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Invoice Matching Under GST

Invoice matching is a concept wherein all the taxable supplies obtained by a purchaser and provided by a seller are reconciled. The Government, through this concept, looks to guarantee the accurate exchange of Input Tax Credit (ITC) between the states and the parties involved in the transaction. So, in this article, we will decide the concept of invoice matching under GST and its significance.

Significance of Invoice Matching

The procurer of products is eligible to claim Input Tax Credit (ITC) for specified transactions. This advantage must be asserted when the details of purchases mentioned by the buyer in the GSTR-2A match with the details of the sale furnished by the provider in GSTR-1.

How does Invoice matching work?

As discussed above, invoice matching is a system wherein all taxable GST supplies are matched with the ones received by the buyer.

The Interlink is framed via auto-populace of the details recorded in the provider’s GSTR-1 and buyer’s GSTR-2A. Given that reason, it is extensively important for the buyer to guarantee the matching of information, without which he/she would not be able to claim input Tax Credit (ITC).

When the provider files GSTR-1 for the supplies made by him/her; the recipient or the procurer, would have the option to distinguish the purchases using the auto-populated GSTR 2A Form. This would empower the procurer to amend and credit his/her electronic credit ledger with the input credit on a provisional basis. Any amendments done in the GSTR-2A form will reflect in the supplier’s GSTR-1A Form.

Claiming Input Tax Credit (ITC)

Input Tax Credit can be claimed by the recipient or procurer when the provider of product or services furnished Form GSTR-3B. The acknowledgment of Input Tax Credit (ITC) must be indicated in Form GST MIS-1.

Components to be Matched

The accompanying details must be matched in the GSTN Portal at the time of furnishing GSTR-2A:

(i) GST identification number of the provider

(ii) GST identification number of the recipient

(iii) Invoice/Debit Note number

(iv) Invoice/Debit Note date

(v) Taxable Value

(vi) Amount of Tax

What Next?

Since you know the importance of invoice matching under GST, you should be thinking about what next? As subsequent stages, organizations must understand the significance of the IT system and compliance consistency. This is high an ideal opportunity to begin inspecting GST compliant ERP frameworks, and GST software & begin planning business with these frameworks. Execution of these systems might be tedious and in the end, non-compliant organizations may lose on business opportunities.

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GST Compliance