GST Reconciliation

Description

With the increase in the use of e-filing, it is easy to cross verify the data. Like VAT, under GST also, you can avail credit in respect of tax paid while purchasing goods. You need to pay only tax on the value addition.

This leads to a reconciliation that taxes that you claim to be paid on purchases and want to avail credit in respect of same should be shown in your account by the supplier.

It seems simple to have reconciliation with your vendors; however, it needs a continuous check. The issue can arise due to non-filing of return by the supplier or non-deposit of tax by the supplier to the government; To claim the input tax credit (ITC), the taxpayers have to reconcile their data with that of the vendors regularly. Although the reconciliation process is simple, the necessity for the taxpayers to continuously keep track of any discrepancy or mismatches could be time-consuming.

Major issues due to which reconciliation is required:

• Mismatch in invoice number of the purchase invoices as mentioned by seller and purchaser.
• Purchaser is doing business in multiple sate and seller raised the invoice using different GSTIN.
• Both the purchaser and supplier have recorded invoices in different return periods.
• Date of recording invoice.
• Rounding of amount.

Regular reconciliation is required to save time, cost, timely availing of ITC and saving in penalties. Above all, it gives peace of mind.