Reconciliation in GST Audit

Reconciliation and GST Audit:

GST audits are performed every year in a company in order to check its compliance with the GST rules and regime. Reconciliation is a very keen step to take the GST Audit forward. Reconciliation in GST Audit means verifying the important areas and documents presented with the entries made by the company on GST Portal while filing returns or refunds. It is a tool to verify the data with the furnished information. 

Important areas for Reconciliation in GST audit:

There are certain issues that must have reconciliation in GST Audit before its finalization or before the auditors make a GST Audit report. These are filed in the FORM GSTR-9C while GST Return filing. Part-A of the form contains the reconciliation statement addressing all the points that are to be verified-

  1. Admissibility of the Input Tax Credits for claiming them during refunds.
  2. Verifying the place of supply in order to check the nature of tax paid and transactions made.
  3. Payment of value and GST added to the creditors within 180 days of the issue of the tax invoice.
  4. Claimed GST Refunds in the books of accounts.
  5. Input Tax Credits that has not been availed yet.
  6. Sales of assets of the company.
  7. Verification of any other income with the paid applicable GST rate.
  8. Compliance of the Reverse Charge Mechanism with the mandated provisions in the GST Act.
  9. Classification of the Goods and Services to determine the tax rates.
  10. Reviewing the Transitional Credit under GST regime.

GST Return Reconciliation in GST Audit:

The registered taxpayers have file for GST Returns. And GST Return filing is done three times every month and one on annual basis. This makes a total of 37 GST Returns in a year to be filed by the taxpayer. The timelines of GST Returns to be filed are as follows:

  • GST Return for outward supply is to be filed in GSTR-1 by 10th of every next month.
  • GST Return for inward supply is to be filed in GSTR-2 by 15th of every next month.
  • A combined monthly GST Return is to be filed in GSTR-3 by 20th of every next month.
  • An annual GST Return is to be filed on or before 31st December of each financial year.

During a GST Audit of the company or the firm has to make sure that the returns filed by them in GSTR-1, GSTR-2 and GSTR-3, have reconciliation with each other. This means that the returns filed and the amounts showed must match with the information in each of them. As this is a very important step in GST audit.

GST Return and Books of Accounts Reconciliation in GST Audit:

While having a GST Audit in a company, it is necessary for the taxpayer to ensure that the entries in books of accounts and the entries in electronic cash ledgers must be reconciled with the entries and details given during the GST Return filing in the GST Portal. This is important because during the audit a reconciliation statement is presented for information and records of the auditor.

Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or