GST Compliance Checklist for CA Firms: Automating ITC Reconciliation

Enforce Inward Purchase Register Cut-Off (5th of Month)

Establish a firm cut-off date with all clients to submit raw purchase invoices, debit notes, and freight bills by the 5th of each calendar month.

GSTR-2B Auto-Generation Check (14th of Month)

GSTR-2B is static and generated on the 14th of each month based on suppliers’ filed GSTR-1 returns up to the 11th (or 13th for IFF quarterly filers). Verify that the JSON files downloaded from the GST portal match the aggregate tax liability figures in your working file.

Run Multi-Parameter 4-Way Matching Rules

Compare your Books Purchase Register against GSTR-2B across 4 key criteria:

• Exact Match: GSTIN, Invoice Number, Taxable Value, and Tax Amounts (CGST, SGST, IGST) match 100%.
• Fuzzy Invoice Number Match: Normalizing formatting differences such as INV/23-24/001 vs INV-2324-001 vs 001.
• Tolerance Value Difference: Invoices with tax rounding differences within +/- ₹1 to ₹2.
• Inter-State vs Intra-State Rate Check: Flagging cases where the supplier charged IGST instead of CGST + SGST (or vice versa).

Automate Vendor Follow-Ups for Unfiled Invoices (15th – 18th)

Generate automated discrepancy communications for suppliers whose bills appear in the purchase register but are missing in GSTR-2B. Provide suppliers with specific invoice numbers, dates, and amounts so they can file amendments in their subsequent GSTR-1.

Identify & Classify Mandatory Ineligible ITC (Rules 38, 42 & 43)

Segregate blocked credits under Section 17(5) (e.g., motor vehicles, food & beverages, personal consumption) and apply reversal calculations under Rules 42 and 43 for exempt supplies and capital goods usage.

Reverse Charge Mechanism (RCM) Liability Check

Ensure that RCM liabilities under Section 9(3) (GTA freight, legal fees, security services, director remuneration) are paid in cash through Table 3.1(d) of GSTR-3B before claiming corresponding ITC in Table 4(A)(3).

Auto-Populate GSTR-3B Table 4 & Maintain Audit Trail (20th)

Transfer eligible reconciled ITC into Table 4(A)(5) [All other ITC] and un-reconciled temporary credits into Table 4(B)(2) for reversal and reclamation in future tax periods. Retain timestamped audit working sheets.