GSTR 3B Reconciliation

Tally Solutions |Updated on: June 14, 2023

1. GSTR 3B reconciliation – A study
2. Why is GSTR 3B reconciliation required?
3. System based GSTR 3B reconciliation
4. Conclusion

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. Based on this, the details are auto-populated inward supplies FORM GSTR – 2A  and GSTR-2B. 

What promotes GSTR 3B reconciliation process:

• Differences between the amount of credit shown in GSTR- 3B and the GSTR 2A/2B
• Difference between GSTR-3B and GSTR-1
• Reconcile the statement to avoid the wrong claim of ITC

Why is GSTR 3B reconciliation required?

• To match with GSTR 2A/2B 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/2B data does not match.
  
  
• To be prepared for Annual Return: GST returnsare filed monthly or quarterly basis. Finally, after the financial year gets over, annual returns must be filed before the 31st December of the 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, the 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, the following actions must be taken at the earlier of the 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.

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:

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 TallyPrime's latest version.