GSTR-2A reconciliation

GSTR-2A reconciliation

What exactly is GSTR-2A reconciliation?



The process of matching the invoices available in the GSTR-2A with the invoices recorded by a business in its books is known as GSTR-2A reconciliation. The GSTR-2A reconciliation process assists businesses in matching invoices and identifying any discrepancies. ITC reconciliation is performed at various intervals, primarily monthly or fortnightly.

What is the significance of GSTR-2A reconciliation?


The GSTR-2A reconciliation essentially ensures that the forms GSTR-3B and GSTR-2A agree with each other.



reconciliation is critical for the following reasons:


     It enables you to ensure that no ITC is lost on invoices where the vendor has declared their GST liability but the buyer has not claimed the credit in their returns.

     Frequent GSTR-2A reconciliation enables you to identify missing invoices in GSTR-2A and take the necessary steps to have them uploaded from the supplier.

     In some cases, invoices are uploaded, but the values are incorrect. Reconciliation enables you to take action to correct those issues.

     To avoid claiming ITC on the same invoice more than once.

Why do I need GST GSTR-2A Reconciliation?



This is an important question and you should understand why GSTR-2A is one of the most important GST reconciliations.

As a result, Input Tax Credit is one of the main pillars of GST, as it aids in eliminating the tax cascading effect that existed in the previous tax regime of VAT and Service Taxes.

ITC is intended to ensure that taxpayers do not pay multiple taxes for the same purpose, which is the whole point of GST, to eliminate the tax on tax effect, and thus it is critical to comply with this GST provision.

This was from a compliance standpoint; if we look at ITC from a business standpoint, Input Tax Credit under GST becomes an even more important aspect of GST.

If a business continues to pay unnecessary and multiple taxes, their monetary balance will suffer, resulting in losses and the waste of working capital and revenue in GST.

According to the ITC rules under the CGST Act 2017, if a taxpayer has already paid a tax as an input in the production of goods, he should not have to pay the same tax again when selling the finished goods.

Businesses can save a significant amount of working capital by ensuring the smooth flow of tax credits, which is the main goal of the Input Tax Credit under GST. As a result, it is critical that businesses take advantage of this ITC provision by correctly reconciling their GSTR-2A data with their purchase records.


Another important reason to reconcile GSTR-2A is to avoid ITC claim duplication, which occurs when taxpayers claim the same ITc more than once or claim an ineligible ITC.

These errors may result in the reversal of ITC and interest later on; in severe cases, there may even be notices and legal disputes.

GSTR-2A reconciliation is also important for Forms GSTR-9 & GSTR-9C annual return filing.

Annual Return filings are the consolidation of all transactions carried out throughout the year and must be extremely accurate to avoid penalties and notices, among other things.

The ITC claimed by a taxpayer throughout the year is accounted for in GSTR-9 & GSTR-9C, so it is critical to ensure that the ITC management is clear and precise.

So there is more than one reason to devote time to reconciliation and ensure accuracy in order to claim 100% of your eligible ITC and avoid non-compliance.


However, reconciling can be time-consuming because it is a lengthy process that necessitates a lot of concentration and constant manual labour.

Particularly in the case of large amounts of data and transactions, reconciliation can take days and may not be as accurate due to common manual errors.

Why was the GSTR 2A reconciliation process required?



Many business owners did not consider this process necessary until 2019. This was due to the fact that the GSTR 2A entries had no effect on the taxpayers tax liability or assets. As a result, taxpayers can afford to ignore the same. However, there has been a noticeable shift in people’s attitudes. GSTR 2A reconciliation has become relevant as a result of Rule 36 amendments. It is now critical for businesses to complete the reconciliation process.


Another reason for its importance is that the GST department has issued notices to various taxpayers. The department frequently inquired about the reconciliation of GSTR 2A. According to the department, certain businesses received undisclosed goods or services from various vendors.


Many people were unaware that they were required to file multiple returns, which resulted in many returns being filed incorrectly. GSTR 2A was impacted by this. As a result, when taxpayers began receiving notices from the department, they began submitting a proper GSTR 2A reconciliation.


There is one more reason why this procedure is significant. Refund claimants also consider the reconciliation process because, under GST legislation, businesses engaged in export and other supplies are eligible for tax refunds. In some cases, taxpayers must demonstrate to the relevant department that they have made tax payments on inbound supplies. This can be accomplished by making the appropriate entries in GSTR 2A.


As a result, export businesses must ensure that their purchases are accurately reflected on the GSTR 2A. The reconciliation process enables the company to follow up with suppliers and ensure that the GSTR 2A is kept up to date.


Given the scenarios outlined above, the reconciliation process has taken on new significance. In the event of a query, the assistance of a GST professional can be extremely beneficial. It is recommended that timely reconciliation be performed in order to remain compliant with the requirements. Businesses have gotten ahead by adhering to and carrying out the GST law’s compliance requirements.