How to Reconciliation GST data?
Matching the data filed by the supplier with the recipients and recording all the transactions that have taken place during that period is Reconciliation GST . This Reconciliation process ensures that no sales or purchases are being left or mistakenly shown in the GST returns.
The Process of reconciliation is very simple and the taxpayers must reconcile their data on a regular basis with that of the vendors to claim eligible Input Tax Credit (ITC). However, it can be time-consuming, as the taxpayers are required to continuously keep an eye on any difference or mismatches that may affect the ITC claim.
Now we understand this Process in less than 5 easy steps : –
1. In the reconciliation process of Goods of services tax for the FY 2017-18, the taxpayers required to file all the periodic GST returns First. Instead of the due date for a particular GST return is passed along with the interest or the late fees as applicable. Matching and reconciliation process will not take off. The taxpayers need to update their books of accounts and align the tax returns accordingly.
2. Furthermore, the taxpayers first identify the mismatches and correct the relevant entries in the books of accounts. They should also modify this information in the next GST return filing period. At Present GST Model laws do not accept the revision of GST returns filed in the earlier periods. But, it allows corrected entries through modification return in the next periodic return. These modifications entries must be filed in GSTR 1 & GSTR 3B, accordingly.
Make sure that you have carefully match the purchase register with GSTR 3B (uploaded month wise) and with GSTR 2A details (uploaded by the supplier). It is important to streamline the books of accounts, the GSTR-3B return, and GSTR-2A form to fully avail the ITC on the related purchases; in absence of this, the taxpayer will not able to claim ITC and will end up paying extra taxes.
3. The coordination between the books of accounts and the GST returns is important for claiming ITC. Additionally, taxpayers while claiming ITC on purchases should keep a check on taxes paid under the reverse charge mechanism. However, a taxpayer can only avail credit of taxes paid under RCM only if the goods and/or services are used or will be used for purpose of business.
4. Communication is the most powerful tool, especially amongst the vendors and customers. This results in reporting of the details in the GST returns. It reduces instances of mismatches, omission or incorrect entries the suppliers’ and the recipients synchronize their details and then file GST returns.
It is very important to identify the non-compliant vendors, interact with them, and clear the confusions; this will help the recipients maximize ITC. Now, advanced reconciliation software can help reduce this communication gap between the suppliers and the recipients. These applications help the users to create a reconciliation mismatch report to the parties to resolve any discrepancies arising out of it.
5. At last, the taxpayers should report all the rectified sale or purchase transactions of the FY 2017 -18, for the September returns. and It can be filed by 20 October 2018. It is the last chance when taxpayers can report and correct all discrepancies filed in tax returns of FY 2017-18.
The taxpayers who have not claimed ITC in the earlier months can avail the same in the next months, but not later than the GSTR -9 or filing of GST returns for September month of the subsequent financial year, whichever is earlier.
GST reconciliation is not a single steps event, it must be done on regular basis to claim maximum credit and to avoid discrepancies on a Bigger scale. The taxpayers must communicate the differences with his parties(both recipients/vendors) at the earliest and file error-free returns.
