Summary of "!! ALERT !! WRONG DATA PROVIDING BY GST PORTAL IN GSTR3B VS GSTR2A/2B ITC COMPARSION MENU"

Summary of Business-Specific Content from the Video on GST Portal Data Errors

Topic

The video highlights a critical operational issue with the GST portal’s ITC (Input Tax Credit) comparison tool, specifically the mismatch between ITC claimed in GSTR-3B returns versus ITC data reflected in GSTR-2A/2B reports. This discrepancy can lead to significant errors in GST filings and potential financial misstatements.

Key Issues & Operational Insights

GST Portal Tool Breakdown:
- The GST portal offers a Tax Liability and ITC Comparison tool that compares figures from:
  - GSTR-3B (summary return filed by taxpayers)
  - GSTR-2A/2B (auto-populated purchase data from suppliers)
- Earlier, the tool compared ITC claims against GSTR-2A data and worked reasonably well.
- The portal has shifted to using GSTR-2B data for ITC comparison, which includes credit notes and ITC reversals, but the tool fails to properly account for these reversals.
Core Operational Problem:
- The portal does not deduct ITC reversals (credit notes) from the ITC claimed, leading to a false appearance of lower ITC claims by the taxpayer.
- This results in large discrepancies (example: ₹37,000 variance in one month) suggesting the taxpayer has claimed less ITC than they actually have.
- Example months with discrepancies include October, November, and December, where ITC reversals were significant but not reflected in the portal’s comparison.
Impact on Business Operations:
- Businesses relying on this tool for reconciliation may incorrectly adjust ITC claims, leading to:
  - Under or over-claiming ITC.
  - Potential compliance risks and financial inaccuracies.
- The tool’s errors create confusion and could lead to unnecessary tax payments or penalties.
Comparison of GST Portal Versions:
- Older portal version (referred as “1920”) compared ITC against GSTR-2A and showed more accurate results.
- Newer version (referred as “202”) uses GSTR-2B but does not factor in credit note reversals, causing large variances.
- Historical data (e.g., March 2020) shows the tool worked better when based on 2A data.

Frameworks, Processes, and Recommendations

Reconciliation Process for ITC:
- Compare ITC claimed in GSTR-3B with ITC accrued as per GSTR-2A/2B.
- Adjust ITC claims by deducting credit notes and reversals (which the portal currently omits).
- Manually verify ITC reversals to avoid errors in reconciliation.
Actionable Recommendations:
- Do not solely rely on the GST portal’s ITC comparison tool for final reconciliation.
- Cross-check ITC claims with supplier credit notes and ensure reversals are accounted for.
- Raise awareness with GST department about this portal error for correction.
- Use detailed reports (Report No. 4 & 5 on the GST portal) to verify ITC claims and reversals.
- Maintain detailed records of credit notes and ITC reversals for audit and compliance purposes.
Communication & Feedback:
- The presenter encourages taxpayers to report this issue to GST officials and toll-free helplines.
- Suggests sharing this knowledge within finance and accounting teams to prevent errors.

Key Metrics & Examples

ITC Variance Examples:
- October: Portal shows ITC as ₹9,847, claimed ₹0 → discrepancy due to unaccounted credit notes.
- November: Portal shows ITC as ₹97,000, claimed ₹0 → similar issue.
- December: Portal shows ITC as ₹61,000, claimed ₹37,000.
- Total variance example: ₹37,000 difference in ITC claims due to portal errors.
- Credit notes reversal example: IGST credit note of ₹28,000 not deducted, inflating ITC figures.
Tool Versions:
- 1920 tool (older): ITC figures closer to actual claims as it used GSTR-2A.
- 202 tool (newer): ITC figures show inflated amounts as reversals are not deducted.

Presenters / Source

Presenter: Host from Telem & Institute (specializing in Tele Software Account and GST practical knowledge).
The video is practical and focused on GST compliance and operational accuracy for businesses dealing with GST returns.

Summary

Businesses should be cautious when using the GST portal’s ITC comparison tool as it currently does not factor in ITC reversals (credit notes), leading to inaccurate ITC claim comparisons. Companies must manually reconcile ITC claims with supplier credit notes and reversals to avoid compliance risks. The GST department should be alerted to fix this portal issue. This insight is crucial for finance teams, accountants, and GST practitioners to ensure accurate tax filings and avoid costly mistakes.