GSTR-2B Reconciliation Guide: Process, Matching, ITC & Common Mismatches

GSTR-2B reconciliation is one of the essential GST compliances wherein the business reconciles the ITC available in the GSTR-2B with its purchase register and books of accounts.

The process of reconciliation enables the businesses to spot missing invoices, duplicate invoices, mismatched entries, ineligible ITC and other such differences before claiming ITC in the respective GST return.

What is GSTR-2B?

GSTR-2B refers to the Input Tax Credit statement auto-generated for the recipient of goods or services based on the information furnished by the suppliers and other available sources.

GSTN recommends the taxpayers to reconcile the data contained in the GSTR-2B with their purchase records and books of accounts. It further stresses the necessity to avoid claiming ITC twice and doing reversals wherever necessary as per GST law and rules.

What is GSTR-2B Reconciliation?

GSTR-2B reconciliation refers to the comparison of the details available in the GSTR-2B with the purchase register and accounting records of the business.

The process of reconciliation helps the businesses to find out:

• Invoices correctly recorded in GSTR-2B
• Missing purchase invoices in GSTR-2B
• Purchasing invoices existing in GSTR-2B but not in the purchase register
• Matching of invoice details
• Matching of ITC amount
• Eligibility of ITC
• Reversal of ITC where necessary

GSTN’s matching tool classifies the result as Exact Match, Partial Match, Probable Match and Mismatch which also includes documents present in GSTR-2B or in the purchase register.

Why GSTR-2B Reconciliation is Necessary?

The reason why GSTR-2B reconciliation is necessary is that inaccurate reporting of ITC will lead to mismatch in the business books and GST books.

Reasons for which GSTR-2B reconciliation is important for businesses are:

• To identify missing invoices
• To identify duplicate invoices
• To identify GSTIN inaccuracies
• To identify any discrepancies in invoices details
• To verify the taxable value
• To verify the GST amount
• To identify ineligible ITC
• To avoid duplicate ITC claims
• To maintain correct GST record
• To avoid GST notices
• To improve GST compliance

GSTR-2B and Purchase Register

The purchase register consists of purchase transactions entered in the books of accounts while GSTR-2B has ITC related information from GST data.

The business needs to reconcile both the entries before identifying eligible ITC.

Some of the common information to be reconciled includes:

• Supplier GSTIN
• Invoice number
• Invoice date
• Taxable value
• IGST
• CGST
• SGST/UTGST
• Cess
• Document type

Even GST’s e-invoicing facilitates reconciliation as the e-invoice data gets populated on the GST portal and GSTR-2B of the buyer.

Reconciliation of GSTR-2B

Step 1: Download GSTR-2B

Download the respective GSTR-2B as per the tax period from the GST portal.

GSTR-2B document-wise details are available both online and through downloading facility.

Step 2: Prepare Purchase Register

Prepare the purchase register based on the accounting records of the organization.

The purchase register must contain the invoice-wise details required for the purpose of reconciliation.

Step 3: Comparing GSTR-2B with Purchase Register

Compare the data in the GSTR-2B with that in the purchase register on the basis of the following invoice details:

• GSTIN number
• Invoice number
• Invoice date
• Taxable Value
• Tax Amount

Step 4: Identifying Matching Invoices

Invoices with matching invoice details will be classified as matched records.

Step 5: Identifying Mismatched Records

The following types of mismatches should be noted down during the reconciliation:

• Mismatch in invoice number
• Mismatch in invoice date
• Mismatch in GSTIN number
• Mismatch in taxable value
• Mismatch in GST Amount
• Duplicate Invoices
• Missing Invoices

Step 6: Identification of GSTR-2B Entries Which are not Recorded in Purchase Register

There could be certain invoices which would appear in GSTR-2B but would not be recorded in the purchase register.

Such entries must be reconciled with the accounting entries to arrive at a conclusion about the appropriate course of action.

Step 7: Identification of Purchase Invoice not appearing in GSTR-2B

There might be certain purchase invoices recorded in the accounting books which do not appear in GSTR-2B.

The businesses must approach the respective suppliers and ascertain the cause of the absence of the document.

Step 8: Identification of Eligible ITC

Post reconciliation, the taxpayer must identify whether the available ITC is eligible as per GST law.

It has been mentioned explicitly in the GSTN advisory that there could be certain situations other than those of system-generated “ITC not available” situations wherein ITC may not be available, and hence, taxpayers should self-assess the same.

Step 9: Preparation of ITC Working

Once the taxpayer is done with reconciliation and eligibility assessment of ITC, the ITC working is to be prepared.

Step 10: Recording of Reconciliation

Keep files on reconciliation and its documentation for future use and compliance.

GSTR-2B Matching Outcomes Categories

Exact Match

The information in GSTR-2B and the purchase register is an exact match.

Partial Match

Some information matches but some of the parameters do not.

Probable Match

It seems that the entries refer to the same transaction and need further validation.

Mismatch

There are many discrepancies between the two records.

These categories are provided by the GSTN matching tool.

Common GSTR-2B Mismatches

Some of the common mismatches are:

• GSTIN mismatch
• Wrong invoice number
• Wrong invoice date
• Difference in taxable value
• Difference in GST amount
• Entry missing from GSTR-2B
• Entry missing from the purchase register
• Duplicate invoice
• No credit note entry
• No debit note entry
• Classification mistake
• ITC ineligible

GSTR-2B vs Purchase Register

Particulars	GSTR-2B	Purchase Register
Source	GST data	Business accounting records
Purpose	ITC information	Recording purchases
Supplier details	Available	Available
Invoice details	Available as reported	Available as recorded
ITC	Provides ITC-related information	Used to verify purchase records
Reconciliation	Compared with books	Compared with GSTR-2B

GSTR-2B and GSTR-3B

GSTR-2B is a useful source for checking ITC before reporting ITC eligible for GSTR-3B.

However, taxpayers must not take into consideration the GSTR-2B status alone and must consider the provisions of the GST Act and also their own accounting system while claiming ITC.

According to GSTN, taxpayers have to reconcile their records and GSTR-2B, claim double credit and reverse credit as per GST law and rules.

How to Manage Missing Invoices in GSTR-2B?

In case the invoice is present in the purchase register but not showing in GSTR-2B, then the firm must check the GST filing of the supplier and invoice details.

Sometimes, it becomes necessary for the taxpayer to communicate with the supplier in case of a missing document.

There is a facility of Communication Between Taxpayers available on the GST Portal from where a recipient can inform the supplier about missing documents.

Duplication of ITC

ITC cannot be duplicated at any cost.

The GSTN guidance notes that there must be no duplication in claiming the credit of the invoice in any case.

Hence, the duplicate invoice should be identified while doing the reconciliation and should make sure that no ITC is duplicated.

Significance of Reconciliation of GSTR-2B on a Regular Basis

GSTR-2B reconciliation should be done by the businesses regularly instead of waiting until the financial year-end.

This would help businesses:

• Detect any mismatch
• Follow up with suppliers
• Correct their accounting entries
• Prevent duplicate ITC
• Detect ineligible ITC
• Keep ITC records up-to-date
• Avoid compliance problems

GSTR-2B Reconciliation Common Errors

Avoid:

• ICIT without reconciliation
• Duplicate ICIT claim
• Ignoring missing invoices
• Neglecting GSTIN verification
• Neglecting invoice number verification
• Ignoring discrepancies in tax amount
• Ignoring credit notes
• Neglecting debit notes
• Neglecting ITC eligibility
• Failing to reconcile

Documents Required for GSTR-2B Reconciliation

Following documents may be required:

• GSTR-2B
• Purchase ledger
• Purchase invoices
• Debit notes
• Credit notes
• Receipts of goods
• Expense details
• Supplier details
• Accounting books
• Previous year reconciliation work
• GST return forms

Frequently Asked Questions

What is GSTR-2B Reconciliation?

GSTR-2B Reconciliation refers to the verification of the information available in GSTR-2B against purchase ledger and books of accounts in order to find out the match, non-match and the eligible ITC.

Why is there a need for GSTR-2B Reconciliation?

There is a need for GSTR-2B Reconciliation in order to find out the discrepancies, prevent double ITC and eligible ITC before claiming the ITC in GST return.

Why is there an invoice in the purchase register but not in GSTR-2B?

The taxpayer needs to verify the invoice as well as the GST compliance of the supplier.

Can ITC be claimed twice?

No, ITC should not be claimed twice for the same invoice. GSTN especially emphasizes on this point that taxpayers should not take the benefit twice.

Is the GSTR-2B reconciliation process mandatory?

The reconciliation of GSTR-2B is important because businesses must reconcile the information in GSTR-2B with their records to determine the ITC that can be claimed.

Difference between GSTR-2A and GSTR-2B

GSTR-2A is a dynamic document that keeps on changing depending on the upload or filing of supplier documents, while GSTR-2B is a static document that is prepared depending on the cut-off date of the period involved.

Conclusion

GSTR-2B reconciliation process is important for GST compliance and managing Input Tax Credit (ITC). By comparing the GSTR-2B with the purchase register and books of accounts, a business can spot any errors, such as missing invoices, ITC mismatch, duplicate invoice entries, among others.

Regular and proper reconciliation of GSTR-2B will help in maintaining accurate GST records.