Reconciliation of GST

Reconciliation of GST


Reconciliation of GST :

The restoration or reconciliation  under GST would help in keeping  the account books in sync with the filling  done. It will happen between  the purchase ledger you make GSTR-2A,  which shall be auto populated using the sales data uploaded in GSTR-1. Reconciliation of GST will highlight errors in different cases,  among them can be while the supplier misses an invoice or he/ had added an invoice that was missing in the purchase ledger or there was an amount between the invoice uploaded and entry was made. There can be supplier errors,  purchase errors,  time of Supply cases as well as pending cases,  where reconciliation under GST regime will differentiate errors and configure taxation.  Sometimes,  the supplier  might miss out on invoices and error can be made.  So this needs to be looked into as to resolve to get the input tax credit (ITC). Cross check is mandatory to detect errors and helps in smooth functioning of GST. There are so many questions to be attended under GST regime, and being double check for corrections,  reconciliation will open up transparency and also help in keeping accounts handy. It is recommended that you always set the from date on your GST  reconciliation report as the start of the first  period  containing GST.  This means the suppliers and purchase ledger will open balances will be 0.

Review of transactions in the GST account  transaction section becomes necessary to check with your accountant  or bookkeeper that you have coded them correctly. As the GST conversion balance, adjustment and also if any imports,  should be maintained in time without delay. Therefore reconciliation of manuals adjustable on technical points before any warnings recommended.  Also,  the accounting  authorities with the help of technology and IT departments, are expected  to carry out the reconciliation at their level based on communication by GSTN of  challan data for successful transaction received on technical terms like T+1 and so. This will be an additional  validation  in the reconciliation process.  This process will be functioning on the Base of CIN,  which will be the unique identifier across  all the databases. IT system will be the backbone for also the reconciliation process to be applied to all. When the banks report  each successful transaction on real time basis,  the IT system will validate the proceedings without any problems or faults.  Reconciliation of input tax credit / Cenvat receivable between returns and booking of accounts  needs to be verified too in details. After the implementation of GST in India,  companies,  firms, would get input tax credit only once their suppliers has actually paid the tax to government.  Which makes reconciliation of invoices very important to be  ignored. Under GST returns, as companies have to mandatorily upload  all the outward supplies or sales and inward supplies or purchases every month in a prescribed digital format.  

Therefore,  any mismatch in transactions would result in default in input tax credit  and which will be  detected by the system  immediately.  For example,  purchase recorded in accounts but missing in GSTR-2A, the system will  flag the invoices  as rejected or add the invoice in GSTR-2A and will take provisional credit. Again,  in case of purchase errors,  same will be done by either adding the  invoice  in accounts  and also will modify or delete as the action required in that case. This reconciliation process under GST regime will be an operation for detecting and removing the un-required errors in the system of proceedings.



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