GSTR-2B Reconciliation Tool - Ways To Improve Your ITC

GSTR-2B Reconciliation Tool - Ways To Improve Your ITC

Since the implementation of GST, the claim of the input tax credit has undergone numerous changes, with the government's intention of allowing less and recovering more and restricting the claim to invoices/debit notes uploaded by suppliers in GSTR-1


The most advantageous and complicated provision in the GST structure is the Input Tax Credit. When businesses have the checks and balances to reconcile their available ITC data and identify only the eligible Input Tax Credit, claiming the maximum eligible ITC becomes simple. 


The taxpayer knows that the GSTR-2B auto-generated statement is the final and definitive source for determining your eligible ITC.

However, many taxpayers need to pay more attention to the routine reconciliation of their GSTR-2B against their purchase records, resulting in the loss of eligible ITC due to the supplier's noncompliance. 


The GSTR-2B is a static statement that only contains information about input tax credits for a single return period. This assists taxpayers in determining the exact input tax credit for the specified return period. Furthermore, the GSTR-2B contains section-by-section advisories outlining the actions taxpayers must take in their GSTR-3B.


The GSTR-2A is a dynamic statement that is updated each time one of a taxpayer's suppliers files their GST return for outward supplies.


This article will discuss the relationship between the GSTR-2B reconciliation and claiming your eligible GST Input Tax Credit with the best in market GSTR-2B Reconciliation Tool


Facts Everyone Should Know About GSTR-2B


GSTR-2B was started in August 2020. It is generated by recipient taxpayers once a month on the 12th of the month following the tax period until January 2021.


For example, GSTR 2B for August 2021 will be available on September 12, 2021.


Beginning from January 2021, taxpayers were able to generate the GSTR-2B on or after the 14th of each month for a tax period.


For example, GSTR 2B for October 2022 will be available on November 14th, 2022.


The timelines for GSTR-2B generation can be found on the government portal under the 'View Advisory' tab.

GSTR-2B will include the input tax credit for purchases made by regular taxpayers and non-resident taxable persons. The input tax credit provided by the input service distributor must also be available.


According to the most recent update, the recipient taxpayer must reconcile ITC with GSTR-2B auto-populated invoice details in order to claim ITC on GSTR-3B.


Separate disclosures of ineligible ITC and ITC reclaimed during the month are required in GSTR-3B.


Because of budget changes, the portal no longer allows taxpayers to file the GSTR-3B if the GSTR-1 return for the same tax period is not filed. As a result, sequential filing of GST returns on the GSTN portal has become mandatory.


7 Benefits and features of GSTR-2B


The data in GSTR-2B is presented in such a way that taxpayers can easily reconcile ITC with their own books of accounts and records. It will aid in the identification of documents and ensure the following:

  • The input tax credit cannot be claimed on the same document more than once.

  • Wherever necessary, the tax credit is reversed in accordance with GST law in their GSTR-3B.

  • GST is correctly paid on a reverse charge basis for the relevant documents, including service imports.

  • The best way to identify gaps in the GSTR-2B statement is to reconcile your auto-generated GSTR-2B with your Purchase Records or Books of Accounts.

  • This is the most effective method for determining which transactions lack ITC in the GSTR-2B statement.

  • For smaller volumes of transactions, manual reconciliation is an option. But what if the transaction volume is significant?

  • The large volume of transactions will undoubtedly be a problem, and the clerical team will become engrossed in these reconciliations, wasting valuable business time and resources, they might need a powerful GSTR-2B Reconciliation Tool for their business.

What Are Features Of GSTR-2B - Is it a Scam?

  • View and download the summary statement in PDF format.
  • Instantly obtain section-by-section details or a complete download of ITC.
  • Section-specific advice is available.
  • Allows for text searches across all generated records.
  • Data can be viewed, filtered, and sorted as needed.
  • If the file contains more than 1,000 records, there are options for a full download of GSTR-2B and an advanced search.
  • The taxpayer will be notified via email or SMS that GSTR 2B has been generated.


Matching of 2B with books of account - How To Turn Your Matching Of 2B From Blah Into Fantastic?


It is more important to match GSTR-2B with purchase books than GSTR-3B. Because, beginning in late 2020, GSTR-3B was auto-populated with the values from GSTR-1 and GSTR-2B forms for the corresponding tax period. As a result, there are fewer chances of mismatches.


Once the values from GSTR-2B are obtained, the values from GSTR-2A are no longer required. The Offline Matching Tool on the GST portal allows taxpayers to match their purchase register with the GSTR-2B form. It is critical that you enter data into the tool and import it in the same format as specified on the GST portal. 


Otherwise, the tool will generate an error and you will be unable to continue matching GSTR-2B records with purchase register. A GSTR-2B Reconciliation Tool is required to claim ITC for every business in India. 


For large businesses, one of the most significant challenges of manual reconciliation under GST is a lack of consistency.


In India, many small and medium-sized businesses still prefer manual reconciliation to computerised reconciliation. However, as the number of invoices increases, reconciling your Purchase Registers against your GSTR-2B becomes more difficult. As a result, your business will no longer be eligible for GST Input Tax Credit.


For a large volume of transactions, manual reconciliation is a BIG -NO!

  • The risks of manually reconciling GSTR-2B with books of accounts are as follows.
  • The risk of error in filing annual GST returns.
  • Mismatches between invoice numbers in the Purchase register and invoices received from the supplier, as reflected in the GSTR-2B statement.
  • Invoice date mismatch because the dates of recording the invoices on the seller's and purchaser's sides differ.
  • When the number of invoices increases, it takes a significant amount of time for the clerical team to reconcile and validate each invoice received from the supplier.

GSTR-2B Reconciliation Tool


Businesses should use an 'Automated GSTR 2B Reconciliation Tool,' such as GSTHero.

Automating GSTR-2B vs Purchase Records reconciliation saves time and generates a detailed report that shows the statement's mismatches as well as the eligible ITC.


GSTHero, a cloud-based software, offers a sophisticated GSTR-2B Reconciliation Tool for quickly comparing GSTR 2B with purchase data, including the bill of entry.

  • Import purchase data from Tally or any other ERP software with a single click.
  • Advanced filters and an excel report summary allow you to take action and maximise your ITC claims.
  • GSTR-2B vs GSTR-3B instant comparison report is available. 
  • Each invoice is subjected to over 100 validation checks. 
  • Advanced filters ensure that reconciliation is accurate. 
  • Make contact with GST defaulting suppliers.


As a result, businesses should consider using an automated GSTR-2B Reconciliation Tool to identify and claim their eligible ITC and protect their working capital, which goes toward paying GST liabilities in cash if ITC is unavailable.

This post is submitted by: GST Hero

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