1. What is GST Reconciliation?
GST reconciliation is the process of matching a company's purchases with the sales of its suppliers for a given period in order to identify and close any gaps.
2. How to do GST Reconciliation?
GSTR-2A and Purchase Register are typically compared in GST Reconciliation. GSTR-2A is generated automatically based on sales returns (GSTR-1) filed by suppliers. This must be obtained from the GST portal of the governmentGST portal.The data should be compared to the company's purchase data, which is typically stored as Purchase Register entries in an Accounting system. Mismatches and missing entries must be identified and corrective actions taken. In many cases, suppliers must be notified, and in a few cases, the company's own Purchase Register entries must be corrected. Manual reconciliation is time-consuming and prone to error. iSteer GST automates the entire process with the click of a few buttons. (see - How It Works )
3. What is Input Tax Credit?
The Input Tax Credit (ITC) is the tax paid by businesses on purchases that can be used to offset sales tax liability. ITC can be claimed on goods and services used for business purposes. A key rule is that ITC can only be claimed if the supplier has uploaded the invoice to GSTN and paid the government's GST.
4. How to claim Input Tax Credit?
In the current GST regime, Input Tax Credit can be claimed using GSTR-3B. Entry is done manually, and care should be taken not to claim too much ITC, which may result in government action, or to claim less ITC than is eligible, which will lock up working capital.
iSteer GST not only assists in calculating accurate ITC but also in maximising ITC claim.
5. How does iSteer GST help you in maximizing Input Tax Credit and claim accurate ITC?
iSteer GST ITC CORNER provides a summary view of differences between GSTR-3B and GSTR-2A in an instance for any period since the start of GST until the present.
iSteer GST SMART RECON compares supplier data in GSTR-2A to the company's own Purchase Register in great detail. A detailed report is generated that categorises matches, mismatches, and missing invoices. Advanced features such as supplier notification are included. The entire process takes only a few seconds
6.How can businesses benefit from taking advantage of the ITC?
Businesses that maximise ITC reduce their tax liability, increase their working capital, and avoid revenue leakage (10% on average, and up to 30% in some cases).