As per Rule 36(4) of Central Goods and Service Tax Rules, 2017, a taxpayer filling GSTR 3B can claim provisional Input Tax Credit upto 110% of claim available in GSTR 2A of the respective month. This rule is applicable from 1st January 2020. (Same was earlier 120% for the period October 2019 to December 2019).
Where to report ITC in GSTR 3B?
Under table 4 of GSTR 3B ITC is reported which is as follows:
Basically we provide summary of ITC in GSTR 3B. And now we have to match these amounts with the amount showing in GSTR 2A.
What is GSTR 2A?
- GSTR 2A is auto populated form. It is generated from the invoices uploaded by the suppliers in the GSTR-1. (i.e. outward supplies of supplier)
- GSTR 2A can be seen after logging in GST portal in between GSTR 1 and GSTR 3B.
- We can see invoice wise details of inward supplies, (Inputs, input services, capital goods) here, if uploaded by the supplier.
- This can be downloaded in Excel or Json file. For the reconciliation purpose it will be easier to download in Excel version.
How to reconcile GSTR 2A with GSTR 3B in Microsoft Excel?
So now this is the most important and trending topic these days. Though, it sounds easy task but one should be aware of the Excel formulas for this. Once you get comfortable with these formulas, it will be easy for you to go ahead in matching and reconciling the data.
For this you must have data of GSTR 3B and GSTR 2A in the excel format. GSTR 2A is system generated, and it is downloaded from portal. GSTR 3B data is taken from the books that we have prepared.
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Taxpayer needs to arrange both the data in two separate tables in the format shown below.
After gathering all data in the above format, we need to insert 2 pivot tables and then apply Vlookup formula.
A Pivot table is a tool available in excel for data summary which is used in processing of data. Pivot tables are used for summarizing, sorting, reorganizing, grouping, numbering, complete or average data stored in a database. This allows its users to convert columns into rows and rows into columns.
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VLOOKUP is an Excel function for searching and recovering data from a particular column in the table. Pivot Table and Vlookup makes it easier to compare the data of GSTR 2A with GSTR 3B.
For inserting Pivot Table, following steps need to be followed:
Step 1: Arrange the data as shown in above format. For inserting pivot table we need to go to insert Menu then select the Pivot Table tab.
Step 2: After that a dialogue box named create pivot table will appear.
Step 3: Where you will have the table or range {in this case choose from Column A to Column I. (A3 : I16)} or if your table is in another file then you can go and choose it via option – use external data source .
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Step 4: After choosing the Range Source. We will have to choose that whether you want pivot table to appear on the existing (same) sheet or in another sheet, accordingly you have to select the location.
Step 5: After doing the above tasks click ok.
Step 6: Then a dialog box stating Pivot table field list will appear. Choose or drag the fields to their respective heads as per requirement.
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Step 7: For our convenience we are using the Labels for Row- GSTIN, Party’s Name – Go to Choose fields to add in Report or drag the same there.
Step 8: Labels for Column: IGST, CGST, SGST. And for value use sum.
Remember apply Pivot Table for both data separately i.e. GSTR 2A and GSTR 3B. This is how our Pivot table will look like –
When we get ready with 2 Pivot tables, we need to copy paste them in new excel sheet, so we can now compare data GSTIN wise. For comparing data, we can use Vlookup formula.
We will apply the formula to GSTIN of the GSTR 3B and compare the taxes in both. By this we will come to know which party has not shown our ITC. If there is difference in the taxes of the parties, we have to check the data of that party invoice wise only. So this first comparison will give us data of any invoices which are missing in GSTR 2A, and few other mismatches.
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We have to again apply Vlookup formula which is =VLOOKUP(), to the GSTIN of GSTR 3B, so we can come to know about invoices which are there in GSTR 2A but not in GSTR 3B.
In its simplest form, the VLOOKUP function says:
=VLOOKUP (What you want to look up, where you want to look for it, the column number in the range containing the value to return, return an Approximate or Exact match – indicated as 1/TRUE, or 0/FALSE).
For VLOOKUP you have to follow the following steps-
- Go to a cell and write = VLOOKUP()
- Then choose the value that we are looking for.
- Then choose the table array (data from where you want to choose) from the tables.
- Now choose the column from where you want the data.
- And finally choose the range where we want LOOKUP to take data from.
After doing this you will get the unreconciled figures. By this comparison, we will get to know the data missing in GSTR 2A or missing in GSTR 3B or any other mismatch. Now, we will do reconciliation in the following format:
So, this is how we can reconcile the data.
Reasons for the differences in the GSTR 3B and GSTR 2A :
- The most prima facie reason is Supplier has not filled GSTR 1.
- ITC availed as per Reverse Charge Mechanism.
- The supplier is having frequency of uploading GSTR 1 Quarterly.
- ITC relates to import of services and goods.
What to do after identification of differences?
The only thing a taxpayer can do is to take follow up with supplier and ask them to file their GSTR 1 timely with correct amounts.
Why it’s important to reconcile GSTR 3b with GSTR 2A?
GST Department is issuing notices for the differences in GSTR 3B and 2A, and asking them to reconcile the same. Notices are issued in Form GST ASMT – 10. Hence, it’s better to reconcile it on timely basis to avail right ITC.
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The authors of above article are CA Ankita Gandhi and Sneha Bhalotia.
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