ITC Reconciliation

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-pop

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