What is GST ITC Reconciliation?

GST ITC Reconciliation is the process of matching the Input Tax Credit claimed by a taxpayer with the credits available as per the GST portal, to ensure accuracy and compliance.

Why is ITC Reconciliation important under GST?

It helps in identifying discrepancies between the ITC claimed and the ITC available, ensuring that taxpayers claim the correct amount of credit and comply with GST regulations.

What data needs to be reconciled for GST?

Taxpayers need to reconcile their purchase register with GSTR-2A/2B, sales register with GSTR-1, and GSTR-3B with GSTR-1 and GSTR-2A/2B for accurate ITC claims and liability reporting.

How often should GST ITC Reconciliation be done?

It should be done monthly before filing GSTR-3B to ensure that the ITC claimed is accurate and compliant with GST norms.

Can I claim ITC if my supplier has not filed GSTR-1?

ITC can only be claimed if the supplier has filed GSTR-1 and the invoice details are reflected in your GSTR-2A/2B.

What happens if there are discrepancies in ITC Reconciliation?

Discrepancies must be rectified by either the taxpayer or the supplier to ensure accurate ITC claims. Unresolved discrepancies can lead to denial of ITC.

Are there any deadlines for ITC Reconciliation?

While reconciliation should be done monthly, the final reconciliation for a financial year should be completed before filing the September returns of the next financial year or the annual return, whichever is earlier.

What documents are required for GST ITC Reconciliation?

Taxpayers need invoices, debit/credit notes, and their purchase and sales registers along with GSTR-2A/2B and GSTR-1 for reconciliation.

Can ITC be claimed on provisional basis?

Yes, ITC can be claimed on a provisional basis, but it needs to be reconciled and any discrepancies resolved to avoid reversal or penalties.

What is GSTR-2A and GSTR-2B?

GSTR-2A is a dynamic, auto-populated statement showing details of purchases and ITC, while GSTR-2B is a static statement providing eligible and ineligible ITC for a specific tax period.

How do I rectify errors found during ITC Reconciliation?

Errors can be rectified by communicating with the supplier to file amendments in their subsequent GSTR-1 or by adjusting in your own returns if applicable.

What if my supplier files GSTR-1 late?

Late filing by the supplier will delay the reflection of ITC in GSTR-2A/2B, potentially affecting your ITC claim timing.

Can I claim ITC without invoice?

No, having a valid tax invoice or debit note is mandatory for claiming ITC under GST.

What is the role of GSTR-3B in ITC Reconciliation?

GSTR-3B is the monthly return where taxpayers pay their tax liability and claim ITC based on reconciled data from GSTR-1 and GSTR-2A/2B.

What are ineligible ITC under GST?

ITC is not available on goods or services used for personal use, exempt supplies, or other specific categories defined under GST law.

How can I rectify unclaimed ITC of a previous period?

Unclaimed ITC can be claimed in subsequent tax periods, but it must be within the deadline of the September returns of the next financial year or the filing of the annual return.

What is the impact of not doing ITC Reconciliation?

Not reconciling can lead to incorrect ITC claims, resulting in tax notices, penalties, and interest on the excess claim or late reclamation of ITC.

Can ITC be claimed on capital goods?

Yes, ITC can be claimed on capital goods used for business purposes, subject to conditions and restrictions under GST law.

How does e-way billing affect ITC Reconciliation?

E-way bill data should be reconciled with GST returns to ensure that the goods transported align with the invoices reported, affecting ITC claims.

What software can assist in GST ITC Reconciliation?

Many GST-compliant accounting software and specialized GST tools are available that automate and assist in the reconciliation process, making it efficient and accurate.

Input Tax Credit In Guwahati

The input tax credit is the tax paid by the person on the purchase and it is used to reduce the tax liability when the sales are made. The input tax credit in Guwahati is levied based on the value-added at each stage of the supply chain until it is reaching the consumer. Input tax credit in Guwahati includes the central tax, state tax, integrated or the cess paid by the person who has a valid registration.

Tax paid on the reverse charge basis and the IGST charged on the import of goods is also included in the Input tax credit. Only the tax paid under the composition scheme is not included in the input tax credit.

Using the Input tax credit mechanism in Guwahati can help the business achieve neutrality in the incidence of tax. By ensuring that the input tax element is not entering the production cost or the cost of supply of Goods and services.

Who can claim an input tax credit in Guwahati

Input Tax Credit in Guwahati is claimed only by people having GST Registration and proper
documentation and individuals filing of GSTR 2 returns.

The individual must have a tax invoice or the debit note that is issued by the supplier of the input or the input services.
The individual has to receive goods, services, or both.
The input supplier has to pay the government the GST that is charged concerning supply.
The returns should be filed as per Section 39.
If the goods are received in lots or installments the Input Tax Credit can be claimed when the last lot is received.

Input tax credit refund

The taxpayers can claim the GST refund for an Input tax credit in Guwahati. To claim the Input tax credit refund GST RFD-01 a Form is to be filed by the taxpayer at the GST portal to claim the refunds for the accumulated input tax credit due to the inverted tax structure. This is done when the tax that is levied on the inputs is higher than the tax that is levied on the output supplies.

Eligibility for the input tax credit refund in Guwahati

A person with an aggregate turnover of up to Rs.5 crore in the previous financial year or the current financial year and has opted to file Form GSTR 1 quarterly can apply for an Input tax credit in Guwahati