Performing reconciliation is required before filing returns towards monthly, quarterly, or annual returns. It does not have any influence as to what methods or when the business executed a reconciliation. Thus now there is a right time to know and discuss the reconciliation task as the government makes important amendments to the GST law which will be implied from 1st Jan 2022 along with the initiating recovery proceedings when the sales are provided in GSTR-3B and the discarding of the GST ITC.
GSTR-1 and 3B Connection
Normally the business uploads the sales at the invoice level in the GSTR-1 and provides the summary of the sales in figures ITC claimed and the next tax subjected to pay in GSTR-3B. The same is to be seen that the liability for doing the GST payment urge during furnishing of the GSTR-3B and not with GSTR-1. From the law, all the invoices in the GSTR-1 would be uploaded by the businesses but hide the summarised sales figures in GSTR-3B to diminish or extend the GST payment.
To track all these changes the council is using the short or unpaid taxes with respect to GSTR-3B return excluding any show-cause notice and executing the recovery. Further, the council has circulated section 16(2) (aa) to engage the left tax upon the outward supplies reported in GSTR-1 however not declared in GSTR-3B.
Thus now the assessee would need to execute regular reconciliations between GSTR-1 and GSTR-3B at the invoice level. Through this totals of the related tables in GSTR-1 should be similar to the values of the summary inside GSTR-3B.
The same reconciliations are much more essential as this would assist in preventing the recovery proceedings through the council.
Essentialties of the Provisional GST ITC
These provisional ITC gets dismissed from 20% to 5% the same would assist the business claims the ITC that is not included in GSTR-2A or 2B under goods and services tax. Indeed because of the advantage of the provisional ITC, the businesses may execute the ITC reconciliations on monthly or quarterly grounds.
Subsequently, they would urge the vendors to upload the lost invoices or rectify the unreconciled invoices excluding any payments. In this way, the provisional ITC permitted the defaulting vendors to amend their error excluding any cost.
What Amendment from Jan 2022?
But from Jan 2022 there is a restriction on ITC claims to GSTR-2B alone that is provisional GST ITC is restricted. Thus the assessee must initiate ITC reconciliation either on the weekly grounds or upon the grounds of their payment cycle to avail the qualified ITC.
The GST law is bringing the latest updates in GST return filing in the year 2022 and the Gen GST software stands well in the introduction of the latest reconciliation features within the software. Gen GST software is also able to do a complete reconciliation of returns as per their respective taxes and assesses.
