Expert Speak Details


Deni Shah, Director
Ankita Gala, Manager
Shubham Khanna, Assistant Manager, Deloitte India

Reconciliation of GST Data

Reconciliation under Goods & Services Tax (GST) is about matching the data filed by the supplier with those of the recipients and recording all the transactions that have taken place during that period. The reconciliation process ensures that no sales or purchases are omitted or wrongly reported in the GST returns.

The taxpayers must reconcile their data on a regular basis with that of the vendors to claim eligible Input Tax Credit (ITC). The process of reconciliation is simple, but can be time-consuming, as the taxpayers are required to continuously keep an eye on any discrepancy or mismatches that may affect the ITC claim.

Following are some steps which can ease the tedious process of reconciliation.

As long as the GST returns are not filed, matching and reconciliation process will not take off. Thus, the taxpayers are required to mandatorily file all the periodic GST returns, even if the due date for a particular GST return is missed, it should be filed along with the interest or the late fees as applicable. Unless and until all the GST returns are filed, the taxpayers won't be able to claim adequate ITC.

The taxpayers need to update their books of accounts and align the tax returns accordingly. Furthermore, the taxpayers should identify the mismatches and correct the relevant entries in the books of accounts. GST laws does not allow for revision of tax returns filed in the previous periods and thus taxpayers should also amend these details in the coming GST return filing period. It is important to streamline the books of accounts, the GSTR-3B return, and GSTR-2A form to fully avail the ITC on the relevant purchases; otherwise, the taxpayer will lose ITC claim and will end up paying extra taxes.

The congruity between the books of accounts and the GST returns is crucial for claiming ITC. Additionally, taxpayers while claiming ITC on purchases should keep a check on taxes paid under the reverse charge mechanism.

It is also very important to identify the non-compliant vendors, interact with them, and resolve the queries; this will help the recipients maximise ITC. Communication is the key, especially amongst the vendors and customers. This coordination results in uniform reporting of the details in the GST returns. Chances of mismatches, omission or incorrect entries are reduced when the suppliers' and the recipients' synchronize their details and then file GST returns.

Any taxpayer who has not claimed ITC in the preceding months can avail the same in the subsequent months, but not later than the filing of annual return i.e GSTR -9 or filing of GST returns for September month of the subsequent financial year, whichever is earlier. Any amendments or changes to the previously filed returns can be done within the same timeline.

GST reconciliation is a recurring event, it must be performed periodically to claim maximum credit and to avoid mismatches on a larger scale.



Disclaimer: Above expressed are the personal views of the author, and the publisher or the author disclaim all, and any liability and responsibility, to any person on any action taken on reliance of it.