Stop losing input tax credit: a GSTR-2B reconciliation playbook

Input tax credit (ITC) is real money — but a surprising amount of it goes unclaimed or gets reversed because the purchase register and the GST portal don’t line up. Here’s a practical way to close that gap.

This is general information to help you plan your process, not tax advice. Check current GST rules and deadlines with your tax advisor.

GSTR-2A vs GSTR-2B in plain English

Both statements list the purchases your suppliers have reported against your GSTIN, and both come from the GST portal. The difference is when they are fixed:

• GSTR-2A is dynamic. It keeps changing as suppliers file or amend their returns.
• GSTR-2B is a static monthly statement. It is generated once for the period, so it is the version most teams reconcile against when deciding what credit to claim.

In both cases, your purchase register is the other side of the comparison: what you booked. Reconciliation is simply the job of making the two agree, or explaining why they don’t.

Why ITC slips away

• Supplier hasn’t filed. The invoice is in your books but not yet in GSTR-2B, so the credit isn’t available this period.
• Mismatched details. GSTIN, invoice number or taxable value differ between your record and the portal.
• Duplicates and missed invoices. The same invoice booked twice, or a valid invoice never captured at all.
• Blocked credit. Some categories of purchase are not eligible for credit at all, so claiming them creates a problem later.
• Late payment to the supplier. Under GST Rule 37, credit has to be reversed if the supplier is not paid within 180 days of the invoice, which is easy to miss without tracking invoice age.

A monthly reconciliation loop

1. Pull GSTR-2A/2B for the period.
2. Match each portal line against your purchase register — exact matches first, then fuzzy matches on GSTIN + amount + date.
3. Classify every invoice by ITC state: Eligible, Pending, Blocked, Claimed, Reversed.
4. Chase the gaps — follow up with suppliers who haven’t filed before the claim deadline.
5. Claim what’s eligible and document the rest for the audit trail.

What the four match outcomes mean

When you compare a portal line with a register entry, it lands in one of four buckets. These are the same tiers Billacle uses:

• Matched. Same GSTIN, invoice number and amount on both sides. Claim it.
• Mismatch. The invoice exists on both sides but a detail differs, such as the amount or date. Find out which side is wrong and correct it.
• Probable. Not an exact match, but close enough that it is very likely the same invoice, for example a typo in the invoice number. Confirm and fix the record.
• Missing. In one list but not the other. Either the supplier hasn’t reported it or you haven’t booked it. This is the pile that costs money if nobody owns it.

The five ITC states

Every invoice moves through a lifecycle, and knowing the state is what keeps credit from being forgotten:

• Eligible. Matches and can be claimed.
• Pending. Waiting on the supplier or on a correction.
• Blocked. Not claimable for this purchase.
• Claimed. Taken in your return.
• Reversed. Given back, for example after the 180-day Rule 37 window passes unpaid.

A simple monthly calendar

Exact dates depend on your filing frequency, so confirm them for your business. A routine that works for most monthly filers:

1. Right after GSTR-2B is available: run the reconciliation and sort invoices into the four tiers.
2. Mid-month: chase suppliers on the Missing and Pending lists, and fix your own mismatches.
3. Before you file: finalise what is Eligible, and document what is Blocked or Pending so the reason is on record.
4. Every month: list invoices that are approaching 180 days unpaid, so payment or reversal is a decision, not a surprise.

Where automation helps

Doing this by hand in spreadsheets is slow and error-prone at volume. Billacle reconciles every invoice against GSTR-2A/2B automatically with match tiers and tracks the full ITC lifecycle, so the “Pending” pile is visible and actionable instead of forgotten, and it includes the 180-day Rule 37 reversal alert. The details are on the GST and ITC reconciliation page, and the glossary explains GSTR-2A/2B, ITC and Rule 37 in plain English.

Reconciliation works best when the purchase register is accurate to begin with. That is where accounts payable automation helps: invoices are captured, validated and checked for duplicates before they are booked, so fewer errors reach the register in the first place. If you run Tally, see automating invoice entry into Tally.

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