GST reconciliation: the five checks to run every month

A GST return is only as good as the reconciliation behind it. That was always true, but it used to be possible to get away without one for a while, because nobody compared your returns until an officer picked up your file. That is no longer the case. The portal now does the comparing itself, every month, and sends the notice without anyone having to decide to.

Five reconciliations, run monthly before you file, cover almost every mismatch that turns into a notice later.

Why the portal makes this non-optional

Two system-generated intimations do most of the work, and neither needs an officer to trigger it:

• DRC-01B (rule 88C) — when the liability in your GSTR-1 exceeds the tax paid through GSTR-3B for the same period by more than both ₹25 lakh and 20%. You have seven days to pay or explain; ignore it and your next GSTR-1 is blocked.
• DRC-01C (rule 88D) — when the input tax credit you claimed in GSTR-3B exceeds what GSTR-2B made available beyond a set threshold. Seven days, again, to pay it back with interest or explain.

Smaller differences don’t trigger these, but they don’t disappear either. They wait in the data for scrutiny, the annual return or an audit, by which time they are a year old and much harder to explain. If one does become a notice, our guide to GST notices covers what to do first.

1. Your sales register against GSTR-1

Every tax invoice, credit note and debit note in your books for the month should appear in GSTR-1, once, with the same value, the same customer GSTIN and the same tax head. Check, before you file:

• Totals by rate and tax head agree between the sales register and GSTR-1.
• B2B invoices carry the right customer GSTIN. A wrong GSTIN costs your customer their credit and will come back to you as a correction request.
• Credit notes are in the same period as in your books, and linked to the original invoices.
• The HSN summary agrees with the invoice-level data.

This is also the moment to catch invoices raised at the wrong rate. Since the rate changes of September 2025, a stale rate in the item master is the most common reason a sales register and a correct GSTR-1 disagree.

2. GSTR-1 against GSTR-3B

GSTR-1 declares the liability; GSTR-3B pays it. The two should agree for every period, head by head. Where they don’t, you need a documented reason — an invoice reported in GSTR-1 in one month but paid in another, or an amendment — and the difference should reverse in a later period.

Keep a running reconciliation, month by month, with a cumulative difference. A difference that grows every month is not timing; it is tax that has been declared and not paid, and it is exactly what DRC-01B is built to find.

3. Purchases against IMS and GSTR-2B

Your purchase register against the credit your suppliers have actually reported: the reconciliation that decides how much input tax credit you can safely claim. Since October 2024 it runs through the Invoice Management System, where you accept, reject or hold each supplier invoice before GSTR-2B is generated on the 14th.

It is the most involved of the five, with seven distinct kinds of mismatch, and we have written it up in full in the GSTR-2B reconciliation guide. The rule that matters here: the credit you claim in GSTR-3B should not exceed what GSTR-2B shows, unless you can explain why — that is what DRC-01C checks.

4. E-invoices and e-way bills against GSTR-1

If your turnover requires e-invoicing, every B2B invoice needs an invoice reference number from the portal, and the e-invoice data flows into your GSTR-1. Check three things:

• Every B2B invoice in the books has an IRN. An invoice that needed one and didn’t get it is not a valid tax invoice, and your customer can’t claim the credit.
• Nothing is left too late to report. Since 1 April 2025, businesses with turnover of ₹10 crore or more have 30 days from the invoice date to report it; after that the portal refuses.
• E-way bills match invoices. An e-way bill generated without a matching invoice in GSTR-1, or cancelled without a reason, is a red flag in any data comparison.

5. GST ledgers against the books

The portal keeps its own ledgers — electronic cash, electronic credit and liability — and your books keep theirs. They should tell the same story:

• Credit ledger vs input GST accounts. The balance of unused credit on the portal should agree with the input GST balances in your books.
• Cash ledger vs GST payable. Every challan in the books should appear on the portal, and nothing should sit unused in the cash ledger without a reason.
• Reverse charge paid in cash. Tax under reverse charge has to be paid in cash, not set off from credit, and then claimed back as credit.
• TCS credits accepted. If you sell through marketplaces, the tax they collect on your sales becomes usable only once you accept it on the portal.

The monthly calendar

For a monthly filer, the checks fit around the due dates like this:

When	What
1st–8th	Close the sales and purchase registers. Start working IMS and chasing suppliers while they can still fix their GSTR-1.
Before the 11th	Checks 1 and 4 — sales against GSTR-1, e-invoices and e-way bills — then file GSTR-1.
14th	GSTR-2B is generated. Recompute it if you act in IMS after this date.
Before the 20th	Checks 2, 3 and 5 — GSTR-1 against 3B, purchases against 2B, ledgers against books — then file GSTR-3B.

Run like this every month, the annual return becomes a formality: GSTR-9 is largely the sum of twelve months that have already been reconciled. Skip the monthly checks and GSTR-9 is where a year of differences arrives at once. Our GST and TDS due date calendar keeps the dates in front of you.