A reconciliation statement in Form GSTR 9C is required to be prepared to reconcile the difference in the value of supplies declared in the annual return with the audited annual financial statement, which can occur due to:

• The difference in data reflected in GSTR 2A with one’s books of accounts. GSTR 2A is a statement that compiles data relating to all inward supplies through the auto-population from multiple suppliers’ returns filed in GSTR-1, GSTR-5, GSTR-6, GSTR-7, GSTR-8.
• The difference in data reflected in GSTR 1 and GSTR 3B.
• The difference in ITC credit available as per auto-populated GSTR 2B and one’s books of accounts.

1. Proportion of goods and services used for exempted supply,
2. Proportion of goods and services used for other than business purpose,
3. motor vehicle having seating capacity of up to 13 persons (including driver). However, if they are used for further supply, as such, or used for transportation of passengers or used for imparting training on driving vehicles, the ITC is allowed.
4. Vessels and aircraft. However, if they are used for making further supply, as such, or are used for transportation of passengers or for imparting training on navigating such vessels or imparting training on flying such aircraft or for transportation of goods, the ITC is allowed.
5. General insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft as referred here in point no.3 & 4. However, if these services are used for the purposes mentioned in the said points, the ITC is allowed. These services are also eligible for credit if the taxable person receiving the service is engaged in the manufacture of such motor vehicles, vessels, aircraft. These services are also eligible for credit if the taxable person receiving such service is in the service of supply of general insurance in respect of such motor vehicles, vessels or aircraft insured by him.
6. Food and beverages
7. Outdoor catering
8. Beauty treatment
9. Health services
10. Cosmetic and plastic surgery
11. Leasing, renting or hiring of motor vehicles, vessels or aircraft as referred here in above point no. 3 & 4 except when used for the purposes specified therein
12. Life insurance and health insurance:
However, if these goods and services are used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply ITC is allowed
13. Membership of a club, health and fitness centre
14. Travel benefits extended to employees on vacation such as leave or home travel concession. However, if the same is obligatory for an employer to provide the same to its employees under any law for the time being in force, ITC is allowed.
15. Works contract services when supplied for construction of an immovable property. However, if this service is used for plant and machinery the ITC is allowed. Also, if this service is an input service for further supply of works contract service ITC is allowed.
16. Goods or services or both on which tax has been paid under composition scheme. In any case, the composite supplier cannot / do not charge GST on his invoice. So, buyer should not apply back working method to bring out the GST component from the invoice value to take credit. This is not permitted.
17. Goods or services or both received by a non-resident taxable person except on goods imported by him
18. Goods or services or both used for personal consumption
19. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples
20. Any tax paid u/s 74 i.e. tax paid on account of tax not paid, short paid, erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilfull-misstatement or suppression of facts is not eligible for ITC.
21. Any tax paid u/s 129 i.e. tax paid on account of detention, seizure and release of goods and conveyances in transit is not eligible for ITC.
22. Any tax paid u/s 130 i.e. tax paid on account of confiscation of goods or conveyances and levy of penalty is not eligible for ITC.

1. Motor vehicles used for transportation of passengers having capacity of 13 or less than 13 persons (including the driver).
2. Where a service of general insurance, servicing, repairs and maintenance is used for vehicles / vessels or aircraft mentioned above.
3. Supply of food, beverages, outdoor catering, beauty treatment, health treatment, cosmetic and plastic surgery, rent-a-cab, life insurance and health insurance
4. Membership fees paid for a club, health or fitness center
5. In case where travel benefits like leave travel concession or home travel concession are provided to employees.
6. ITC on works contract service used for construction of immovable property.
7. Goods or services received for construction of immovable property on his own account
8. Construction includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property.
9. Goods or services or both on which tax has been paid under section 10 i.e. composition scheme
10. Goods or services or both received by a non-resident taxable person
11. Goods or services or both used for personal consumption
12. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.
13. Goods and services received by a taxable person for construction of an immovable property on his own account, other than plant and machinery, even when used in the furtherance of business
14. Goods and services on which tax has been paid under composition scheme
15. Goods and services used for personal consumption
16. Goods lost, stolen, written off or disposed by way of gift or free samples
17. Tax paid after detection of fraud, wilful misstatement or suppression
18. Tax paid for release of detained or seized goods
19. Tax paid for release of confiscated goods