GSTR-2B Reconciliation & ITC | Savlana Init

GST Compliance · GSTR-2B & ITC

GSTR-2B Reconciliation & ITC — Claimed Right. Reversed Right. Audit-Ready.

Monthly GSTR-2B reconciliation and ITC management — match your purchases with GSTR-2B, maximise eligible ITC, correctly reverse blocked credit under Section 17(5), and file GSTR-3B Table 4 without errors.

GSTR-2B is the auto-populated static input tax credit statement generated on the 14th of each month, capturing all supplier GSTR-1 and GSTR-5 filings up to the 13th. Unlike GSTR-2A (which is dynamic and changes with every supplier filing), GSTR-2B is locked for the month — it represents the ITC available to you for that tax period and is the authoritative basis for ITC claims in GSTR-3B. The GST department has made GSTR-2B the foundation of ITC scrutiny — ITC claimed in GSTR-3B that is not supported by GSTR-2B is subject to demand proceedings under Rule 36(4) and Section 16(2)(c).

GSTR-2B reconciliation is the monthly process of matching your purchase register against GSTR-2B — line by line — to identify: invoices in your purchase register that also appear in GSTR-2B (eligible ITC, safely claimable); invoices in your register not in GSTR-2B (supplier not yet filed — ITC must be deferred); and entries in GSTR-2B not in your register (phantom entries — wrong GSTIN or uninvoiced supply). Beyond the matching exercise, the ITC management process also requires correct classification of eligible vs. blocked ITC, proportionate ITC reversal under Rule 42/43 for mixed-use businesses, and preparation of the Table 4 breakup in GSTR-3B.

GSTR-2B reconciliation, when done correctly and monthly, is one of the most powerful tools available to a business — it prevents inadvertent ITC demands, maximises the credit available in each period, maintains a clean relationship with the GST department, and builds an audit-ready ITC ledger that stands up to scrutiny. We perform this reconciliation as a core part of our monthly return filing service and as a standalone ITC management engagement for businesses that want professional ITC oversight.

Our GSTR-2B Reconciliation & ITC Services

Monthly GSTR-2B vs Purchase Register Matching

Line-by-line reconciliation of your purchase register against GSTR-2B — identifying matched ITC, unmatched purchases, phantom entries, and amount discrepancies.

ITC Eligibility Classification

Classification of all inward supply ITC as fully eligible, partially eligible, blocked under Section 17(5), or RCM ITC — with amounts for each category for GSTR-3B Table 4.

Rule 42 / Rule 43 Proportionate Reversal

Computation of proportionate ITC reversal under Rule 42 (inputs/input services used for exempt or non-business purposes) and Rule 43 (capital goods) for businesses with mixed supply.

Section 17(5) Blocked ITC Identification

Identification and reversal of blocked ITC on motor vehicles, food and beverages, club memberships, works contracts, and personal use expenses — in GSTR-3B Table 4(B).

GSTR-3B Table 4 Preparation

Preparation of the complete Table 4 breakup for GSTR-3B — 4(A) eligible ITC, 4(B) ITC reversals, 4(D) ineligible ITC — ensuring correct net ITC available for offset.

Supplier Gap Follow-Up Report

Monthly report of invoices in purchase register not appearing in GSTR-2B — with supplier-wise gap analysis and structured follow-up communication templates.

ITC Ledger Maintenance

Maintenance of a running cumulative ITC ledger — tracking ITC claimed, ITC reversed, ITC lapsed, and ITC available — for GSTR-9 Table 8 and audit reference.

GSTR-2B ITC Mismatch Notice Response

Drafting of replies to department notices arising from ITC mismatch between GSTR-3B claims and GSTR-2B — with reconciliation statements and supporting documentation.

Our Process

GSTR-2B Download (14th of Month)

On availability of GSTR-2B on the 14th, it is downloaded and structured for reconciliation — by supplier, invoice number, and tax amount.

Purchase Register Preparation

Your purchase register for the month is exported from accounting software and cleaned — duplicate entries, non-GST purchases, and exempt purchases separated.

Line-by-Line Matching

Each purchase invoice is matched against GSTR-2B on GSTIN, invoice number, date, and tax amount — matched, mismatched, and unmatched entries are segregated.

ITC Classification & Reversal Computation

Eligible ITC is confirmed. Blocked ITC under Section 17(5) is reversed. Rule 42/43 proportionate reversals are computed. RCM ITC is tracked separately.

GSTR-3B Table 4 & Filing

Table 4 breakup is prepared and GSTR-3B is filed with the correct net ITC claimed — with the reconciliation file maintained as the audit trail for the period.

Why It Matters

✓GSTR-2B is the statutory basis for ITC — reconciliation protects all claims

✓Phantom entries identified before ineligible ITC is claimed

✓Section 17(5) blocked ITC reversed correctly every month

✓Rule 42/43 proportionate reversal computed — no under-reversal risk

✓Supplier gap report enables timely follow-up before ITC cut-off

✓Running ITC ledger maintained — GSTR-9 Table 8 always ready

✓GSTR-3B Table 4 prepared accurately — no aggregate errors

✓Mismatch notices replied to with complete reconciliation evidence

Frequently Asked Questions

Section 16(2)(aa) of the CGST Act (effective January 1, 2022) requires that ITC is available only to the extent it is reflected in the taxpayer's GSTR-2B. Rule 36(4) further restricts ITC claims to GSTR-2B amounts. As a result, claiming ITC in GSTR-3B that is not in GSTR-2B — even if supported by a valid supplier invoice — creates an ITC demand risk. GSTR-2B is the monthly locked statement that proves the ITC is supported by supplier filing.

Until it was formally replaced by Section 16(2)(aa), Rule 36(4) allowed taxpayers to claim up to 105% (and earlier 110%) of GSTR-2B ITC in GSTR-3B to account for invoices not yet filed by suppliers. This provisional ITC provision has been progressively tightened and the current requirement is strict alignment with GSTR-2B — provisional ITC beyond GSTR-2B is no longer permitted under the current legal framework.

Section 17(5) blocks ITC on: motor vehicles for transportation of persons (with limited exceptions); food, beverages, outdoor catering, beauty treatment, health services, and cosmetic surgery; works contract services for construction of immovable property; goods or services for construction of buildings for sale; and any supply used for personal consumption. ITC on these is not available regardless of whether the supplier has filed their GSTR-1.

Rule 42 applies to businesses that make both taxable and exempt supplies or use inputs partly for business and partly for non-business purposes. The ITC attributable to exempt supplies or non-business use must be reversed — either by specific identification or proportionate formula (ITC × Exempt Turnover / Total Turnover). This reversal is computed monthly and an annual adjustment is made in the March return. The reversed ITC is added to the cost of supply.

If the ITC claimed in GSTR-3B exceeds the ITC in GSTR-2B for a period, the excess is flagged by the GSTIN-level GST system. The department can issue a notice under Section 61 (scrutiny of returns) or initiate demand proceedings under Rule 86A (blocking of the electronic credit ledger). The taxpayer must either reverse the excess in the next GSTR-3B or produce evidence that the invoice was covered by a valid supplier filing that should have appeared in GSTR-2B.

ITC on RCM (Reverse Charge Mechanism) purchases is not reflected in GSTR-2B — because RCM tax is paid by the recipient, not the supplier, and does not come through supplier GSTR-1 filing. RCM ITC is available to the recipient in the same tax period in which the RCM tax is paid in cash (subject to Section 16 conditions). It is reported separately in GSTR-3B Table 4(A)(2) and must be tracked independently of the GSTR-2B reconciliation.

Want your GSTR-2B reconciled and ITC correctly managed every month?

We match your purchase register against GSTR-2B, classify ITC correctly, compute reversals, prepare Table 4, and file GSTR-3B — so every rupee of eligible ITC is claimed and protected.