GSTR 3B Reconciliation - System Based GSTR 3B Reconciliation | Tally Solutions

GSTR 3B Reconciliation

  • 1. GSTR 3B reconciliation – A study
  • 2. Establishing GSTR 3B reconciliation and its roots to GSTR 1 and GSTR 2
  • 3. Why is GSTR 3B reconciliation required?
  • 4. System based GSTR 3B reconciliation
  • 5. Conclusion

1. GSTR 3B reconciliation – A study

Under Goods and Services tax Act we know one thing that each registered taxable person furnishes details of outward supplies made in a month in FORM GSTR - 1, details of inward supplies received in a month in FORM GSTR - 2 and a final return in FORM GSTR - 3 by the 10th, 15th and 20th of the next month respectively.

What promotes GSTR 3B reconciliation process:

  • Transitional Credit - GST was introduced from July 2017, which means every registered person who were registered under previous taxation laws would have input tax credits paid on taxable goods to carry forward in new GST returns. It is this transition which promotes for GSTR 3B reconciliation as every return filed by the tax payer is based on self-assessment basis. Meaning every taxation payer has carried forward the transitional credit to new GST return and utilized it for paying tax liabilities
  • Differences between the amount of credit shown in GSTR- 3B and the GSTR 2A
  • Discrepancies between GSTR - 3B and GSTR - 1

2. Establishing GSTR 3B reconciliation and its roots to GSTR 1 and GSTR 2

The Act provides that the return in FORM GSTR - 3B was required to be furnished when the due dates for filing of FORM GSTR-1 and FORM GSTR - 2 have been extended.

After the return in FORM GSTR-3B has been furnished, the process of reconciliation between the information furnished in FORM GSTR3B with that furnished in FORM GSTR - 1 and FORM GSTR - 2 would be carried out.

3. Why is GSTR 3B reconciliation required?

  • To match with GSTR 2A Data: Under Goods and Services Tax Act, the taxpayers will be able to claim ITC only if the invoice is present as a part of their GSTR 2A data or vendor data. Owing to this, taxpayers will now need to do a reconciliation wherever the ITC as per their data furnished for GSTR 3B on the GST portal for the corresponding month and GSTR 2A data does not match.

  • To be prepared for Annual Return: GST returns are filed monthly or quarterly basis. Finally, after the financial year gets over, annual returns must be filed before the 31st December of subsequent financial year. This would need consolidation of the data reported over the financial year
    In order to ensure the correctness of the declaration made and to avoid duplications, taxpayer must reconcile the data, then consolidate the values and make the declaration.

  • Data reconciliation of GSTR 3B and GSTR 1: While the reconciliation between GSTR-2A and GSTR-3B is to ensure that credits claimed by businesses only pertain to taxes actually paid by the suppliers, the reconciliation between GSTR - 1 and GSTR - 3B is to essentially verify payment of taxes for all outward supplies made.

  • To cope with the deadlines: As per CGST Act, following actions must be taken at the earlier of due date of the September ,2018 GST returns or Annual returns:
    • Claim eligible ITC against any invoice raised in FY 2017-18.
    • Any apportionment of ITC belonging to FY 2017-18, as eligible and ineligible not made earlier must be affected before the deadline.
    • Declare Credit Notes issued against any Invoices raised in FY 2017-18.
    • File Amendments to information reported in the GST Returns filed between July 2017 to March 2018.
    • Taxpayers who opted into Composition scheme or the vice versa current year 2018-19, may make amendments to the information reported in the GST returns filed in FY 2017-18 prior to conversion.

4. System based GSTR 3B reconciliation

In the technology enabled GST Regime, the Government is already talking about applying data analytics to compare GSTR - 1 Sales returns and GSTR - 2A Purchase returns with data reported in GSTR - 3B Returns.

The system-based reconciliation can be done in the following manner:

Step 1 Download GSTR - 2A of the corresponding period on the common portal
Step 2 Open Tally.ERP 9. Go to GSTR - 2 Report. Load GSTR- 2A into Tally.ERP 9
  Tally.ERP 9 will show you the details of invoices which are either –
  • Fully Matched
  • Partially Matched: This may be due to partial match between invoices available in the books with invoices available on the GST portal.
  • Available only in Books: This can happen if your supplier has not uploaded some invoices.
  • Available only in Portal: This can happen if you have not recorded the transaction in your books but your supplier has uploaded the same.
Action Stub Take action against invoices which are mismatched, available only in books and available only in portal by checking with the suppliers or correcting/recording respective purchase invoices in the books.
Step 3 Download and compare GSTR - 2A of previous periods with the books for all the GST returns filed for the previous periods to ensure that the Input Tax Credit has been claimed correctly and to identify mismatch if any of GSTR - 2A with GSTR - 3B.

5. Conclusion

Thereby, there is a dire need of a reconciliation or revision of GSTR - 3B mechanism whereby a taxpayer can reconcile and explain the differences in his GSTR - 1 and GSTR - 3B returns and pay the differential tax (if short paid) or claim the same as refund/ carry forward (if excess paid). And all this is possible with Tally.ERP 9 GST return report generation utility.



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