GST Reconciliation
CA Poonam Gandhi
March 10, 2022

Updated on February 14th, 2023

Reconciliation of different records, returns or accounts plays an important role in the life of the registered person under Goods and Services Tax (GST). The registered person is left with no option other than understanding and giving appropriate attention to the GST reconciliation.

Due to severe repercussions, it is important that the registered person learns and adopts the game of GST reconciliation.

Broadly speaking, GST reconciliations involves matching of sales data; purchase data and input tax credit data with different GST returns; sales register and purchase register.

In the present article, we will learn about the reconciliation of GSTR 1 vs sales register furnished and prepared by the registered person. However, before going into the essentials of GSTR1 reconciliation and sales register, firstly, let us individually understand both GSTR 1 and sales register in terms of GST.

What is outward supplies

GSTR1 is a return via which the details of outward supplies (i.e., sales) of goods or services is furnished by the registered person. GSTR1 is to be filed on monthly basis, or on a quarterly basis for the specified eligible registered person.

Every registered person is liable to furnish the outward supplies details through GSTR1. Only the following categories of registered persons are exempted from filing of GSTR 1 return filing
  • GST Composition Scheme dealers;
  • Input Service Distributors (ISD);
  • Non-resident taxable person;
  • Registered person liable to collect TCS on GST;
  • Registered person liable to deduct TDS on GST;
  • Supplier of online information, database access/ retrieval services.

Importantly, GSTR 1 summarizes details of the following different types of supplies-

  • Taxable outward supplies to the registered person (excluding zero-rated supplies as well as deemed exports);
  • Taxable outward supplies to the unregistered person;
  • Zero-rated and deemed exports; and
  • Outward supplies relating to NIL rates, exempted as well as non-GST.

Sales Register Terms under GST

The sales register is not specifically defined under GST law. But, section 35 of the Central Goods and Services Tax Act, 2017 provides a briefing of accounts and other records to be maintained by the registered person under GST.

One such account/ record, to be maintained by the registered person, as per section 35, is the outward supply of goods or services or both. The same is popularly known as ‘Sales Register’. Simply putting up, the register reflecting sales done within a given tax period is known as the sales register.

Summing up, it is important for the registered person to maintain and keep the sales register as per the provisions of section 35. Though not prescribed under the GST law, sample of sales register format sales register format is highlighted hereunder-

Sales Register Sample Format

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GST Reconciliation and its Position in pre-GST regime and post-GST regime

Reconciliation Definition

After individually understanding both GSTR 1 and sales register, let us come to the core of the article i.e. GST reconciliation. The general meaning of reconcile is comparing two sets of data. The basic purpose of reconciliation is to figure out differences, if any, between both the relevant sets of data and rectify the same.

Interestingly, the game of GST reconciliations was even present in the pre- GST regime. However, the same was comparatively much easier and even had fewer implications.

In the pre-GST regime only if the departmental officer finds out some discrepancies while processing the regular returns or annual return, the same will be intimate to the taxpayer. Further, on that basis audits and scrutiny would be carried out by the departmental authorities.

However, after the GST introduction i.e., post-GST regime, reconciliation of data has gained greater significance. Availability of GST Input Tax Credit strictly relies on the reconciliation between filed returns versus auto populated returns.

As we know, in order to make the indirect taxation easy, various taxes were subsumed into one single taxation known as ‘Goods and Services Tax’ i.e., GST. However, factually, the registered person under GST ends up reconciling various accounts, records and returns.

GST Reconciliation Various Types

Reconciliation under GST is important to figure out various discrepancies and also to assure the correctness of the data/ details. Some of the uses of GST reconciliations, are highlighted hereunder-

Reconciliation in GST

Now, let us list down the probable GST reconciliations to be done by the registered person under GST-

Sets of Data to be Reconciled

Purpose for Reconciliation

GST Reconciliation of GSTR 1 return vs Sales Register

To verify the correctness of the sales details i.e. outward supplies of the given period

GSTR 3B Reconciliation against Sales Register

To verify the correctness of the sales as well as corresponding tax details of the given period

GST Reconciliation of GSTR 3B return vs Purchase Register

To verify the correctness of the purchase details i.e., inward supplies and Input Tax Credit availed on the same of the given period

GSTR 2A Reconciliation or GSTR 2B return vs Purchase Register

To verify the correctness of the purchase details as entered by the supplier

GST Reconciliation of GSTR 3B return vs GSTR 2A or GSTR 2B Reconciliation

To verify the correctness of the Input Tax Credit of the given period

GST Reconciliation of GSTR 1 return vs GSTR 3B return

To verify the correctness of the sales details i.e. outward supplies of the given period

In the present article, we are briefly going to understand the reconciliation in GST of GSTR1 vs sales register.

GST Reconciliation : GSTR1 vs Sales Register

As seen above, both GSTR 1 return filing and the sales register covers details of outward supplies undertaken by the registered person during the prescribed period.

Reconciliation between both enables the registered person to validate the correctness of sales figures for the given period. Reconciliation between GSTR 1 vs sales register also enables the registered person to finalize the sales figures at the end of the Financial Year.

GSTR 1 Reconciliation and sales register can be carried out via both the methods, i.e.,-

  1. Manual method;
  2. Mechanical method.

Under any of the above methods, it is important to note that the reconciliation should be done for every GSTIN and thereafter must be considered at a PAN level. Reconciliation should be done for every month for the entire Financial Year.

The Manual method of reconciliation is practically possible only and only when the number of transactions is limited. The probable procedure for reconciling GSTR 1 and sales register through manual method is as follows;

How to reconcile GSTR 1 ?

  • Download the already filed GSTR 1 return from GST portal for the period which needs to be reconciled;
  • Keep the sale register for the respective period also ready;
  • Start comparing details furnished via GSTR 1 return as against sales register;
  • Tally both the figures on monthly basis and strike out the months which gets completely tallied;
  • Figure out the differences of the untallied months and check the possible way to amend the error committed, if any.

The above time consuming and laborious reconciliation in GST process through manual method can be pretty simplified by installing and using appropriate GST reconciliation software.

Save up to 10x more time & efforts with this Advanced GST Reconciliation Software/Tool.

What if any sales invoice gets missed in GSTR 1?

Reconciliation of GSTR 1 return and sales register can be helpful to the registered person mainly to figure out the following discrepancies -

  1. Any details left to be reflected in GSTR 1 return will not get correspondingly reflected in auto populated GSTR 2A and 2B and accordingly, the purchaser will not be able to avail timely Input Tax Credit of the same.
    Reconciliation will enable proper reflections of entries and corresponding availability of Input Tax Credit to the purchaser.
  2. In case of discrepancies in GSTR 1 and sales register, there are at most chances of the mistake to be carried forward while filing GSTR 3B and the same may even result into payment of self-assessed tax.
    Reconciliation will enable proper filing of GSTR 3B and avoidance of difference between GSTR 1 return and GSTR 3B filing.
  3. Simple Clerical error; technical error etc. if any in GSTR 1 or in sales register can be easy rectified.

To learn more on mistakes in GSTR 3B, click on the link provided.

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FAQ's on GST Reconciliation 

What is GSTR 1?

GSTR 1 is a return to be filed under GST by every registered person, other than a few exceptions, detailing outward supplies of goods or services of the prescribed period.

What is a sales register?

A register reflecting details of the sales undertaken by the person for a given period is known as a sales register.

What is reconciliation?

Reconciliation means comparing two sets of data for figuring out any discrepancies in the same.

What is important of reconciliation between GSTR 1 and sales register?

Reconciliation between GSTR 1 and sales register is important under GST so that one of the most important ingredients i.e. outward supplies can be correctly verified.

CA Poonam Gandhi

About the author

Poonam Gandhi is a Chartered Accountant and a Lawyer. She is a Professional Freelance Content Writer/ Editor and an Educator.

She masters in creating result-oriented as well as Search Engine Oriented Content. Currently, she is associated with some of the topmost leading sites of India.

She holds more than 3 years of experience in the content field. Before entering the content writing field, she possessed a wide practice experience of more than 9 years, specifically, in the field of Indirect Taxation.

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