Question

why reconciliation for GST returns data is required by businesses under GST.

Answer 1

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Reconciliation under Goods & Services Tax (GST) is about matching the data filed by the supplier with those of the recipients and recording all the transactions that have taken place during that period.

The reconciliation process ensures that no sales or purchases are omitted or wrongly reported in the GST returns.

Answer 2

Answer:

♣ There are several reasons why reconciliation for GST returns data is required by businesses under GST.

✒️  As per the new proposed model of GST returns by GSTN, taxpayers will be able to claim ITC only if the invoice is present as a part of their 2A data or vendor data. Owing to this, taxpayers will now need to do a reconciliation wherever the ITC as per their purchase register and 2A data is not matching.

✒️  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 FY. This would need consolidation of the data reported over the FY. 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.

✒️  Certain deadlines are stipulated in the GST laws for making amendments to GST returns data or to claim ITC. As per CGST Act, following actions must be taken, at the earlier of filing the return under section 39 for the month of September* following the end of the financial year to which a particular invoice pertains, or the furnishing of the relevant annual return:

♦ Claim eligible ITC against any invoice raised in a FY.

♦ Any apportionment of ITC belonging to a FY, as eligible and ineligible not made earlier must be affected before the deadline.

♦ Declare CDNs issued against any Invoices raised in a FY.

♦ File Amendments to information reported in the GST Returns filed in a FY