Can you reconcile physical stock to the books at the end of every month?
Noida's manufacturing and warehousing base makes inventory the defining feature of the monthly close, and inventory carries a tax consequence most businesses do not associate with it. Goods not accounted for can be treated as having been supplied and taxed accordingly, with penalty provisions applying, so an unexplained stock difference is not a housekeeping problem to be resolved at year end. It is an exposure that grows the longer it goes unreconciled.
Item masters with unit conversions, raw material and finished goods valuation, work in progress, job work sent and received, scrap, and multi-location stock across manufacturing and warehousing premises. Many businesses also carry a second GSTIN held purely because stock sits in a local facility for an entity headquartered elsewhere.
Monthly stock reconciliation is the discipline this belt needs most and practises least. Physical stock reconciled to book stock every month, differences investigated while the transactions are recent enough to explain, and job work movements tracked rather than assumed. Businesses that reconcile annually discover a difference in March that could have come from any of twelve months, cannot explain it, and write it off. The write-off is the smaller cost. The larger one is that unaccounted goods can be deemed supplied, and an inspection during a period of unreconciled stock is a difficult conversation with no documentation behind it.
Uttar Pradesh does not levy professional tax, so the monthly payroll cycle covers PF and ESI without a PT component for Noida-based staff.
The reason this stopped being a matter of tidiness is that reconciliation moved upstream of the return. Auto-populated outward liability in GSTR-3B has been non-editable since the July 2025 tax period and Table 3.2 has been system-locked since the November 2025 period, so a mistake in GSTR-1 is corrected through GSTR-1A before you file rather than adjusted afterwards. The Invoice Management System treats inaction on an inward invoice as acceptance, so input credit is settled by what happened during the month. And a GSTR-3B cannot be filed more than three years after its due date, so an old backlog is a shrinking asset rather than a static problem. The month is now where compliance is decided, and the return only reports it.
| Item | Position as at August 2026 |
|---|---|
| Who must keep books, individuals and HUF | Income above Rs 2,50,000 or turnover above Rs 25 lakh in any of the 3 preceding years |
| Who must keep books, others | Income above Rs 1,20,000 or turnover above Rs 10 lakh, on the same test |
| Governing provision | Section 62 of the Income-tax Act, 2025, which carries forward the old section 44AA |
| Penalty for not keeping them | Rs 25,000 under section 441 of the Income-tax Act, 2025 |
| Electronic books | Rule 46(8) of the Income-tax Rules, 2026 requires a daily backup on servers located in India |
| Retention, income tax | Seven tax years from the end of the relevant tax year, under Rule 46(9) |
| Retention, Companies Act | Eight financial years, section 128(5). The longest applicable period governs |
| Retention, GST | 72 months from the due date of the annual return, extended during proceedings |
| GST edit log | Rule 56(8). Required for electronic records, every registered person, since 2017 |
| Company audit trail | Rule 3(1), Companies (Accounts) Rules 2014, financial years from 1 April 2023 |
| GSTR-3B outward liability | Auto-populated and non-editable since the July 2025 tax period |
| MSME creditors | Deduction deferred until paid where a micro or small supplier is paid late |
| Plan | Fee | Built for |
|---|---|---|
| Essential | Rs 2,499 a month | Up to 100 transactions a month, one GSTIN |
| Growth | Rs 6,999 a month | Up to 400 transactions, up to three GSTINs |
| Controller | Rs 17,999 a month | High volume, multi-state, or reporting to outsiders |
| Backlog clean-up | From Rs 9,999 | Prior periods rebuilt, sequenced oldest first |
| Books health check | Rs 4,999 | Written diagnosis, credited against the first retainer |
Priced on transaction volume and the number of GSTINs rather than on turnover, because that is what actually drives the work.
Every price above is a professional fee, excluding GST and government charges. 50% on delivery.
All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.
Monthly, as part of the close. The reason is not tidiness. Goods not accounted for can be treated as supplied and taxed with penalties applying, so an unexplained difference is a live exposure. Reconciling monthly means differences are investigated while the transactions are recent enough to be explained. Reconciling annually means finding a difference in March that could have arisen in any of twelve months and cannot be traced.
As a stock movement rather than a sale, with the material remaining yours and the return tracked against what was sent, within the timelines the GST framework prescribes. Job work is where manufacturing stock records most often break down, because material physically leaves the premises and the books stop following it. It needs recording at despatch and matched on return, every month.
Yes. Every GSTIN files its own GSTR-1 and GSTR-3B monthly, whether or not it generated sales in the period, and it has its own IMS position and its own stock records for goods held there. A registration that feels dormant operationally is not dormant for compliance, and neglected registrations run into the three-year rule after which the period can no longer be filed at all.
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Reviewed by the CA and CS Team, CorporateWalla · Last updated 17 August 2026 · · Sources: GST portal, Income Tax Department, Ministry of Corporate Affairs, Udyam Registration portal
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