TDS Reconciliation With GSTR-2A And Form 26Q

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What is GSTR 2A?

GSTR 2A is a purchase-related dynamic tax return that is automatically generated for each business by the GST portal. When a seller files his GSTR-1, the information is captured in GSTR 2A. It takes the information of goods and/or services that have been purchased in a given month from the seller’s GSTR-1. As a GST registered buyer, you may refer to the GSTR-2A for input tax credit details while filing GSTR-3B and GSTR-9. However, for GSTR-3B preparation since August 2020, taxpayers must refer to GSTR-2B which is a static version of GSTR-2A.

GSTR 2A will be auto-populated from the following returns of the sellers/counterparty :

  • Regular registered seller
  • Non-resident
  • e-Commerce operator
  • Input Service Distributor
  • Person liable to deduct TDS

Form 26Q: TDS Return filing for Non Salary Deductions

At the time of paying to the payee, the payer has to deduct TDS on certain occasions. This payment is other than salary payment, and the payer has to file TDS return in Form 26Q. 26Q is to be submitted on a quarterly basis.

Total amount paid during the quarter and TDS amount deducted on such payments have to be reported in 26Q

What to reconcile under GST?

GST reconciliation primarily involves matching the data uploaded by the suppliers with those of the recipient’s purchase data. This basically includes comparing the GSTR-2A auto-populated from suppliers data and the purchase data recorded by the receiver of the supplies. This matching concept also ensures that all the transactions which took place in a particular period have been recorded.

Why is it important to reconcile under GST?

It is very important to reconcile GST returns data because :

  • Under new GST returns, the taxpayers will only be able to claim ITC if the particular invoice is present in the GSTR-2A or supplier’s data. This requirement forces the businesses to reconcile and claim ITC correctly.
  • Sometimes, it happens that the vendor has declared his GST liability and credit has not been availed by the purchaser in his GST returns. So, not to lose the claim of ITC, the data should be reconciled on a regular basis. This reconciliation process will ensure no ITC loss on any invoices.
  • To avoid any duplication, taxpayers must consolidate and reconcile the values. This will ensure the correct declaration and maximise the credit of input taxes.

Also Read: Key Differences Between GSTR- 2A Vs GSTR- 2B

The Bottom Line

GSTR reconciliation is an essential compliance requirement for every registered person in India. CaptainBiz is the ultimate GST billing software that helps you provide the same and also Provides simple invoicing, real-time inventory management, and cost reduction, allowing you to grow your business seamlessly. 

Frequently Asked Questions:

Which ITC should claim in GSTR 2A or 2B?

CGST Rule 36(4) is amended to remove 5% additional ITC over and above ITC appearing in GSTR-2B. From 1st January 2022, businesses can avail ITC only if it is reported by the supplier in GSTR-1/ IFF and it appears in their GSTR-2B. From 1st January 2022, ITC claims will be allowed only if it appears in GSTR-2B 

Is GSTR 2A reconciliation mandatory?

Importance of GSTR-2A/2B for businesses. On January 1, 2022, the Finance Ministry launched the 100% invoice matching criteria and made it mandatory for all businesses. Essentially, any business that wishes to claim the ITC will have to show 100% parity between their filed returns and supporting invoices.

Is GSTR 2A dynamic or statutory?

GSTR-2A is a purchase-related tax return that is automatically generated for each business by the GST portal. It takes information from every seller’s GSTR-1 for a particular buyer registered under GST. The return is dynamic in nature and can vary with changes or revisions done by sellers in later tax periods

What does Form 26Q contain?

Form 26Q is a TDS Return/ Statement containing details of TDS deducted on payments other than salary. It is required to be submitted on a quarterly basis on or before the due date. Details of payments made and TDS deducted on such payments by the deductor are covered under this form.

Who files Form 26Q?

It is a statement for tax deducted at source on all payments except salaries. A deductor must submit his TAN (Tax Deduction Account Number) to submit the Form 26Q. Non-government deductors must quote the PAN, whereas, government deductors must quote “PANNOTREQD” on the form.

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Moulik Jain
I am a seasoned marketer specializing in Tax, Finance, and MSMEs. I bring a wealth of hands-on experience to demystify complex subjects, providing insightful guidance for entrepreneurs and finance enthusiasts alike.

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