GST reconciliation involves matching of sales and purchases data between different returns as well as sales and purchase registers.
Reconciliation or matching sales and purchases details with returns are not new to any taxpayer. This has been prevalent in earlier VAT and excise regime too. During the pre-GST regime, the matching of data was comparatively easier task for many business organisations, due to the familiarity and lower penal implications. If the tax department found some discrepancy on processing regular returns or annual return filing, only then would communications be sent to the taxpayer. Accordingly, further scrutiny and audits would be carried out by the authorities.