Advisory on Confirmation of Tax Liability Breakup in GSTR-3B

Background and Legal Provision

As per the provisions of the Central Goods and Services Tax (CGST) Act, interest becomes applicable when tax liability relating to a previous tax period is discharged in a subsequent tax period. This ensures that any delay in payment of tax is appropriately accounted for under the law.

In line with this requirement, the “Tax Liability Breakup, As Applicable” section in Form GSTR-3B has been introduced to capture such scenarios. This section specifically reflects tax liabilities that pertain to earlier tax periods but are being reported and paid in the current return.

The introduction of this mechanism helps in:

• Identifying delayed reporting of outward supplies
• Ensuring correct computation of applicable interest
• Maintaining transparency in tax reporting across periods

Auto-Population of Tax Liability Breakup

With effect from the February 2026 tax period, the GST portal has enabled system-driven auto-population of the “Tax Liability Breakup, As Applicable” section in Form GSTR-3B. This functionality is designed to reduce manual intervention and improve accuracy in reporting.

The system derives this data based on:

• Document dates of supplies reported in Form GSTR-1
• Amendments, if any, reported in Form GSTR-1A
• Details furnished through the Invoice Furnishing Facility (IFF)

Where the document date of a supply relates to a previous tax period, but such supply is reported in the current period, the system automatically classifies it under the appropriate category. This ensures that taxpayers are clearly able to distinguish between current and past period liabilities.

Mandatory Confirmation Requirement

From the February 2026 return period onwards, a mandatory confirmation step has been introduced for taxpayers while filing Form GSTR-3B. After completing the offset of tax liability using available Input Tax Credit (ITC) and/or cash ledger, taxpayers are required to access the “Tax Liability Breakup, As Applicable” tab on the payment page.

At this stage, taxpayers must:

• Review the auto-populated liability details carefully
• Verify the classification of current and previous period liabilities
• Confirm the details by clicking on the “SAVE” button

Taxpayers also have the option to edit the details, wherever required, before saving. It is important to note that this step is compulsory, and the system will not permit further filing unless the confirmation is completed.

Filing of GSTR-3B Post Confirmation

Once the taxpayer has reviewed and confirmed the Tax Liability Breakup and clicked on “SAVE,” the system enables the next stage of return filing.

After successful confirmation:

• The taxpayer can proceed to file Form GSTR-3B
• Filing can be completed using Electronic Verification Code (EVC) or Digital Signature Certificate (DSC)
• No further system restriction remains once this step is fulfilled

This ensures that liability validation is completed before final submission, thereby improving the overall reliability of the return filing process.

System Limitation and Feedback Received

It has been observed that taxpayers have raised concerns regarding the mandatory nature of this confirmation step. Specifically, feedback has been received that such confirmation should ideally be required only in cases where tax liabilities of previous periods are being reported in the current return.

However, under the current system functionality:

• The confirmation step is mandatory in all cases
• It applies even where the entire liability pertains only to the current tax period
• Taxpayers are required to complete this step regardless of the nature of liability

The issue has been acknowledged by GSTN, and necessary changes or refinements are under consideration. Any updates in this regard are expected to be communicated in due course.

Interim Procedure to be Followed

Until further clarification or system enhancement is implemented, taxpayers are advised to follow the prescribed interim procedure to ensure smooth filing of returns.

Taxpayers should:

• Access the “Tax Liability Breakup, As Applicable” tab on the payment page
• Review the details displayed by the system
• Click on “SAVE” within the tab, even if no changes are required

Only after completing this step will the system allow filing of Form GSTR-3B. Once saved, the return filing process can be completed as per the standard procedure.

Taxpayers are requested to strictly adhere to this requirement during the current phase to avoid any delays or filing issues on the GST portal.

Conclusion

The introduction of the “Tax Liability Breakup, As Applicable” confirmation step in Form GSTR-3B marks a significant move towards system-driven validation and improved compliance under GST. By requiring taxpayers to review and confirm the classification of tax liabilities, the GST portal aims to enhance accuracy in reporting and ensure proper identification of liabilities relating to previous tax periods.

While the current system mandates this confirmation for all taxpayers, including cases where no prior period liability exists, it remains an important procedural requirement that must be completed for successful return filing. Taxpayers are therefore advised to follow the prescribed steps carefully, review the auto-populated details, and complete the confirmation to avoid any disruption in filing.

Adhering to this interim process will help ensure smooth compliance until further updates or refinements are introduced on the GST portal.