The process of ITC reconciliation is a key tenet of the GST Act. It is being implemented and improved in order to capitalize on and eliminate the GST cascading effect. However, from the start of the Act's implementation, GST ITC has been an area with the most loopholes and frauds.
The government has enacted Section 16(2) (aa) along with the incumbent form GSTR-2A to eliminate fraudulent transactions involving bogus invoices and black supplies, which has become mandatory from January 1, 2022. A registered recipient can only claim GST ITC if the vendor has uploaded such an invoice in his GSTR-1 and communicated it via GSTR 2B, according to the section. This section amended Rule 36(4) to make it clear that provisional ITC on non-uploaded invoices is no longer permitted.
The two auto-generated returns for this amendment are GSTR-2A and GSTR-2B. Whereas GSTR-2A is a dynamic return that is updated in real-time as the vendor updates his GSTR-1. GSTR-2B, on the other hand, is a static auto-populated return generated after the vendor submits his GSTR-1. Both returns are currently described as the mode of communication, i.e., reconciling ITC data with GSTR 2A and GSTR 2B are required prior to claiming ITC for that specific month or quarter.
The taxpayer will have a difficult time adhering to these GST ITC Reconciliation provisions due to the extensive monthly/quarterly compliance of GSTR 2A Reconciliation and GSTR 2B Reconciliation. Automation services will be extremely beneficial in overcoming the challenges of maintaining, segregating, and matching GST ITC data. If the mundane task of integration and reconciliation is performed by a GSTR 2A/2B Reconciliation Software, then the only thing you need to worry about is the actions that require human decisions, and you will be free of all the tedious ITC reconciliation processes, and most importantly, the Best GST Software For Reconciliation, if used, can save you from inaccuracies as well.
Automation is actually a better idea, especially for the GSTR-2A and GSTR-2B Reconciliation process, which is a significant compliance phase in GST and can be handled by the GST ITC software. However, just like a good option, it can quickly turn into a bad option if the appropriate ITC reconciliation tool is not chosen. Improper data integration, a lack of specific labelled entries that can assist the user with their next action, or insufficient matching of entries, which can further complicate the process.
Finsights.biz is the Best GST ITC reconciliation software that you require. It not only intelligently automates and eliminates the entire ITC reconciliation issues, but it also provides users with additional features to make the compliance process accurate and interactive. The application of artificial intelligence for:
- Accounting data is automatically integrated with your current accounting software.
- Real-time tracking of each transaction entry
- Labeling each entry as Matched, Probable Matched, Mismatched, Missing in GSTR-2A/2B, or Missing in the books.
- Providing preliminary reports with insightful data
- Communication with suppliers via in-app feature for constant follow-ups
Unlike other GST ITC Reconciliation software, Finsights includes a ‘WhatsApp Alert' feature that sends users updates and alerts about follow-ups with suppliers that must be completed so that required entries are properly reflected in the user's GSTR-2A and GSTR-2B.
As a result, now is the time for professionals, business owners, and taxpayers to value their time and allow manageable tasks to be accurately automated. Automation is required for GST ITC Reconciliation compliance, and Finsights is not only automating your reconciliation process but rather augmenting your GST compliance overall.
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