Reconciliation between GSTR-2A and GSTR-3B

Reconciliation between GSTR-2A and GSTR-3B is an important task that businesses should not miss as it ensures that a taxpayer can claim an accurate input tax credit (ITC). Moreover, GSTR-2A and GSTR-3B reconciliation help a taxpayer to reverse the excess ITC claimed by him/her. So in this blog, we will cover all the aspects related to GSTR-2A and GSTR-3B reconciliation. 

What is Form GSTR-2A? 

GSTR-2A is an auto-populated return form that can be viewed or downloaded in Excel or JSON files by the GST Portal recipient. GSTR-2A covers all the details declared by the supplier in his GSTR-1.  

What is Form GSTR-3B? 

GSTR-3B is a type of GST return containing the summary of all outward and inward supplies that need to be furnished by taxpayers on monthly basis. 

GSTR-2A and GSTR-3B Reconciliation Importance 

Keeping the following reasons in mind, every taxpayer must make a routine to reconcile Form GSTR-2A and GSTR-3B: 

1. GST authorities have given notices to countless taxpayers requesting that they reconcile the ITC availed in GSTR-3B with GSTR-2A. In case if they fail to do so, they will need to pay the differential sum to the GST authorities. 
2. Reconciliation between GSTR-2A and GSTR-3B guarantees that ITC is being availed for the tax which has been paid to the supplier. 
3. To ensure that no invoices have been missed/recorded more than once, and so on 
4. To communicate with the supplier in case if he/she has not recorded the outward supplies in Form GSTR-1 so that the disparities are rectified. 
5. Errors if any, can be rectified in GSTR-1 filed by a supplier or GSTR-3B furnished by a recipient. 

GSTR-2A and GSTR-3B Mismatch Reasons 

Here is the reason when GSTR-2A and GSTR-3B may not reconcile: 

1. ITC is claimed on the import of goods 
2. Input Tax Credit (ITC) is claimed on the import of services 
3. ITC is claimed for the GST paid on the reverse charge mechanism. 
4. ITC for goods and services received in the previous financial year (2020-21) but claimed in the current financial year (2021-22). 

Consequences of Mismatch of GSTR-2A and GSTR-3B 

When a recipient takes an excess ITC claim due to any mismatch between GSTR-2A and GSTR-3B, he/she will have to pay the excess amount of ITC claimed with interest. So, to avoid such a situation a taxpayer must reconcile their GSTR-2A and GSTR-3B monthly or else opt for an automated solution like GSTrobo®.