Hello, in this post we will look into the concept of invoice matching under GST. We will cover the following topics in this blog post:

What is Invoice matching under GST?

Invoice matching is a concept where all the taxable supplies acquired by a buyer and supplied by a seller are matched.

It seeks to ensure the accurate transfer of Input Tax Credit (ITC) between the involved parties.

Importance of Invoice matching

Under GST, the Input Tax Credit (ITC) of the purchase of goods or services will only be available if it met certain conditions.

The details of the inward supply filed under the GSTR-2 return of the buyer match with the details of outward supplies filed in GSTR-1 of the supplier.

So, this interlinking is possible by the auto-population of data from GSTR-1 of the supplier into GSTR-2 of the buyer.

How does Invoice matching work?

The ITC of purchased services and goods will be available only when the inward supply in the buyer’s GSTR-2 return matches the outward supply of the supplier’s GSTR-1.

In other words, the auto-population of the data happens here from both the supplier’s GSTR-1 and buyer’s GSTR-2.

So, if they don’t match then the buyer cannot claim ITC of paid taxes of the purchased goods or services.

If you make any modifications in the GSTR-2 form, you can see it on the GSTR-1A Form for the supplier.

When the supplier file Form GSTR-3 (Monthly Returns Form) the input credit becomes available and the payment tax should also be considered here.

The input tax credit approved will be notified in the GST MIS-1 Form.

Details to be verified for invoice matching

The details to be matched in the GSTN portal:

  • GSTN of the supplier
  • GSTN of the recipient
  • Invoice/Debit Note number
  • Invoice/Debit Note date
  • Taxable value
  • Tax amount

We have come to an end of this post on invoice matching under GST. Let us know about your queries in the comment section below.