GST reconciliation, ITC review and notice replies
Input tax credit is now allowed largely on the basis of what suppliers report. Reconciliation keeps your purchase register, GSTR-2B, the Invoice Management System and your returns in agreement, month by month, so differences are fixed while they are still small.
Scope
What the work covers
GSTR-2B is the monthly statement of input tax credit available to you, built from your suppliers' GSTR-1 filings. Since the Invoice Management System (IMS) was introduced, recipients can accept, reject or keep pending each supplier invoice before GSTR-2B is finalised. Credit claimed in GSTR-3B beyond what GSTR-2B supports is flagged automatically.
On the output side, liability auto-populated from GSTR-1 is increasingly locked in GSTR-3B, so errors have to be corrected at source through GSTR-1A or later returns. Mismatches between the returns trigger system intimations such as DRC-01B and DRC-01C, and unexplained differences lead to scrutiny in ASMT-10.
- Monthly matching of the purchase register with GSTR-2B and actions in IMS (accept, reject, pending)
- Vendor-wise lists of missing or mismatched invoices, for follow-up before the return
- Reconciliation of GSTR-1, GSTR-3B and books of account for sales and tax liability
- Replies to DRC-01B (liability mismatch) and DRC-01C (ITC mismatch) intimations
- Replies to ASMT-10 scrutiny notices with supporting reconciliations
- Annual return GSTR-9 and reconciliation statement GSTR-9C
- Review of blocked credits, reversals and reclaim of ITC
Approach
How the work is done
Download and normalise
GSTR-2B, IMS and return data are downloaded from the portal and lined up with the purchase and sales registers exported from your accounting software.
Match invoice by invoice
Matching is done on GSTIN, invoice number, date and tax amounts, with tolerance rules for rounding and number formats. Automation handles volume; exceptions are reviewed manually.
Act before filing
Suppliers with missing invoices are contacted, IMS actions are taken, and GSTR-3B is prepared on reconciled figures.
Keep the trail
Monthly reconciliations are stored, so that annual returns and any notice reply rest on records already prepared.
Getting started
Records to keep ready
- GST portal login, or GSTR-1, GSTR-2B, GSTR-3B and IMS downloads
- Purchase and sales registers from Tally, Zoho Books or other software
- Debit and credit notes, and import documents (bill of entry)
- Any notices or intimations received, with the period they relate to
Background
Reconciliation is done with Python-based matching built for Indian GST data, so even large monthly purchase registers are matched invoice by invoice, rather than by totals. See experience and expertise.
Fees
Fees depend on the scope of work, the volume and condition of records and the time required, and are confirmed in writing in an engagement letter before work begins.
Questions about GST reconciliation and notices
What is the difference between GSTR-2A and GSTR-2B?
GSTR-2A is a dynamic statement that changes whenever a supplier files or amends GSTR-1. GSTR-2B is a static monthly statement generated for each return period, and it is the basis on which input tax credit in GSTR-3B is checked.
What is the Invoice Management System (IMS)?
IMS is a facility on the GST portal where recipients can accept, reject or keep pending each invoice uploaded by their suppliers. The actions taken in IMS determine what flows into GSTR-2B, so it should be reviewed before the GSTR-2B for the period is generated.
What is DRC-01C?
DRC-01C is an intimation issued when input tax credit claimed in GSTR-3B exceeds the credit available in GSTR-2B beyond the permitted limit. The taxpayer has to either pay the excess or explain the difference within the time allowed, failing which further filing can be blocked.
How should an ASMT-10 notice be answered?
ASMT-10 lists discrepancies found on scrutiny of returns. The reply in ASMT-11 should address each point with a reconciliation and documents, accept and pay where the discrepancy is genuine, and explain where it is not. A clear, point-by-point reply often closes the matter without further proceedings.
Contact
Phone +91 95384 16161 or email ryan@vazassociates.in. Office opposite Maxus Mall, L.T. Road, Borivali West, Mumbai 400092. Work can also be handled remotely.