pri Conflict between GSTR-3B & GSTR-2B Conflict between GSTR-3B & GSTR-2B

Hope you all know very well that, in Goods and Services Tax Act, 2017 there are 2 types of returns to be filed regularly by most of the registered persons. They are GSTR-1 (declaration of invoice wise sales information etc.,) & GSTR-3B (Summary of Sales, GST payable & Input tax credit etc.). Recently, goods and services tax portal has come up with a new facility of System generated GSTR-3B summary based on the inputs given by us in our GSTR-1 returns (our sales) and by our suppliers in their GSTR 1 returns (our purchases) – it will ultimately reflect as auto-drafted input tax credit information in our GSTR-2B. Therefore our GSTR 1 & GSTR-2B (i.e. our suppliers GSTR 1 information auto-populated) are the prima facie documents for GSTR-3B System generated summary.

Its main agenda is to avoid unnecessary errors that could arise while filing the GSTR-3B returns viz.

1. Undue or excess claim of input tax credit

2. Undue or excess reduction of output tax liability

3. Wrong declaration of taxable value than actually declared in GSTR-1 etc.

So everything seems to be fine, then what is all about the conflict between GSTR-3B & GSTR-2B -may be the question hitting your mind.

The Conflict is all about the inward supplies under Reverse charge mechanism (RCM). As mentioned above, if a figure needs to be shown in the GSTR-3B System generated summary, it should have been initially declared in our GSTR 1 & GSTR-2B (i.e. from Suppliers GSTR 1). So, for auto-population of RCM Supplies also it requires the same process. But where to declare the invoice wise Inwards supplies under RCM is a million dollar question?

In fact GSTR-2 is the return to be used to declare all the inward supplies of a registered person but it is deferred since 2017 & also till date there is no alternative option given by the department either in GSTR-1 return or in any other separate format to declare the same. Then how the information of RCM will get auto-populated in GSTR-2B& from there to system generated GSTR-3B summary?

You may ask,“System generated GSTR-3B is an abstract & why can’t you edit the GSTR-3B and feed the required data?” If I do so, the portal is showing that “the input tax credit/reverse charge liability has been auto-populated on the basis of GSTR-2B generated for you. The Variance above 10% in the input tax credit in contravention to the rule 36(4) of CGST rules, 2017.” However as per my view the said rule is purely deals with the eligible input tax credit out of overall ITC that every registered person getting via GSTR-2A & GSTR-2B and is completely in the hands of suppliers.

In this situation, how will you expect any registered person to fulfill the eligibility criteria without giving a way to fulfilling it? Even though it is not the fault of registered persons, in future it will unnecessarily create hindrance for them by means of notice from the commercial tax department regarding contravention of the aforesaid provision. So I herewith request CBIC & GST Council to provide option to declare inward supplies under RCM either in GSTR-1 itself or by means of any separate format.

separate format

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Qualification: Student - CA/CS/CMA
Company: Akshaya Industrie
Location: Rajapalayam, Tamil Nadu, India
Member Since: 29 Nov 2017 | Total Posts: 4
A CA Student. Proud Indian. A good son for My parents. A genuine Taxpayer and law Abiding Citizen. View Full Profile

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July 2021