What is Reconciliation Under GST?


    Every data point in the records of a business is closely tracked by the GST authorities. Any discrepancy can lead to unnecessary scrutiny, audits, or even suspension of GST registration by the authorities, which can be highly cumbersome for a business. Thus, proper reconciliation of GST is an absolute must.

    Reconciliation in the context of GST means keeping track of each transaction that occurs during a certain period and confirming that the recipient’s reported data matches the data reported by the supplier. As a result, it is possible to ensure that no sales or transactions are overlooked or improperly recorded while filing GST returns.

    Taxpayers must regularly reconcile their data with the suppliers to correctly claim the input tax credit. Although the reconciliation procedure is easy, taxpayers may need time to monitor discrepancies or anomalies constantly.

    Common GST Reconciliation Methods

    Some well-known methods of GST reconciliation are:

    Why is Reconciliation Necessary?

    GST reconciliation is crucial for many reasons, some of which are as follows:

    Consequences of Not Conducting Reconciliation

    The consequences of not performing the reconciliation are sufficient to put the taxpayer at risk. Here are a few of the losses that taxpayers must bear in case of improper reconciliation:

    Common Issues Faced During Reconciliation

    The fact that the relevant parties use different methods for their invoice numbers presents one of the most significant difficulties during GST reconciliation. Due to this, the implementation method may have a harder time obtaining a precise match with the invoice number. These issues might be resolved while also making the process of matching and reconciling data from GST returns easier due to a potent reconciliation tool. The following is a list of some of the main issues with GST return reconciliation:

    Causes of GST Reconciliation Mismatches

    Some of the causes of GST Reconciliation Mismatches are: 

    How to do GST Reconciliation?

    GST Reconciliation must be done on a month-wise basis for the entire Financial Year, and any amendments made to GST returns of the previous Financial Year must be considered while filing the return

    GST reconciliation must be done at the following levels:

    Reconciling the Data for Every GSTIN (vendor-wise)

    This procedure will help you find and claim any Input Tax Credit that has remained unclaimed.

    Declaration of Turnover of Business (at PAN Level)

    Results of the ITC Reconciliation Form

    The following outcomes may occur during the reconciliation procedure or when filing GSTR 2A for purchase:

    ITC Reconciliation Benefits for Taxpayers

    Some benefits that taxpayers avail with ITC Reconciliation are:


    To avoid disruption in business activities from the GST authorities, reconcile GST returns regularly. Reconciliation will assist you in determining and revealing the necessary modifications within the allotted time. You might also avoid receiving any inspection notices from the tax authorities.

    Reconciling manually is a difficult and tedious task. You should utilise fully automated software for your business to perform reconciliation without requiring excessive human resources, time, and effort.

    Busy Accounting Software provides a fully automated and scalable solution for all your business accounting needs, including automatic GSTR 2A/2B reconciliation, auto E-Way Bill Generation, auto E-Invoice Generation and much more.

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