PR vs GSTR-2B Reconciliation: A Simple Guide

Under GST compliance, it has become necessary to reconcile your Purchase Register (PR) with GSTR-2B to make accurate Input Tax Credit (ITC) claims and file error-free returns. This ensures that the invoices entered in your books are aligned with the auto-generated GSTR-2B ITC statement issued by the GST Portal, 

which minimises the chances of missing ITC, GST notices, and compliance fines. Here, we will discuss the meaning of the Purchase Register and GSTR-2B, the importance of the PR and GSTR-2B reconciliation, and some common mismatches experienced by the business.

What is a Purchase Register (PR)?

A Purchase Register (PR) is the accounting record that your business keeps of all the purchases that are made within a tax period. It includes details such as:

• Supplier name
• Invoice number and date
• Taxable value and tax amount
• Place of supply

In a word, your PR is what your business has recorded in books; in actuality, your side of the trade. Correct PR is important as this is the foundation of your ITC claims when you are filing your GST returns, such as GSTR-3B.

What is GSTR-2B?

GSTR-2B is an auto-generated ITC statement that is provided by the GST Network (GSTN). It is prepared on/after the 14th day of the month that follows each tax period based on information provided by your suppliers through returns, such as GSTR-1, GSTR-1A,  GSTR-5, and GSTR-6, and import data.

GSTR-2B, as compared to GSTR-2A (which changes with supplier filings), is valid, not changing, periodically after it is generated, thus a stable and consistent source of data to determine your eligibility in claiming ITC for your GSTR-3B filings.

Why PR and GSTR-2B Matching is Important

It is important to reconcile the Purchase Register and GSTR-2B for several reasons:

1. Accurate ITC Claims: The GST law considers only invoices recorded in GSTR-2B to be eligible for ITC. In case you have entered a purchase in your books, that is not reflected in GSTR-2B, then you cannot take credit for the purchase under the law.

2. Prevent Loss of ITC: Without reconciliation, there is a chance that you may miss eligible ITC since you may fail to notice invoices which are appearing in GSTR-2B but have not been registered in your books.

3. Detect Supplier Non-Compliance: Reconciliation flags invoices missing in GSTR-2B, and this indicates that your supplier did not submit their GSTR-1 on time. This is a very important point to consider when following up with the vendor.

4. Avoid GST Notices & Penalties: Mismatches between your books and GSTR-2B can trigger scrutiny from GST authorities, which may result in interest or penalties for wrong ITC claims.

5. Improve Cash Flow: When you accurately claim the ITC, your overall tax liability will decrease, thus improving your working capital and overall cash flow.

Common PR vs GSTR-2B Mismatches

The mismatches may be a result of various reasons. Some common issues include:

Delay or Errors in Supplier Filing: When your supplier makes late filings, or no filings, of GSTR-1, invoices will not appear in GSTR-2B

GSTIN/Invoice Data are incorrect: Mismatches result due to differences between your PR and GSTR-2B in terms of supplier GSTIN, invoice number, and date.

Amount Differences: Small differences in the value of tax or tax amount can disrupt an exact match during reconciliation.

Timing Differences: You can capture an invoice in one period, but the supplier captures it in a different period, resulting in apparent mismatches.
Knowledge of these typical situations will help you explore and sort reconciliation flags successfully.

How to Reconcile PR with GSTR-2B with MYGST Refund Portal

Reconciliation is quicker and easier with a GST compliance platform such as MYGST Refund compared to meeting two Excel spreadsheets. The following is a way you can balance out your Purchase Register with GSTR-2B through the portal:

Step 1: Upload Your Data

Import your Purchase Register to the MYGST Refund platform. In invoice information, make sure that you include GSTIN, invoice number, date, taxable value, and tax amount.

Step 2: Get GSTR-2B on the GST Portal.

Link your GSTIN with the portal and retrieve the GSTR-2B information of the tax period that is relevant. It is an auto-drafted statement that serves as the starting point of ITC reconciliation.

Step 3: Run Reconciliation

Start with the reconciliation process. The portal matches every invoice of your PR and the entry in GSTR-2B using advanced tools.

Step 4: Review Results

The findings are divided into:

Exact Match: The perfect alignment of invoices.

Recommended Match: Small differences in invoices and probable matches.

Mismatch: Documents with high discrepancies.

Missing: Invoices that are found on one record but not on the other.

Step 5: Take Actions

In case of mismatch or missing invoices, you may:

Contact suppliers to amend or file missing returns.

Record appropriate information in your Purchase Register.

Reconciliation has found discrepancies in your ITC claims; include them in GSTR-3B.

Step 6: Export Reports

Download the reconciliation report to be audited, reviewed, or given to the vendor. This gives a documented account of compliance and an in-house audit.

Conclusion

PR vs GSTR-2B reconciliation is no longer optional. It is a major component of GST compliance that will keep your business safe against lost Input Tax Credit and GST notices and penalties. Any discrepancy between what is in your books and the automatically generated GSTR-2B data allows you to make sure that you capture all the eligible credits and prevent ineligible claims.

Make PR vs GSTR-2B Reconciliation Easy with MYGST Refund

PR vs GSTR-2B reconciliation tool, this process can be automated, giving in-depth information, minimising mistakes during this process, and making compliance easy. MYGST Refund, India’s #1 automated platform, saves the time and effort that you put into filling out forms manually, without making errors.

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Frequently Asked Questions

1. What is GSTR-2B reconciliation?
The reconciliation of the GSTR-2B involves comparing your Purchase Register (PR) against the auto-generated GSTR-2B ITC statement on the GST portal to identify perfect matches, differences, and invoices that have not been purchased at all so that you can claim the correct ITC.

2. How do you reconcile GSTR-2B and the purchase register?
You match GSTIN with your PR by comparing GSTR-2B data against your PR in terms of invoice number, invoice date, tax amount, and taxable value. This process can be automated using reconciliation tools to see the mismatch and invoices that are missing.

3. What is the difference between GSTR-2 and GSTR-2B?
GSTR-2 was a moving purchase return, which was never introduced, but GSTR-2B is a fixed auto-drafted ITC statement, which remains constant in each tax period; therefore, it is a sure-footed source of ITC reconciliation.