Reconciliation is the heart of GSTR-9 and GSTR-9C annual returns, it validates that your monthly filings align with your books of accounts and creates transparency around Input Tax Credit. However, even with accurate filing throughout the year, you’ll encounter structural differences between various tables that seem like they should match but don’t.
The most common source of confusion for FY 2024-25: Why doesn’t Table 7J of GSTR-9 match Table 4C of GSTR-3B? Understanding these built-in differences, versus actual errors, is crucial for confident annual return filing and audit defense. This comprehensive guide explains the reconciliation framework, identifies legitimate structural differences, and provides strategies for handling and documenting unreconciled amounts.
The GSTR-9 Reconciliation Framework
GSTR-9 creates multiple reconciliation checkpoints designed to validate data accuracy:
Primary Reconciliation Points
Tables 4 & 5 vs. GSTR-1: Outward supplies reconciliation
Table 6 vs. GSTR-3B Table 4A: ITC claimed reconciliation
Table 7 vs. GSTR-3B Table 4B: ITC reversed reconciliation
Table 7J vs. GSTR-3B Table 4C: Net ITC reconciliation
Table 8A vs. GSTR-2B: Available ITC reconciliation
Table 9 vs. GSTR-3B: Tax paid reconciliation
Each reconciliation serves a specific purpose, but they’re interconnected, an issue in one area often cascades through others.
The GSTR-9C Layer
For taxpayers with turnover exceeding ₹5 crores (now ₹10 crores from FY 2024-25), GSTR-9C adds another reconciliation layer:
Table 12 (GSTR-9C): Reconciles ITC as per audited financials vs. GSTR-9
Table 13 (GSTR-9C): Explanations for unreconciled differences
This auditor-certified reconciliation provides deeper validation but also introduces complexity around accounting methodologies and timing differences.
Why Table 7J Doesn’t Match Table 4C: The Core Issue
This is the most frequently asked reconciliation question for FY 2024-25. Let’s break down why these tables legitimately differ.
What Each Table Represents
Table 4C of GSTR-3B (sum for entire FY):
- Total ITC claimed minus total ITC reversed
- Includes ITC of all financial years reported during FY 2024-25
- Includes preceding FY ITC claimed in current FY
- Includes preceding FY ITC reversed in current FY
Table 7J of GSTR-9:
- Net ITC pertaining to current FY (2024-25) only
- Calculated as: Table 6I (sum of 6B to 6H) minus Table 7I (sum of 7A to 7H)
- Specifically excludes preceding FY transactions reported in current FY
The Structural Difference: Preceding Year ITC
The fundamental reason Table 7J ≠ Table 4C is the treatment of preceding financial year ITC claimed or reversed during FY 2024-25.
Table 4C includes:
- FY 2024-25 ITC claimed in FY 2024-25
- FY 2023-24 ITC claimed in FY 2024-25
- FY 2024-25 ITC reversed in FY 2024-25
- FY 2023-24 ITC reversed in FY 2024-25
Table 7J includes:
- FY 2024-25 ITC claimed in FY 2024-25 (from Tables 6B-6H)
- FY 2024-25 ITC reversed in FY 2024-25 (from Tables 7A-7H)
- Excludes all FY 2023-24 transactions
Example Demonstrating the Difference
Your ITC Transactions for FY 2024-25:
- April 2024: Claimed ₹10,00,000 ITC on FY 2024-25 invoices
- May 2024: Claimed ₹2,00,000 ITC on missed FY 2023-24 invoices
- June 2024: Reversed ₹1,50,000 ITC (FY 2024-25 invoices—non-payment Rule 37)
- July 2024: Reversed ₹50,000 ITC (FY 2023-24 invoice—found ineligible)
- Throughout FY: Claimed total ₹90,00,000 ITC on FY 2024-25 invoices
Table 4C Calculation (sum of all monthly GSTR-3B):
- Total claimed: ₹90,00,000 (current FY) + ₹2,00,000 (preceding FY) = ₹92,00,000
- Total reversed: ₹1,50,000 (current FY) + ₹50,000 (preceding FY) = ₹2,00,000
- Table 4C Net ITC: ₹92,00,000 – ₹2,00,000 = ₹90,00,000
Table 7J Calculation (GSTR-9):
- Table 6A: ₹92,00,000 (includes both current and preceding FY claims)
- Table 6A1: ₹2,00,000 (preceding FY claimed in current FY)
- Table 6A2: ₹90,00,000 (current FY only)
- Table 6I: ₹90,00,000 (bifurcation of 6A2 into 6B-6H)
- Table 7I: ₹1,50,000 (only current FY reversals | excludes the ₹50,000 from FY 2023-24)
- Table 7J: ₹90,00,000 – ₹1,50,000 = ₹88,50,000
Difference: Table 4C (₹90,00,000) – Table 7J (₹88,50,000) = ₹1,50,000
Why the difference exists:
- Table 4C includes net effect of preceding FY: +₹2,00,000 claimed – ₹50,000 reversed = +₹1,50,000
- Table 7J completely excludes preceding FY transactions
- Difference = Preceding FY net ITC reported in current FY
This Difference Is By Design, Not Error
The separation of preceding year ITC in Table 6A1 (and exclusion from Table 7) is a deliberate design improvement for FY 2024-25. It prevents the reconciliation nightmares that occurred in earlier years when current and preceding FY transactions were mixed together.
Key Takeaway: If your Table 7J differs from Table 4C by an amount that equals your preceding FY ITC net activity (Table 6A1 minus any preceding FY reversals), this is expected and correct.
ITC Reversal Mismatches: Table 7 vs. GSTR-3B Table 4B
Another common reconciliation issue involves ITC reversals.
What Should Match (But May Not)
In theory: Sum of GSTR-3B Table 4B for entire FY should equal GSTR-9 Table 7I (sum of 7A to 7H).
In practice: These often differ due to preceding year reversals.
The Preceding Year Reversal Issue
Scenario: You reversed FY 2023-24 ITC during FY 2024-25.
GSTR-3B Treatment:
- Reversal appears in Table 4B2 of the month you reversed it
- Contributes to annual sum of Table 4B
GSTR-9 Treatment:
- Does NOT appear in Table 7 (which only captures current FY reversals)
- Does NOT appear in Table 6A1 (which is for claims, not reversals)
- Essentially “invisible” in GSTR-9 structure
Example: Reversal Mismatch
Facts for FY 2024-25:
- Reversed ₹5,00,000 ITC pertaining to FY 2024-25 invoices (various reasons)
- Reversed ₹1,00,000 ITC pertaining to FY 2023-24 invoices (found ineligible)
GSTR-3B Table 4B (annual sum):
- ₹5,00,000 + ₹1,00,000 = ₹6,00,000
GSTR-9 Table 7I:
- Only current FY reversals: ₹5,00,000
Difference: ₹1,00,000 (the preceding FY reversal)
Is this a problem? No. Document that ₹1,00,000 pertains to FY 2023-24 ITC reversed in FY 2024-25, which is correctly excluded from Table 7 of FY 2024-25 GSTR-9.
Where Does Preceding Year Reversal Get Captured?
It doesn’t appear explicitly in your FY 2024-25 GSTR-9 because:
- Table 6A1 only captures preceding FY claims (not reversals)
- Table 7 only captures current FY reversals
- Table 13 only captures current FY ITC availed in next FY
The reversal was appropriately reflected in your GSTR-3B (reducing your net ITC for that month), but it doesn’t need separate disclosure in the annual return since it doesn’t pertain to the current FY.
Table 8D: Understanding Positive vs. Negative Differences
Table 8D represents the reconciliation between available ITC (Table 8A from GSTR-2B) and claimed ITC (Tables 8B and 8C).
Formula: Table 8D = Table 8A – (Table 8B + Table 8C)
Positive Table 8D (Common and Often Legitimate)
Meaning: More ITC was available in GSTR-2B than you claimed.
Common legitimate reasons:
- Blocked Credits (Section 17(5)):
- Motor vehicles for personal use
- Food and beverages
- Outdoor catering
- Health services, rent-a-cab
- Life insurance, health insurance
- Membership of clubs
- Travel benefits extended to employees
Example: Your GSTR-2B shows ₹50,000 on corporate club membership. You don’t claim it (blocked credit). Table 8A includes ₹50,000, Table 8B doesn’t. Result: Positive Table 8D of ₹50,000.
- Inputs for Exempt Supplies:
- ITC on inputs used for exempt supplies cannot be claimed
- GSTR-2B shows it as available, but you correctly don’t claim it
- Purchases from Composition Dealers:
- Appear in GSTR-2B
- No ITC available on purchases from composition dealers
- Creates legitimate difference
- ITC Not Yet Claimed (Timing):
- Supplier reported in their GSTR-1
- Appeared in your GSTR-2B
- You haven’t claimed yet due to internal processes (goods not received, entry not booked, etc.)
- You may claim in FY 2025-26 (will then appear in Table 8C)
- Deliberate Non-Claim:
- Commercial decision not to claim certain ITC
- Disputed invoices
- Quality issues with supplier
Documentation Required: Maintain a schedule showing:
- Category of non-claim (blocked credit, exempt supply, etc.)
- Amount under each category
- Supporting calculation (especially for reversal under Rule 42/43 for exempt supplies)
Negative Table 8D (Problem | Requires Investigation)
Meaning: You claimed more ITC than what appeared in GSTR-2B.
Possible causes (generally problematic):
- ITC on Ineligible Documents:
- Claimed on invoices from composition dealers (they don’t appear in GSTR-2B)
- Claimed on invoices from unregistered suppliers
- Claimed without proper tax invoice
- Supplier Non-Filing:
- You have invoice, claimed ITC
- Supplier hasn’t filed GSTR-1 yet
- Won’t appear in GSTR-2B until supplier files
- Excess Claim (Error):
- Claimed more than invoice amount
- Double-claimed same invoice
- Calculation error
- Reclaim Reported in Table 8C (addressed in our Table 8C article):
- If you incorrectly reported reclaims in Table 8C, it creates negative 8D
- This is a reporting error, not a claim error
Action Required:
- Investigate each invoice causing the negative difference
- If supplier error (non-filing), follow up for them to file GSTR-1
- If your claim error, reverse excess ITC
- Document findings for audit defense
Example: Mixed Scenario
Your Data for FY 2024-25:
- Table 8A: ₹1,00,00,000 (available from GSTR-2B)
- Table 8B: ₹90,00,000 (claimed in FY 2024-25)
- Table 8C: ₹2,00,000 (missed ITC claimed in FY 2025-26)
Calculation:
- Table 8D = ₹1,00,00,000 – (₹90,00,000 + ₹2,00,000) = ₹8,00,000 (positive)
Analysis:
- ₹3,00,000: Motor vehicles and blocked credits (Section 17(5))
- ₹2,50,000: Inputs for exempt supplies
- ₹1,50,000: Purchases from composition dealers
- ₹1,00,000: Legitimately not yet claimed (will claim later or expire)
Documentation: Prepare Table 8D reconciliation statement with these four categories and supporting schedules.
GSTR-9C Table 12F: Audited Accounts vs. GSTR-9 ITC Reconciliation
GSTR-9C Table 12 creates a three-way reconciliation:
- ITC as per audited books (12A to 12C)
- ITC as per GSTR-9 Table 7J (12E)
- Difference (12F)
Why Table 12F Shows Differences
The fundamental issue: Accounting policies and recognition timing differ from GST reporting requirements.
Common causes of differences:
- Preceding Year ITC Booked in Current Year Books:
- Invoice pertains to FY 2023-24
- Appears in GSTR-2B of FY 2023-24
- Should ideally be booked in FY 2023-24 accounts
- Actually booked in FY 2024-25 accounts (due to late receipt, late entry, etc.)
Impact:
- Table 12A (ITC in books): Includes this amount for FY 2024-25
- Table 12E (auto-populated from Table 7J): Excludes preceding FY ITC
- Creates difference in Table 12F
- Current Year ITC Booked in Preceding Year:
- Invoice pertains to FY 2024-25
- Booked in FY 2023-24 accounts (advance booking, estimation, etc.)
- Actually claimed in GST returns in FY 2024-25
Impact:
- Table 12A for FY 2024-25: Doesn’t include it (was in FY 2023-24 books)
- Table 12E: Includes it (claimed in FY 2024-25)
- Creates difference
- Accounting Method Differences:
- Books may follow invoice date for ITC recognition
- GST follows claim date in GSTR-3B
- Timing differences create reconciliation issues
- Reversal Accounting:
- Books may show net ITC (after all reversals)
- GSTR-9 shows gross claimed and separate reversals
- Presentation difference
- Capital Goods Treatment:
- Books may capitalize GST on capital goods (not showing as ITC expense)
- GSTR-9 shows ITC claimed (including on capital goods)
- Creates large differences if significant capital purchases
Example: Table 12B and Preceding Year Complexity
Scenario:
- Invoice dated March 2024 (FY 2023-24)
- Appeared in GSTR-2B of March 2024
- You claimed ITC in May 2024 GSTR-3B (FY 2024-25), within permitted time
- Goods received in May 2024, so booked in May 2024 accounts (FY 2024-25)
- ITC amount: ₹5,00,000
GSTR-9 Treatment:
- Table 6A1: ₹5,00,000 (preceding FY ITC claimed in current FY)
- Table 7J: Doesn’t include this (preceded by calculation that removes 6A1)
- Table 12E (auto-populated from 7J): ₹5,00,000 NOT included
Accounting Treatment:
- Booked in FY 2024-25 books (May 2024)
- Table 12A (ITC as per books): ₹5,00,000 IS included
Result:
- Table 12A is higher than Table 12E by ₹5,00,000
- Table 12F shows positive difference of ₹5,00,000
Is this wrong? No. It’s a legitimate timing difference between accounting (booking based on receipt) and GST (allowing preceding year claims). This should be explained in Table 13 of GSTR-9C.
The Introduction of Table 12B
GSTR-9C has a specific Table 12B meant to capture “ITC booked in earlier FY and availed/claimed in current FY.”
Purpose: To account for the timing difference described above.
Challenge for FY 2024-25: Due to the redesign of Table 6A1 and exclusion of preceding year ITC from Table 7J, Table 12B may create confusion rather than clarity.
The issue:
- Preceding FY ITC appears in Table 6A1
- But it’s excluded from Table 7J (and therefore Table 12E)
- If it’s booked in current FY accounts, it appears in Table 12A
- Table 12B is meant to bridge this, but the auto-population logic may not work seamlessly
Practical Approach: Use Table 13 (explanations) to clearly document:
- “Difference of ₹X in Table 12F represents ITC pertaining to FY 2023-24, claimed in FY 2024-25 per Table 6A1 of GSTR-9, but booked in FY 2024-25 books as goods were received in FY 2024-25.”
Table 13 of GSTR-9C: The Safety Valve for Unreconciled Differences
Table 13 is where you provide reasons for differences that remain after all structured reconciliation attempts.
What Belongs in Table 13
Any unreconciled difference in:
- Table 12F (ITC reconciliation between books and GSTR-9)
- Table 5F (turnover reconciliation)
- Other material differences that need explanation
How to Draft Effective Table 13 Explanations
Bad Example (vague, unhelpful): “Difference due to accounting adjustments and timing issues.”
Good Example (specific, traceable): “Difference of ₹5,00,000 in Table 12F comprises:
- ₹3,00,000 – ITC pertaining to FY 2023-24 claimed in FY 2024-25 (per Table 6A1 of GSTR-9) but booked in FY 2024-25 accounts as goods received in May 2024. Supporting: Invoice register page nos. 45-52.
- ₹2,00,000 – ITC on capital goods capitalized in books (not expensed as ITC) per AS-10 accounting policy. Supporting: Capital goods register and depreciation schedule.”
Key Elements of Strong Explanations
- Quantification: Break down total difference into specific components
- Root Cause: Explain why each component exists
- Cross-Reference: Point to supporting schedules, registers, or policies
- Reconciliation: Show how the amount traces to specific transactions or categories
- Conclusion: Confirm no actual loss of revenue or over-claim of ITC
Common Categories for Table 13 Explanations
Category 1: Timing Differences
- Preceding year ITC booked in current year
- Current year ITC booked in preceding year
- Accrual vs. cash basis differences
Category 2: Classification Differences
- Capital goods ITC capitalized in books vs. shown in GSTR-9
- Expense vs. capital treatment differences
Category 3: Presentation Differences
- Books show net ITC, GSTR-9 shows gross and reversal separately
- Grouped vs. detailed presentation
Category 4: Preceding Year Adjustments
- FY 2023-24 ITC claimed in FY 2024-25 (Table 6A1 impact)
- Prior period adjustments in books
Non-GST Purchases: Where Do They Appear?
A common question: “Where should I report non-GST purchases in GSTR-9?”
The Clear Answer
There is no specified table for non-GST purchases in GSTR-9. Do not report them anywhere.
What are non-GST purchases?
- Purchases from unregistered dealers (where you don’t pay RCM)
- Purchases of exempt goods/services
- Purchases outside GST scope (petrol, diesel, alcohol)
- Old/used goods from unregistered persons
Why not report?
- GSTR-9 is a GST return, capturing only GST-relevant transactions
- Non-GST purchases don’t involve ITC, so no reconciliation needed
- Including them would distort the reconciliation framework
Where they appear:
- In your books of accounts (purchase register, P&L)
- In GSTR-9C Table 5 (turnover reconciliation) as part of total purchases, but not broken out separately
Audit Note: If auditor questions large difference between book purchases and GSTR-9 ITC, the explanation is non-GST purchases. Maintain a schedule quantifying these for GSTR-9C purposes.
Reconciliation Best Practices for FY 2024-25
1. Maintain Monthly Reconciliation
Don’t wait until annual return time. Every month:
- Reconcile GSTR-1 with sales register
- Reconcile GSTR-2B with purchase register
- Reconcile GSTR-3B ITC claimed with available ITC
- Document differences immediately
Benefit: Issues identified and resolved throughout the year prevent year-end crises.
2. Separate Preceding Year Transactions
From April 2024 onwards, flag every ITC claim or reversal that pertains to FY 2023-24:
- Maintain separate column in ITC register
- Calculate running total of Table 6A1 amount
- Track preceding year reversals separately
Benefit: When filing GSTR-9, you immediately know your Table 6A1 amount and can explain Table 7J vs. Table 4C difference.
3. Create a Table 8D Reconciliation Schedule
Throughout the year, categorize ITC available in GSTR-2B but not claimed:
- Blocked credits (Section 17(5))
- Exempt supply inputs
- Composition dealer purchases
- Deliberate non-claims with reasons
Benefit: Table 8D explanation is ready when filing GSTR-9; no scrambling to explain differences.
4. Align Accounting and GST Recognition
Work with your accounts team to:
- Book ITC in the same FY as GST claim (where possible)
- If timing differences unavoidable, document them contemporaneously
- Maintain a bridge schedule between book ITC and GST ITC
Benefit: Minimizes Table 12F differences in GSTR-9C, reduces audit queries.
5. Prepare Table 13 Explanations
As differences arise throughout the year, draft explanation notes:
- Don’t rely on memory 8-10 months later
- Attach supporting documents at time of transaction
- Update the explanation file monthly
Benefit: Table 13 becomes a compilation exercise, not a research project.
6. Quarterly Review Meetings
Conduct quarterly reconciliation reviews involving:
- Accounts team (book entries)
- GST compliance team (return filing)
- Operations team (understanding transaction nature)
Agenda:
- Review cumulative differences to date
- Identify trends or systematic issues
- Implement corrective measures
Benefit: Issues caught quarterly are easier to fix than issues discovered after year-end.
Common Misconceptions About Reconciliation
Misconception 1: “All GSTR-9 tables should match GSTR-3B”
Reality: Several tables deliberately differ due to:
- Exclusion of preceding year transactions from certain GSTR-9 tables
- Different bases (GSTR-2B vs. GSTR-3B vs. books)
- Designed-in differences for clarity
Action: Understand which differences are structural vs. which indicate errors.
Misconception 2: “Zero difference is always the goal”
Reality: Some positive differences are legitimate and expected:
- Blocked credits in Table 8D
- Timing differences in Table 12F
- Pending claims within time limits
Action: Focus on explaining differences, not eliminating all differences.
Misconception 3: “Table 13 is for hiding problems”
Reality: Table 13 is a transparency mechanism:
- Acknowledges differences exist
- Provides clear explanations
- Demonstrates you understand your numbers
Action: Use Table 13 proactively to demonstrate control over your compliance.
Misconception 4: “GSTR-9C reconciliation should match penny-to-penny”
Reality: Accounting policies legitimately differ from GST reporting:
- Capitalization vs. expensing
- Accrual vs. cash basis
- Timing of recognition
Action: Document accounting policies and explain variances systematically.
Handling Department Queries on Reconciliation Differences
When the department raises queries about reconciliation differences:
Step 1: Classify the Query
Is it about:
- Structural difference (Table 7J vs. 4C)?
- Legitimate business difference (blocked credits)?
- Actual error or over-claim?
Step 2: Prepare Structured Response
For Structural Differences: “The difference of ₹X between Table 7J (₹Y) and GSTR-3B Table 4C (₹Z) for FY 2024-25 represents preceding FY ITC net activity (₹A claimed per Table 6A1, minus ₹B reversed pertaining to FY 2023-24). This is due to the design of GSTR-9 which excludes preceding FY transactions from Table 7J calculation. Detailed workings attached as Annexure A.”
For Legitimate Business Differences: “Table 8D shows positive difference of ₹X, comprising:
- Blocked credits (Section 17(5)): ₹A – Schedule 1 attached
- Inputs for exempt supplies: ₹B – Rule 42 calculation attached as Schedule 2
- Composition dealer purchases: ₹C – Supplier list attached as Schedule 3 Total: ₹A + ₹B + ₹C = ₹X No ITC has been claimed on these categories. GSTR-2B inclusion is automatic based on supplier filings.”
For Actual Errors: “Upon review, we identified ₹X was overclaimed in Month GSTR-3B. This has been reversed in Month+n GSTR-3B (copy attached). Interest of ₹Y has been paid (challan attached). The error occurred due to [specific reason]. Corrective measures implemented: [process changes].”
Step 3: Provide Supporting Evidence
Attach:
- Excel reconciliation workings
- Relevant extracts from GSTR-2B, GSTR-3B
- Supporting invoices or registers
- Accounting policy extracts (for GSTR-9C queries)
- Reversal GSTR-3B and payment challans (if error admitted)
Step 4: Professional Response
- Acknowledge the query
- Thank for the opportunity to clarify
- Present facts objectively
- Avoid defensive or aggressive language
- Demonstrate compliance intent
Conclusion
Reconciliation in GSTR-9 and GSTR-9C is not about achieving zero differences across all tables—it’s about understanding, documenting, and explaining the differences that exist. The redesign of GSTR-9 for FY 2024-25, particularly the introduction of Table 6A1, creates structural differences that are by design, not by error.
Key takeaways for successful reconciliation:
- Table 7J will legitimately differ from Table 4C due to preceding year ITC treatment—quantify and explain the difference
- Positive Table 8D is normal when you have blocked credits or exempt supplies, maintain categorized schedules
- Table 12F in GSTR-9C reflects accounting vs. GST timing differences, use Table 13 to explain clearly
- Preceding year ITC reversals don’t appear in Table 7 but do affect Table 4C, document these separately
- Monthly reconciliation throughout the year prevents year-end surprises and enables confident filing
By implementing robust reconciliation processes, maintaining contemporaneous documentation, and preparing clear explanations for legitimate differences, you transform GSTR-9/9C from a compliance burden into a demonstration of your organization’s control environment and transparency.
Next in series: Understanding imports, RCM, and special cases—how to correctly report import IGST in Tables 8G and 8H1, handle RCM paid in next FY, and complete Table 4G1 for e-commerce operators under Section 9(5).
Reference:
GSTN’s Consolidated FAǪs on GSTR 9/9C for the FY 2024-25 dated 17/12/2025