reported individually with full details — buyer GSTIN, invoice number, date, value, tax amounts.

Why individually? Because the buyer will claim ITC on this invoice. The government needs to match your B2B invoice with the buyer's ITC claim.

B2C (Business to Consumer): Your buyer is not GST-registered (or you don't have their GSTIN). There are two sub-categories:

• B2C Large: Invoice value is more than Rs 2,50,000. Reported individually (because it is a large transaction).
• B2C Small: Invoice value is Rs 2,50,000 or less. Reported as a summary — total sales grouped by tax rate and state. Individual invoices are not listed.

Bisht Ji's Sales Breakdown for January 2026

Let us organize Bisht Ji's January sales into GSTR-1 categories:

B2B Invoices (Table 4):

All these buyers are GST-registered (they have GSTINs). Each invoice is reported individually.

B2C Small (Table 7):

Some of Bisht Ji's sales were to small shops or walk-in customers who are not GST-registered. These are reported as a summary:

(These were small cash sales to local unregistered shops, all below Rs 2,50,000 per invoice.)

B2C Large (Table 5):

None this month. None of Bisht Ji's sales to unregistered persons exceeded Rs 2,50,000.

Credit Notes (Table 9):

Mountain Spice Mart returned some damaged packets worth Rs 5,000.

HSN Summary (Table 12):

UQC = Unit Quantity Code (Kgs, Pcs, Ltrs, etc.)

The IFF — Invoice Furnishing Facility

If Bisht Ji is on the QRMP scheme (quarterly filing), he still needs to report B2B invoices every month using the IFF (Invoice Furnishing Facility).

Why? Because his B2B customers need to see those invoices in their GSTR-2B to claim ITC. If Bisht Ji waits 3 months to report the invoices, his customers cannot claim ITC for those months.

The IFF is filed by the 13th of the next month (same as the quarterly GSTR-1 due date concept, but monthly for B2B invoices only).

Penalty for Late Filing

"What happens if we file late?" Meera asked.

"Rs 50 per day might not sound like much," Sharma Sir said. "But if you are late by 200 days, that's Rs 10,000. And this is for each return. If you miss 6 months of GSTR-1, that could be Rs 60,000 in penalties. Plus, your customers won't be able to claim ITC until you file. They will stop buying from you."

Other Consequences of Not Filing

• Your customers cannot see your invoices in their GSTR-2A/2B
• Your customers cannot claim ITC on purchases from you
• After a prolonged default, the government can cancel your GST registration
• You cannot file GSTR-3B until GSTR-1 is filed (sequential filing requirement)

Hands-On: Preparing GSTR-1 in ERPLite

Now let us see how Meera prepared Bisht Ji's GSTR-1 using ERPLite.

Step 1: Verify All Sales Invoices

Go to Reports > GST Reports > GSTR-1 Report.

Select period: January 2026.

ERPLite pulls all sales invoices for the month and automatically categorizes them:

• B2B invoices: 6 invoices
• B2C invoices: 3 invoices (all small, under Rs 2,50,000)
• Credit notes: 1
• Debit notes: 0

Meera checked the count. "We issued invoices BT/0141 to BT/0150 in January. That's 10 invoices total. But BT/0143 was cancelled (voided) and BT/0148 and BT/0150 were proforma invoices (not yet converted to sales). So 10 - 3 = 7 actual invoices. Plus one was to an unregistered person, making it 6 B2B + 1 B2C. Wait — there were 3 B2C sales."

Negi Bhaiya checked: "You're right about the count, but remember — BT/0145 was also a B2C sale to a walk-in customer, and BT/0151 was actually a January invoice (dated 30th Jan, but numbered in the 151 series because we crossed into the next batch). Let me check."

After careful verification:

Step 2: Review Each B2B Invoice

For each B2B invoice, Meera verified:

• Buyer GSTIN is correct (cross-checked with buyer master)
• HSN codes are correct
• Tax rates are correct (5% for all spices)
• CGST/SGST or IGST is correctly applied based on state

She found one issue: Invoice BT/0144 to Lake City Store had the GSTIN entered as 05AABCL3456K2Z9 instead of 05AABCL3456K1Z9. A typo in the 13th digit.

"Good catch!" said Negi Bhaiya. "If we file with a wrong GSTIN, Lake City Store won't see this invoice in their GSTR-2B. They'll call and complain. Let me correct it."

He corrected the GSTIN in the party master and in the invoice.

Step 3: Generate the GSTR-1 JSON File

In ERPLite, go to Reports > GST Reports > GSTR-1 Export.

Select period: January 2026.

Click Generate JSON.

ERPLite creates a JSON file that can be uploaded directly to the GST portal. The file contains all the data organized into the GSTR-1 format — B2B invoices, B2C summary, credit notes, HSN summary, and document details.

Step 4: Upload to GST Portal

1. Log in to gst.gov.in with Bisht Ji's credentials.
2. Go to Returns > GSTR-1.
3. Select the period: January 2026.
4. Click Upload JSON (or use the offline tool).
5. Upload the file generated by ERPLite.
6. The portal processes the file and shows a summary.

Step 5: Verify on the Portal

After upload, Meera checked each section on the portal:

Everything matched.

Step 6: File the Return

1. Click Submit. (This locks the data — no more changes possible.)
2. Review the summary one final time.
3. Click File with DSC (Digital Signature Certificate) or File with EVC (Electronic Verification Code via OTP).
4. Enter OTP sent to Bisht Ji's registered mobile.
5. Click File.

Done! Bisht Ji's GSTR-1 for January 2026 is filed.

Meera felt a rush of satisfaction. "My first return!"

Sharma Sir nodded. "Good work. But remember, this is just the sales side. The real payment happens when you file GSTR-3B. That's next."

Common Mistakes in GSTR-1

Sharma Sir shared a list of mistakes he had seen over the years:

"The most common mistake," Sharma Sir said, "is wrong GSTIN. Always verify. One wrong digit and the buyer loses their ITC. That's their money."

Amendments — Fixing Mistakes After Filing

What if Meera discovers an error after GSTR-1 is already filed?

GST allows amendments. You can correct mistakes from a previous month in the next month's GSTR-1.

However, there are limits:

• Amendments for a financial year can be made only until the earlier of: 30th November of next year, or the date of filing the annual return (GSTR-9).
• You cannot amend the GSTIN from unregistered to registered (that would change a B2C invoice to B2B — not allowed as amendment).

"If you find a mistake, fix it in the very next return," Sharma Sir advised. "Don't let it pile up."

Quick Recap

• GSTR-1 reports all your outward supplies (sales) for the period.
• Filed monthly (turnover > Rs 5 crore) or quarterly under QRMP.
• Due date: 11th of next month (monthly) or 13th after quarter end (quarterly).
• Main sections: B2B invoices (individual, with buyer GSTIN), B2C Large (individual, > Rs 2.5 lakh), B2C Small (summary), Credit/Debit Notes, HSN Summary.
• IFF (Invoice Furnishing Facility) lets QRMP taxpayers report B2B invoices monthly.
• Late filing penalty: Rs 50/day (or Rs 20/day for nil), max Rs 10,000.
• ERPLite auto-generates GSTR-1 data from sales invoices. Export as JSON and upload to the GST portal.
• Always verify GSTINs, HSN codes, and invoice counts before filing.
• Mistakes can be amended in the next period's GSTR-1.

Practice Exercise

Exercise 1: Categorize These Sales

Bisht Traders made the following sales in February 2026. Categorize each as B2B, B2C Large, or B2C Small:

1. Rs 1,50,000 to Mountain Spice Mart (GSTIN: 05AABCM5678P1Z2)
2. Rs 45,000 to a walk-in customer (no GSTIN)
3. Rs 3,00,000 to a wedding caterer (no GSTIN)
4. Rs 80,000 to UP Grocers (GSTIN: 09AABCU7890M1Z1)
5. Rs 12,000 to a local chai shop (no GSTIN)
6. Rs 2,80,000 to Delhi Masala House (GSTIN: 07AABCD9876R1Z5)

Exercise 2: Calculate the Penalty

Bisht Ji forgot to file his GSTR-1 for March 2026. He had sales (not nil). He finally filed it on 25th April 2026.

1. How many days late is the filing?
2. What is the late fee?
3. What other consequences might Bisht Ji face?

Exercise 3: Spot the Error

Look at this B2B entry in GSTR-1:

What is wrong? (Hint: Look at the buyer's state and the tax type.)

Exercise 4: GSTR-1 Preparation

Using the following February 2026 sales data for Bisht Traders, prepare a summary of what goes into each section of GSTR-1:

Also, there was 1 credit note: CN/004 dated 18-Feb against BT/0155, value Rs 10,000.

Organize into: B2B (Table 4), B2C Small (Table 7), Credit Notes (Table 9), and HSN Summary (Table 12).

Fun Fact

Before GST, India had no single national system for tracking sales. A seller in Tamil Nadu and a buyer in Uttarakhand filed completely different forms with different state authorities. It was almost impossible to match and verify transactions across states. GSTR-1 changed this — every sale by every registered business in India is now recorded in one central database. The GST Network (GSTN) processes over 800 crore invoices per year. That is more than 200 invoices for every person in India! And it all runs on a technology platform built by Infosys. Every time Meera uploads Bisht Ji's JSON file, she is adding to this massive national database.