2B ITC reconciliation

Hi Sir/ Madam 

Suppose 10 Invoices are accounted in books on which ITC is eligible. On 10 Invoices is ITC 40,000

However only 8 invoices are appeared in 2B. On 8 Invoices ITC is 35000

In that case there will be mismatch in ITC reconciliation  between books and GSTR 2B (5,000)

How to handle this difference in month end/year end closing in books

Please advise

Thanks

 

Replies (2)
Quick Summary
This discussion addresses a common GST issue where Input Tax Credit (ITC) recorded in books doesn't fully match the GSTR 2B statement, resulting in a ₹5,000 difference. The advice includes verifying all invoices, investigating why two invoices are missing from GSTR 2B, and checking for portal errors. It's suggested that these missing invoices may appear in the next month's GSTR 2B, and it's crucial not to claim ITC for invoices not yet reflected in the current GSTR 2B to avoid portal flags. For year-end closing, a provision or suspense account can be used to reflect the mismatch.

A common issue in GST reconciliation! Handling ITC Mismatch To address the ₹5,000 mismatch in ITC reconciliation between books and GSTR 2B:

 1. *Verify the invoices*: Double-check the 10 invoices accounted in your books to ensure they are accurate and eligible for ITC.

 2. *Investigate missing invoices*: Identify the 2 missing invoices ( ₹5,000 ITC) that are not reflected in GSTR 2B. Check with your suppliers or vendors to confirm the invoices were indeed issued and dispatched.

3. *Check for errors in GSTR 2B*: Verify that there are no errors in GSTR 2B, such as incorrect invoice numbers, dates, or amounts.

 4. *Account for the mismatch*: In your books, create a provision or a suspense account to reflect the ₹5,000 ITC mismatch.

This will ensure that your financial statements accurately represent the ITC claimed. Month-End/Year-End Closing For month-end/year-end closing:

 1. *Reconcile ITC*: Reconcile the ITC claimed in your books with the ITC reflected in GSTR 2B. 2.

The 2 missing invoices were almost certainly uploaded by your supplier after the 14th of the month, which is when GSTR-2B gets generated. So they will show up in next month's GSTR-2B and you can claim the ITC then. Do not claim the Rs 5,000 ITC in the current GSTR-3B for invoices that are not in GSTR-2B, the portal will flag that as excess ITC. Check the IMS portal whether those invoices are visible under pending actions. If you see them there, do not reject them. Contact the suppliers to confirm those 2 invoices were filed and ask for their GSTR-1 acknowledgement. Tax Garden handles end-to-end [GST reconciliation and monthly compliance](https://taxgarden.in/services) for businesses if you want to avoid this mismatch chasing every month.

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