Input Tax Credit under GST: With the help of the GSTR-2A and GSTR-2B, the individual reconcile its purchase invoice with availability of Input Tax Credit (ITC) reflecting in GSTR-2A & GSTR-2B before filling the GSTR-3B. For this purpose we need to understand both GSTR-2A & 2B and their difference.
What is GSTR-2A and GSTR-2B?
GSTR-2A is a detail of auto drafted input supplies. As soon as seller files his GSTR-1, the information of his GSTR-1 is used to auto draft the supplies of products and/or services which were acquired during the respective month. Whereas, GSTR-2B is a new static month-by-month auto drafted ITC (Input Tax Credit) Statement. It shows each month’s eligible and ineligible Input Tax Credit.
Furthermore, GSTR-2A doesn’t provide Bifurcation between eligible, ineligible Input Tax Credit and GSTR-2B provides Bifurcation between the both.
Cut Off Date
‘Cut off Date’ means the date on which the GSTR-2A and GSTR-2B is available on the GST Portal. GSTR-2A is available on the portal throughout and GSTR-2B cutoff date is 13th of the succeeding month depending upon the type of return the supplier files.
GSTR-2A is a dynamic form of statement i.e., the details of inward tax credit continuously keeps on changing, when the supplier uploads the documents/information. Whereas GSTR-2B is a static statement and don’t change with supplier activities. In other words, if the supplier files return of any previous month, then it will be reflected in the ITC of GSTR-2A for the month it is filed i.e., on real time basis and in case of GSTR-2B it will be reflected in the particular month in which it is filed. To understand it better, for instance, GSTR-1 of June, 2022 was filed in the month of August 2022 by the supplier; the respective supplies in his GSTR-1 will be reflected in GSTR-2A for the month of June, 2022 and in GSTR-2B for the month of August, 2022.
Data Source of 2A and 2B
The information provide to an individual in GSTR-2A is obtained from:
- GSTR-1/IFF ,
- GSTR-5 (return to be filed by a Non Resident),
- GSTR-6 (return to be filed by Input Service Distributors),
- GSTR-7 (return to be filed by Tax Deductor at Source),
- GSTR-8 (return to be filed by an E-commerce operator liable to collect Tax at Source),
- details of import of goods and inward supply of goods from SEZ units/developers.
On the other hand, the details of GSTR-2B are obtained from:
- GSTR-1/IFF (Invoice Furnishing Facility),
- GSTR-5 (Non Resident),
- GSTR-6 (Input Service Distributors) and
- import data received from ICEGATE (Indian Customs & Central Excise Electronic Commerce/ Electronic Data Interchange Gateway, EC/EDI).
Post login mode on GST Portal go to Services > Returns > Return Dashboard > File Returns > GSTR-2B/GSTR-2A > Download for the relevant Tax period.
GSTR2A and GSTR2B Reconciliation
As per our above discussion of difference between GSTR-2A & GSTR-2B, we can conclude that there is not much difference between both of them. The main purpose of both of them is to provide the details of Inward supplies of an entity from different source. However, reconciliation of both of them is an important aspect.
- Government Notice: GST (Goods & services Tax) authorities send notice to the individuals/business in case the ITC of GSTR-2A, GSTR-2B & GSTR-3B doesn’t reconcile. The individual within seven days is supposed to correct the mistake or present the relevant documents for justification or else, he will be liable to pay difference plus interest.
- Ineligible for ITC: The business/ individual become ineligible for the ITC, if GST returns are not filed at right time. Further they are liable to pay interest on the total tax amount payable under GST Act. This will have a substantial impact on all enterprises that use input and raw material tax credits to minimize the amount of tax they must pay. As they won’t be able to use the ITC of the purchases made with the particular individual/business.
Difference between GSTR-2A & GSTR-2B
|It Reflects Invoices of Particular Month which are uploaded by Counter Party in their GST Return||It Reflects Invoices of that suppliers who have filed their GST Returns between Particular Period of due dates|
|It is Dynamic, which means it is constantly changing. The details of inward supplies and input tax credit will be updated on a continuous basis whenever counterparty Files/Saves their GST Return data.||It is Static, which means after generation there will be no changes. So, it is easy to keep track of all invoices reflected in GSTR-2B|
|GSTR-2A Reflects Invoices Summary on real time of GSTR-1: Saved/filed/submitted, GSTR6: Submitted, GSTR-7 and GSTR-8: Filed||Form GSTR-2B reflect the details of outward supplies reflected by the supplier between due dates of either Filled GSTR-1 or Invoice Furnishing Facility, GSTR-5, or GSTR-6|
|GSTR-2A have both Saved and Filed Invoices||GSTR-2A have both Saved and Filed Invoices|
|GSTR-2A will be updated on Real-Time Basis which Such Invoice dates belong to GSTR-2A and have Search option.||GSTR-2B will be generated on the 14th of Next Month for Previous Month|
|Form GSTR-2A doesn’t provide bifurcation of eligible input tax credit and ineligible input tax credit.||Form GSTR-2B briefly bifurcates the eligible and ineligible input tax credit.|
How to Claim Input Tax Credit under GST?
Now, an individual is eligible for claiming Input Tax Credit on GST in respect of invoices/ debit notes that are reflected by the supplier in Form GSTR-1 or invoice furnishing facility, as per rule 36(4) of the Central Goods and Services Tax (GST) Rules, 2017. In the light of the above provision of rule 36(4), the main question arises, on whose basis should ITC be claimed, GSTR-2A or GSTR-2B?
GSTR-2B is a static statement and guides document-wise information such as credit notes, invoices, and debit notes. GSTR-2B provides a summary of ITC on the date of its generation and is divided into ITC that can be availed, ITC reversal, ITC not available, ITC to be reversed. Notably, the GST (Goods and Service Tax) system is currently auto-reflecting ITC (Input Tax Credit) values in Form GSTR-3B as per Form GSTR-2B.
It is recommended that individuals reconcile the data provided in GSTR-2B with their own records and books of accounts. They must make certain that:
- Particulars Input Tax Credit is not availed twice.
- There is no mismatch in GSTR-2B &GSTR-3B, in case there is proper documentation is maintained.
- The Input Tax Credit that is availed in GSTR-3B should be reflecting in GSTR-2B in eligible ITC and in compliance section 16 (Basis Conditions for availment of ITC) of GST Act.
- The ITC availed is not a block ITC as per Section 17 (Block ITC) of GST Act.
- The ITC availed should not be more than the ITC appeared in GSTR-2B & the payment against those purchase invoice should have been made earlier.
- ITC belonging to a particular financial year towards purchase invoices or debit note raised in that financial year must be availed before a deadline under the GST. It is earlier of the due date of filing GSTR-3B for September of the year following that financial year or GST Annual return filing date.
- GST is correctly levied on a rebate basis for the applicable documents, including import of services.
Matching of ITC with Books:
The GST portal provides an option for taxpayers to match their purchase books with the GSTR-2B form known as the Offline Matching Tool. It is critical that you add data and import it into the tool in the same format as given on the GST portal. Otherwise, the tool will produce an error, and you will be unable to continue matching GSTR-2B records with the purchase books. The reconciliation between GSTR-2B and the purchase is recommended to be done after the 14th of the following month. Following could be the cases of mismatches between GSTR-2B and purchase books:
- Period of Invoice might be different in both
- Debit/ Credit Note might not be recorded.
- The supplier has not filed or missed invoice while filing GSTR-1.
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