GST Reconcilation

GST Reconciliation is a process through which a taxpayer comes to know about the discrepancy between his books of accounts and GST Returns.

Moreover, with the help of GST Reconciliation, you can rectify the mismatches either by communicating with the supplier or doing changes in your books of accounts.

In addition to this, you should carry out the GST Reconciliation process in a regular interval of time. This helps you to avoid any consequences and penalties that you may face due to mismatches. In case the mismatch amount is too high you can also face the scrutiny from the tax authority.

Why is GST Reconciliation required?

There are several reasons why reconciliation for GST returns data is required by businesses under GST.

 As per the new proposed model of GST returns by GSTN, taxpayers will be able to claim ITC only if the invoice is present as a part of their 2A data or vendor data. Owing to this, taxpayers will now need to do a reconciliation wherever the ITC as per their purchase register and 2A data is not matching.

 GST returns are filed monthly or quarterly basis. Finally, after the financial year gets over, annual returns must be filed before the 31st December of subsequent FY. This would need consolidation of the data reported over the FY. To ensure the correctness of the declaration made and to avoid duplications, the taxpayer must reconcile the data, then consolidate the values and make the declaration.

 Certain deadlines are stipulated in the GST laws for making amendments to GST returns data or to claim ITC.

Mismatches under GST Reconciliation

Here are some of the important mismatches that you may encounter during GST Reconciliation

Mismatches in Invoice Details

There can be several mistakes in the furnished data between you and your supplier. Some of the common invoice details mismatches are wrong invoice number, invoice date or/and invoice value. Mismatch in GSTIN

While doing GST Reconciliation this is the most common discrepancy. Sometimes due to human error, the supplier punches the wrong GSTIN. This may conflict while claiming ITC.

Kinds of GST Reconciliation

Here is the list of most common kind of GST Reconciliation that you must consider at the time of filing your GST Return:

 Inward supplies and GSTR2A Reconciliation

 GSTR 3B and the GSTR 2A Reconciliation

 GSTR 3B and GSTR 1 Reconciliation

Any differences noticed between these returns will lead to a show-cause notice from the GST authorities