7-GST-Reconciliation-Reports

GST Reconciliation Reports to make your Business 100% GST Compliant

CA Hema Pandey

Updated on February 9th, 2024

What is Reconciliation?

gst reconciliation
  • Reconciliation is to make a comparison as to any difference between two data sets. The main purpose to reconcile is to find out any error or omission that has been taken place while making any data entry.
  • Reconciliation is important at every stage because mistake once committed, if not rectified at the earliest, may lead to a series of mistake.
  • Under GST, reconciliation is very much required as it is based on matching concept. Data entered at one place automatically gets uploaded at various places.
  • Therefore, under GST, to check whether data entered is appropriate or not, proper periodic reconciliation is required to be done.
  • Details of GST is checked for all the other compliances such as statutory audit, Income tax filings and audit and so on.
  • Taxpayer is expected to upload true and correct details of GST under various return.
  • Also, rectifying error under GST is not very easy. Erroneous return under GST may lead to excessive tax payment of which refund is also a tiresome and time-consuming process.
  • Reconciliation is given an important place under account, may it be costing, Bank reconciliation statement or vouching and verification under audit.
  • Checking all the data and correcting it within time is an important area in any organisation.
  • Similarly, under GST also various reconciliation reports are important for the management.

There are various reconciliation required under GST, some of them are as follows: -

2A/2B v/s Purchases

Meaning of 1st Aspect

Supplier files his GSTR-1 and it gets reflected under GSTR-2A and 2B of recipient.

Meaning of 2nd Aspect

These are the details of purchases with the taxpayer.

Importance

  • It is important that the details of purchase with the taxpayer matches with his GSTR-2A/2B details.
  • Details uploaded by registered suppliers are reflected in GSTR-2A and 2B.
  • However, purchases made from unregistered or composition dealer will not reflect here.
  • While checking GSTR-2A, a taxpayer needs to keep purchase register as a base.
  • For example, if while checking GSTR-2A, a taxpayer comes to know that a supplier has not uploaded a particular transaction in his GSTR-1 resulting to which purchase register and GSTR-2A does not match, so he can update from such supplier.

Get Free Bonus Report: Claim 100% ITC for your business

GSTR-1 v/s 3B

Meaning of 1st Aspect

Supplier files his details of outward supplies in this statement.

Meaning of 2nd Aspect

These are the periodic return filed by the taxpayer that covers all the details for that particular period such as outward supply, inward supply, tax amount, interest or penalty if any, etc.

Importance

  • Details of outward supply is very important to determine the amount of tax payable.
  • Amount entered in GSTR-1 as well as GSTR-3B must match with each other.
  • It is very important to find out as to whether all the details entered is correct at both the places.
  • This is because if they don’t match, there will be some error and which will ultimately lead to some unwanted penalty.

GSTR-2A/2B v/s 3B

Meaning of 1st Aspect

Supplier files his GSTR-1 and it gets reflected under GSTR-2A and 2B of recipient.

Meaning of 2nd Aspect

These are the periodic return filed by the taxpayer that covers all the details for that particular period such as outward supply, inward supply, tax amount, interest or penalty if any, etc.

Importance

  • Removal of cascading effect is an important aspect of GST.
  • A registered taxpayer will be eligible to claim the credit of GST paid on inward supplies.
  • GSTR 2A contains the detail of inward supplies made.
  • GSTR-2A will show the details uploaded by supplier, but under GSTR 3B taxpayer will himself upload the details as to claim ITC for the particular tax period.
  • Only 105% of details available as ITC under GSTR 2A is eligible for ITC.
  • Thus it becomes prominent for the taxpayer to verify that all his suppliers have properly uploaded the details and if not, request his supplier to upload proper details.
  • This is because, the taxpayer will not be able to claim ITC under GST on details that are not reflecting under GSTR 2A over and above 105%.

GSTR 1 vs books of accounts

Meaning of 1st Aspect

Supplier files his details of outward supplies in this statement.

Meaning of 2nd Aspect

Books of accounts is the place where the primary transactions taken place in an organisation is recorded.

Importance

  • GSTR-1 is uploaded based on the data entered in books of accounts.
  • Thus, accuracy of books of accounts is of great importance in accuracy of GSTR-1.
  • Also, even if the records entered in the books of accounts is correct, such records are also required to be correctly entered under GSTR-1.
  • Therefore, reconciliation of GSTR-1 and books of accounts before uploading GSTR-1 is very important.

GSTR 2A vs Books of accounts

Meaning of 1st Aspect

Supplier files his GSTR-1 and it gets reflected under GSTR-2A and 2B of recipient.

Meaning of 2nd Aspect

Books of accounts is the place where the primary transactions taken place in an organisation is recorded.

Importance

  • Although GSTR-2A is not uploaded by the taxpayer, but it is very important that it covers all the transaction of inward supply.
  • Matching of GSTR-2A with books of accounts is of great importance because it will ensure that all the suppliers have uploaded proper details and the taxpayer is claiming correct ITC.

Get Free Bonus Report: Claim 100% ITC for your business

E-Invoice vs GSTR-1

Meaning of 1st Aspect

E-invoice is uploaded by the eligible taxpayer for every B2B transaction.

Meaning of 2nd Aspect

Supplier files his details of outward supplies in this statement.

Importance

GSTR 1 v/s e-way bill

Meaning of 1st Aspect

Supplier files his details of outward supplies in this statement.

Meaning of 2nd Aspect

Wherever movement of goods is involved, E-way bill is required to be filed.

Importance

  • A taxpayer needs to generate E-way bill on every movement of goods whether inter-state or intra-state.
  • Therefore, a taxpayer needs to check whether the details of E-way bill and GSTR-1 matches.
  • If it does not match, the taxpayer will have to check where the error has taken place.

So, it can be concluded that reconciliation plays a vital role under GST just like any other reconciliation.

All the above-mentioned reports are needed for under GST as GST is a very complex tax regime and requires detailed work as well as detailed checking.

Indirect tax is an integral part in any business enterprise. It is entangled in every transaction.

So, checking every detail is prerequisite before uploading any return or finalising any data.

I hope that this article was suitable for your query.

Thank you

reconciliation

Claim upto 100% Input Tax Credit

Easiest GSTR 2B Reconciliation With Reverse ERP Integration

  • Identify defaulting suppliers 
  • 100+ validation checks for each invoice
  • Accurate GSTR 2A reconciled with purchase
  • Get every month’s GSTR-2A within seconds
Get A Callback
CA Hema Pandey

About the author

Hema is a Chartered Accountant who is having about Eight years of experience in taxation and accounting. She is in practicing as a Chartered Accountant since 2020. She is a writer by passion and thus shares her experience and knowledge through her articles at various platform.

Predominantly her area of interest is GST. Since GST is a very new concept for India, every practitioner is looking for clarity in this area. She likes to share her experience with everyone and therefore tries to put them in form of articles.
Apart from this, she is also well-worsed in Financial market.

Follow us:

Share0
Tweet0
Share0