What your accountant needs before a GST filing

The inputs to a periodic GST filing are short to list. A sales register covering every outward supply for the period. A purchase register covering inward supplies, with the credit-eligible ones identifiable. The auto-drafted statement of input tax credit from the portal, which is built from what your suppliers reported. And the reconciliation between the last two.

The first three are documents you either have or do not. The fourth is a process, and it is where essentially all of the difficulty lives, because it is the only part that depends on other people's behaviour rather than your own.

That asymmetry is worth sitting with. You control whether your sales register is complete and whether your purchase invoices are filed. You do not control whether a supplier filed their return, filed it on time, filed it against your correct GSTIN, or filed the figures you recorded. Your entitlement to credit is affected by all four, and you find out through a comparison rather than a notification.

So a business that arrives at filing day with three clean registers and no reconciliation has done most of the visible work and none of the work that determines the outcome. This is the specific reason accountants ask for records early rather than on the deadline: the reconciliation is what needs time, and what it finds sometimes needs somebody else to act.

The sales register is the record of what you supplied during the period, and it needs to be complete rather than merely long, because completeness is the property that gets tested.

For each supply it should carry the invoice number and date, the customer with their GSTIN where they are registered, the taxable value, the rate and the amount of each tax head separately, the place of supply, and the HSN or SAC. The place of supply is worth singling out because it determines whether the transaction carries integrated tax or the central and state pair, and getting it wrong produces a return that reports the right total under the wrong head.

Completeness is tested through the invoice sequence. The numbers should be consecutive with no unexplained gaps, cancelled invoices should be present and marked rather than deleted, and credit and debit notes issued in the period belong in the register too, since they alter the reported figures. A gap nobody can explain invites the inference that a supply is being omitted.

The register also needs to include the supplies people forget because they do not feel like sales: supplies to unregistered customers, exempt or nil-rated supplies, exports if any, advances received where the rules require them to be reported, and any supply on which the recipient rather than you pays the tax. Each has its own treatment, and each is a place where an incomplete register produces a return that is wrong in a way nothing in your own records will reveal.

The purchase register serves a different purpose from the sales register. It is not primarily a record of spending, it is the basis of a claim, and that changes what it has to contain.

For each inward supply it needs the supplier with their GSTIN, their invoice number and date, the taxable value, the tax under each head, and a determination of whether the credit is eligible. That last field is the one most often absent and the one that matters most, because not every tax paid on a purchase is claimable. Specific categories are blocked or restricted, and purchases used for personal purposes or for making exempt supplies are treated differently. A register that records tax paid without recording eligibility is a register that overstates the claim.

The supplier's GSTIN is the join key for everything downstream. An invoice recorded with a wrong or missing GSTIN cannot be matched against portal data at all, so it appears as a mismatch regardless of whether the supplier did everything correctly.

The register also has to distinguish purchases where the liability falls on you as recipient, since those are handled differently from ordinary purchases and are a common source of error.

What cannot substitute for a purchase invoice is a payment record. A bank transfer proves money moved; it does not establish the taxable value or the tax charged, and a claim cannot rest on it. This is the single most common documentation gap at filing time.

The portal provides an auto-drafted statement of input tax credit, assembled from returns filed by your suppliers. Its defining characteristic is that it is static: it is generated for a period after a cut-off and does not then update as suppliers file late. Invoices filed after the cut-off flow into a later period's statement instead.

That single property explains most of what confuses people. A purchase you correctly recorded, from a supplier who filed correctly but late, is genuinely absent from this period's statement and will appear in the next one. Nothing is wrong and nothing is lost, but the current period will not carry that credit. The exact cut-off and generation timing are set by the portal and have been described differently at different times, so the operating rule to rely on is the mechanism rather than a date: the statement is a snapshot taken after a cut-off, and late filings roll forward.

Matching then produces four outcomes. Present in both and agreeing, which needs nothing. Present in your register, absent from the statement, which means the supplier has not reported it yet, has reported it against a wrong GSTIN, or you recorded an invoice that does not exist. Present in the statement, absent from your register, which means you have missed an invoice or a supplier has reported something against your GSTIN that is not yours. And present in both with different figures, which needs one of you to correct.

Only the first needs no decision. The other three are the work.

A mismatch is not a clerical annoyance. It is a fork where somebody has to make a decision under a deadline, and the options are all imperfect.

If your invoice is not in the portal statement, you can claim the credit and carry the risk that it is never reported, or not claim it and lose the cash flow for at least a period. Which is appropriate depends on the rules as they currently stand and on the specific facts, and it is a decision for your accountant rather than a preference.

If the figures differ, someone must establish which is right, which usually means contacting the supplier. That is a phone call to another business's accounts department, and its speed is not under your control.

This is why the timing of your handover matters so much. A mismatch found with time remaining can often be resolved by the supplier in their next filing, and the credit is recovered. The same mismatch found on the deadline cannot be, because the correction depends on somebody else's filing cycle.

There is a harder deadline behind the soft one. Entitlement to claim credit for a financial year is subject to a cut-off tied to a date in the following year and the filing of the annual return, so credits are not available indefinitely. The exact formulation has been amended and should be checked in the current provision. The consequence is that a mismatch ignored for long enough stops being a timing problem and becomes a permanent loss, paid as tax twice: once to your supplier and once to the government.

A complete reconciliation tells you exactly where your records and the portal data agree and disagree. That is genuinely valuable and it is narrower than it sounds.

It cannot tell you whether a credit is legally admissible. An invoice that matches the portal perfectly may relate to a blocked category or to a purchase used for exempt supplies, and the match says nothing about either. Agreement between two records is not a statement about eligibility, and treating a matched line as a claimable line is a specific and expensive error.

It cannot tell you whether a supply was correctly classified. A matched invoice carrying the wrong rate or the wrong place of supply is matched and wrong on both sides, and the reconciliation will confirm the agreement rather than question the substance.

It cannot see a purchase for which you never received an invoice, or a sale you never recorded. Nothing in a comparison of two registers detects an event absent from both.

This is also the boundary of what software can do here. Matching two registers on GSTIN, invoice number, date and value, scoring near-matches and reporting an unmatched remainder without forcing weak matches through is mechanical work that a person does slowly and inattentively, and it is worth automating. Deciding whether a credit is eligible, whether a rate is right, and whether to claim against a supplier who has not filed are judgements involving law and risk, and a tool that presents them as resolved is asserting something it cannot know.