goods and service tax

Reconciliation of Goods & Services Tax (GST) data

What is the Reconciliation of Goods and services tax (GST) data?

  • Reconciliation of Goods and services tax (GST) data is not a new concept which is devised under the Goods & Services Tax (GST) law rather this was done in the earlier tax regimes as well.

  • Reconciliation under Goods and services tax is all about matching the data of the suppliers with that of the recipients and records all the transaction which has occurred during that financial period. 

  • Reconciliation also ensures that all the sales and purchase transactions between the supplier and the recipient are recorded and there is no mismatch in GST return filing.

Why Reconciliation of Goods and services tax (GST) data?

  • Input tax credit: Under the Goods and services tax (GST) regime, taxpayer can claim Input tax credit (ITC) only if the particular invoice receipt is being mentioned in GSTR-2A and this can be done with the proper reconciliation procedure in place.

  • Avoid duplication: To avoid any duplication in your Goods and services tax (GST) data, ensure correctness of the data and consolidate the values & make the declaration requires reconciliation of the Goods and services tax (GST) data.

Read Other Blogs: Impact of GST on Export of Goods and Services

How to go ahead with Goods and services tax (GST) Reconciliation?

  • Periodic GST return filing: Under this new Goods and services tax reconciliation process a taxpayers has to comply with all periodic GST return filing. Even if you have missed the due date of periodic GST return online, it is strongly recommended to file the same along with the interest or the late fees whichever is applicable. It is impossible to take the advantage of GST reconciliation & Input tax credit (ITC) until periodic GST return filing is done.
  • Annual GST Return filing (GSTR-9): Once you have filed all your periodic GST return online, then at the end of the financial year it is compulsory for every taxpayer to file Annual GST return online (GSTR-9). Filing GSTR-9 will make the process of GST reconciliation convenient. It will be easy to compare the periodic GST return online with annual GST return (GSTR-9).

Rectification (in case of any mismatch): In case of any mismatch between the sale & purchase account or periodic GST return online & annual GST return filing, a taxpayer must rectify the same at the earliest since it will create mismatch in the books of accounts. This mismatch will also have a cascading effect in the long run.

GSTR-1 & GSTR-3B: GSTR-1 is a monthly/quarterly return which is to be filed by every taxpayer. It reflects details related to outward supplies i.e. sales.

GSTR-3B is a monthly self-declaration form which is to be submitted by the registered dealer. A taxpayer must file the GSTR-3B for each GSTIN they possess.

Avoid penalties in case of short-payment of tax

Avoid any duplicity of invoices

Allow to claim ITC.

GSTR-1 & E-way bill: It is electronically generated bill for a specific consignment which helps in smooth movement of goods. Many times there are various mismatches which arise on account of E-way bill, some of them are specified below-

Job challan generated but it is not reflected in GST return.

Sale without IGST, E-way bill generated under IGST.

Non-generation of E-way bill below a threshold limit.

Tax invoice cancelled but E-way bill cannot be cancelled.

Prepare a debit/credit note in case of any mismatch in rate.

GSTR-2A & GSTR-3B: GSTR-2A is an automatically generated form from the seller side based on GSTR-1. So at the primary stage it reflects the congruity between your sales and the automatically generated form. When a seller files GSTR-1 it automatically records the data for GSTR-2A of the purchasing party.

Consistency in Books of accounts & GST return online: The congruity between the books of accounts and the GST return is crucial for claiming ITC. However, a taxpayer can only avail credit of taxes paid under reverse charge mechanism only if the goods and/or services are used or will be used for the purpose of business.

Effective communication: Communication is the key, especially amongst the vendors and customers. This will ultimately lead to uniform reporting in the GST return online. Chances of any mismatch/incorrect entries are minimal when there is synchronization between suppliers and recipient’s data. Identify non-compliant vendors, interact with them, and resolve the queries; this will help the recipients maximise ITC.


Conclusion: In case of any mismatch between GST & books of accounts or any delay is filing of GST returns might attract some penalty, which the taxpayer is compulsorily liable to pay. This amount is generally higher than the previous amount since it also includes a part of interest charged thereon. So it is always advisable to consider an advice from a Chartered accountant, Tax consultant and Legal expert.

CAONWEB providing a helping hand to all your business related queries. Whether it is about GST return filing, Income tax return, and company registration, our experts are there to take care of all your business needs.

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