Why reconciliation of books with GSTR-2A is Important?
In GST, GSTR-2A is an online statement prepared based on data reported by suppliers based on the invoices issued on a particular GSTIN. GSTR-2A is a monthly statement of purchases and Input GST which is automatically prepared once the supplier files its GSTR-1 return and shows invoices raised on a particular GSTIN.
Why GSTR-2A is a very important statement?
GSTR-2A contains the invoice-wise data of the purchases made or expenditures incurred by a business on which it has paid GST. Thus it contains very important information about the transactions incurred by a business.
Why it is important to reconcile GSTR-2A with books?
As the transactions showing in GSTR-2A is compiled using the data reported by third parties. As the source of information is third party, 2A will always be one of the major thrust areas of audit by the GST officials. GST officials will demand to reconcile the transactions showing in 2A with books. If there are any discrepancies or mismatching there are serious consequences under the GST Law.
Apart from above the input tax credit claim is only confirmed once the invoice is reported by third party in the 2A. If this invoice level matching is not done then the ITC claim will be liable for reversal with interest and penalty costs.
Will GSTR-2A will be used by Income Tax Authorities just like 26AS?
It’s a definite Yes. Recently GSTN and CBDT have signed MOU for data sharing. Just like 26AS the form GSTR-2A will become one of the major investigation tools for income tax authorities. Income tax authorities will also demand reconciliation of form GSTR-2A with accounting records of the taxpayers.
In this era of robust data collection by revenue departments, data sharing has become one of the major instruments for checking tax evasion. As 26AS is being used by indirect tax authorities for checking of evasion of service tax and GST, the GSTR-2A will be used by income tax authorities for checking the genuineness of the expenditure claims of the taxpayers.
In current scenario of abundant data availability with government, the reconciliation of transactions appearing and reported across different systems and returns is a must do exercise. As the day to day transactions are prone to human errors, but timely reconciliation of data with own records is the need of the hour.
Amit Mundhra FCA
The author is a fellow member of ICAI. He can be reached at email@example.com