Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →
A small business owner sees a GST payment figure on the GSTR-3B screen each month and does not know how it was worked out or whether it is right.
Payable equals output tax on sales minus eligible input tax credit on purchases. Positive balance is paid in cash; negative balance carries forward in the credit ledger.
Sales register with GST charged, purchase register with eligible GST, GSTR-2B for the month to confirm which credit the portal will allow.
A monthly payable figure the owner can check by hand before GSTR-3B is filed on the 20th.
Your monthly GST bill is a subtraction. Take the GST you charged customers on your sales (output tax), take away the GST you paid on eligible business purchases (input tax credit, or ITC), and the balance is what you pay the government. If your credit is bigger than your tax, you pay nothing in cash and the extra credit carries forward to next month.
Worked example: ₹10 lakh of sales
A Bengaluru wholesaler has this month:
| Item | Amount | GST at 18% |
|---|---|---|
| Sales (taxable value) | ₹10,00,000 | ₹1,80,000 output tax |
| Eligible purchases | ₹6,00,000 | ₹1,08,000 ITC |
| Payable in cash | ₹72,000 |
₹1,80,000 minus ₹1,08,000 is ₹72,000. That ₹72,000 is deposited through a challan (Form GST PMT-06) and set off in GSTR-3B by the 20th of the next month. Since GST rates were restructured from 22 September 2025, most goods and services sit in the 5% or 18% slabs, so check the slab for your items rather than assuming.
What counts as output tax and what counts as eligible ITC?
Output tax is the GST on every taxable supply you made in the month: sales of goods, services billed, and some items that feel like they are not sales, such as advances received for services. It also includes tax you pay under reverse charge, where the buyer pays the GST instead of the supplier.
Eligible ITC is the GST on purchases that meet the conditions in Section 16 of the CGST Act, 2017:
- you hold a valid tax invoice
- you received the goods or services
- the supplier has reported the invoice, so it appears in your GSTR-2B
- the supplier has actually paid that tax to the government
- the item is not blocked under Section 17(5) (for example, most motor cars and food for staff)
The third point is the one that trips people up. Credit you have in your books but which is missing from GSTR-2B usually cannot be claimed that month. If your books show ₹1,08,000 but GSTR-2B shows only ₹90,000, your cash payment rises from ₹72,000 to ₹90,000.
What if my credit is bigger than my tax this month?
Then nothing is payable in cash, and the unused credit sits in your electronic credit ledger until next month. Three cases:
| Case | Output tax | Eligible ITC | Paid in cash | Credit left over |
|---|---|---|---|---|
| Credit below tax | ₹1,80,000 | ₹1,08,000 | ₹72,000 | ₹0 |
| Credit equal to tax | ₹1,80,000 | ₹1,80,000 | ₹0 | ₹0 |
| Credit above tax | ₹1,80,000 | ₹2,10,000 | ₹0 | ₹30,000 |
A cash refund of unused credit is allowed only in specific situations, such as exports or an inverted duty structure where the tax rate on inputs is higher than on output. Otherwise it just waits.
What else can change the figure?
- Interest and late fee: if you file late, interest at 18% a year under Section 50 and a late fee under Section 47 are added, and both must be paid in cash.
- Credit notes: a credit note issued to a customer reduces your output tax in the month you report it.
- Reversals: credit must be reversed if you do not pay the supplier within 180 days, under Rule 37.
How to check the number before you file
- Total GST charged from your sales register.
- Total eligible GST from your purchase register.
- Compare the purchase total with GSTR-2B, available on the 14th.
- Subtract, and compare your figure with what the portal shows in GSTR-3B.
If your hand calculation and the portal disagree by more than a few rupees of rounding, stop and find out why before filing.
What to read next
Next, see where each of these numbers lands on the form: how to read GSTR-3B Table 3.1 and Table 4. For the credit side in more depth, read what ITC is in GST; for the wider month-end routine, see the month-end close reconciliation checklist and the GSTR-1 and GSTR-3B runbook.
GST outward reconciliation (GSTR-1 and GSTR-3B) leads the TransactIG GST roadmap; inward matching (GSTR-2B, ITC, IMS) is on the roadmap. See the GST reconciliation page.