GST Reconciliations

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GST Reconciliation is a process for finding the difference between books of accounts and GST Returns, and under this process it is important to check the accuracy to correct inconsistencies during the process of reconciliation. Let's understand in detail about the process.

What is GST Reconciliation?
GST Reconciliation is the process of a taxpayer discovering a difference between his books of accounts and GST Returns. Furthermore, you may correct inconsistencies with the aid of GST Reconciliation by talking with the supplier or making modifications to your own books of accounts.
Additionally, the GST Reconciliation procedure should be performed at regular intervals. This allows you to avoid any penalties or penalties that may arise as a result of mismatches. With the use of the GST reconciliation statement, you might potentially face inspection from the tax authority if the mismatch amount is too big.
What are the types of GST Reconciliation?
The following is a list of the most basic types of GST reconciliation that you must consider while completing your GST Return:
  • GSTR2A Reconciliation and Inward Supplies
  • Reconciliation of GSTR 3B and GSTR 2A
  • Reconciliation of GSTR 3B and GSTR 1
The GST authorities would issue a show-cause notice if there are any discrepancies between these returns.
What are the discrepancies that can come while reconciliation?
Here are some of the most common discrepancies that could come across during GST Reconciliation.
Invoice Details discrepancy
There might be a number of errors in the data you and your provider have provided. Wrong invoice number, invoice date, or invoice value are some of the most typical invoice details mismatches.
GSTIN discrepancy
This is the most common mismatch found during GST reconciliation. The provider may enter the incorrect GSTIN, it could happen due to human mistakes. This may cause problems while claiming ITC.
  • Certain invoices on which the registered person may have claimed ITC are not included by the vendor.
  • Due to the vendor's inaccurate liability declaration, there is a discrepancy between the ITC obtained by the registered person and the amount stated by the vendor.
  • Even though the seller has appropriately reported his obligation, the registered person fails to claim ITC.
What is the importance of GST Reconciliation?
There are a number of reasons why GST Reconciliation of GST Return is crucial for you. Let's take a quick look at them:
  • The most important aspect of GST Reconciliation is to claim 100% correct ITC. By resolving all discrepancies between your purchase register and GSTR 2A, you may claim accurate ITC.
  • GST Reconciliation aids in the avoidance of duplication while completing the Annual GST Return. However, you must reconcile all of your monthly or quarterly GST returns in order to do so.
  • GST reconciliation aids in identifying problems with invoices generated by your supplier so that appropriate changes may be made to provide an error-free GST return.

Required Documents

Acceptable DocumentDocument TypeAdditional Details
Sale Invoicedemo datademo data

packageName 1000

  • package
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You Ask, We Answer

No, only a registered taxable person can issue tax invoice. Also, section 29 specifically prohibits collection of tax by a person who is not a registered taxable person.
If the GST Council recommends that for specified category of goods, or for specific categories of supplies the tax invoice can be issued within a prescribed time, then the Government may issue a notification to implement such recommendation.
Yes. ‘Debit notes’ are akin to ‘supplementary invoices’. They are issued by the supplier for recording increase in taxable value or tax charged in the supply.
Bill of supply should be issued by a supplier in the following cases: ? The supply is that of exempted goods or services; or ? The supplier has opted to pay tax under composition scheme.
• Invoice number and date. • Customer name. • Shipping and billing address. • Customer and taxpayer's GSTIN (if registered) • Place of supply. • HSN code/ SAC code. • Item details i.e. description, quantity (number), unit (meter, kg etc.) • Taxable value and discounts.
As per section 31(1), for issuing a Credit note, an invoice for a supply should have been issued earlier and subsequently the following situations should arise: ? The taxable value on which the tax is collected is more than the actual taxable value. ? The tax charged is more than what you should have charged. ? The recipient has returned the goods. ? The recipient has found that the services supplied by you are deficient.
As per the section 28(1) of the model GST Law, the answer depends upon the type of goods. ? If the goods are such that movement of goods are involved, then taxable invoice has to be issued before or at the time of removal of the goods. ? If supply of goods does not require movement of goods, then taxable invoice has to be issued at the time the goods are delivered to the recipient or when the goods are made available to the recipient.

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