We all have got an abundance of opportunities to enhance our skills in this pandemic. GSTN also has taken due benefit of the same by adding new functionalities on the portal, most prominent being enabling of form GSTR 2B. In the 39th Council meeting held on 14.03.2020, Shri Nandan Nilekani addressed the system related issues that are being faced by the taxpayers. Addressing the difficulty in compliance and tax evasion, it was suggested to link ITC in FORM GSTR 3B to the details of the supplies reflected in the FORM GSTR-2A. However, a new statement all together has come out as GSTR 2B, data of which would be auto-populated in Table 4 of GSTR 3B.
Pertinently, GSTR-2B is made functional for July 2020 on a trial run however, for the subsequent tax periods the same could be fully operational. While referring to the provisions of law, it is imperative to note that the law does not provide any legal sanction to facilitate GSTR-2B. However, considering that the statement is appearing on the portal, for the time being, an effort has been to discuss the same in this article.
On a bird’s eye view, the statement appears to address and curb the difficulty posed before the taxpayers in complying with Rule 36(4) of the CGST Act 2017 w.r.t. availment of credit and challenges therein.
The above-mentioned points are detailed below for a deeper understanding of the subject –
Advisory provided on the common portal states the following:
a. GSTR-2B is an auto-drafted ITC statement generated for every registered person (other than composition dealer) based on GSTR-1, 5 (non-resident taxable person), and 6 (input service distributor) filed by supplier.
b. GSTR-2B is a static statement available for each month on the 12th of the succeeding month. E.g.: August 2020 statement available on 12th September 2020.
c. GSTR-2B for a month (M) contains all documents filed by suppliers between the due date of furnishing of GSTR-1 for the previous month (M-1) to the due date of furnishing of GSTR-1 for the current month (M). E.g. for July 2020, documents filed by suppliers from 00:00 hours on 12th July 2020 to 23:59 hours on 11th August 2020.
d. Instances where the return due date is later than the date of generation of GSTR 2B, it is advised to avail ITC on a self-assessment basis.
e. The documents would reflect in the next open GSTR-2B of the recipient irrespective of the date of the document. E.g. INV-1 dated 15.05.2020 uploaded in July 2020 return filed on 11th August 2020, it would be reflected in GSTR 2B of July 2020 generated on 12th August 2020 and not in GSTR 2B of May 2020.
GSTR 2B would be viewed on common portal – Return Dashboard> Select Return period> GSTR 2B View / Download
Following are the benefits to view GSTR 2B before availment of ITC in GSTR 3B.
a. Summary report for ITC available and not available* for the month helps the management to have an overview of ITC for the month.
b. Data of ICEGATE available relating to the import of goods from overseas and inward supplies from SEZ to ensure ITC has not been missed out.
c. Repetitive download of the previous month data would not be required as in GSTR 2A.
d. A clear picture of ITC to be availed for the period.
e. Reconciliation of ITC ledger and invoice details uploaded in GSTR 1 by the supplier (Rule 36(4))
f. Rule 36(4) reconciliation would not be required to be performed on year to date basis every month as the GSTR 2B report is static. Although, from October 2019 to June 2020 YTD reconciliation may be required.
g. This new statement would help clarify whether vendors are compliant or non-compliant, and helps in vendor categorization and determining payment terms. (basic + tax on GSTR 2B reflection)
*Table 4 explained in “Detailed understanding of each table in GSTR 2B” provides details for ITC not available
|Particular||GSTR 2B||GSTR 2A|
|Nature||Static – Details uploaded by vendors after the cut-off date considered in the subsequent period.||Dynamic – Details uploaded by vendors are updating to such a month without utilizing a cut-off date.|
|Entries from return||GSTR 1, GSTR 5, GSTR 6, ICEGATE system – Would not provide TDS & TCS deductions.||GSTR 1, GSTR 5, GSTR 6, GSTR 7, GSTR 8, ICEGATE system – BoE details recently updated.|
|Utility||Very useful in ITC reconciliations (especially Rule 36(4)), and to identify compliant/non-compliant vendors.||Very difficult to ensure all GSTR 2A credits are considered as vendors may delay filing returns.|
|Features||Online portal has various features listed subsequently.||Not available|
a. Documents more than 1000 count:
i. If the total number of documents across all tables is more than 1000 documents, then the download button will be disabled in view mode. However, a view of a specific document could be possible if GSTIN number, Invoice Number, and Invoice Date is entered. (in Return Dashboard>Select Tax Period >GSTR 2B View> Summary/ALL Tables).
ii. In such a case, taxpayers may download the excel/JSON from the GSTR-2B download page, by using the link given in the information message below the summary table.
b. Data available: Summary level data, vendor level data, and invoice level data would be available for view on the portal and download in excel also.
i. Expand/collapse all the sections available in the GSTR-2B summary in view mode.
ii. By default, all the sections in the GSTR-2B summary are in collapse mode.
iii. After expanding any section one can click on any subsection and if record available would reach to invoice level data.
d. Display/Hide column in view mode: A specific column can be hidden or displayed on the portal which could be helpful for further analysis.
e. Record per page – User may fix the number of records per page which. Max 100.
f. Filter option: The filter option available at document wise view option can be used to filter based on the following and even data can be downloaded after filtered.
i. Invoice/Note/ISD Document date/Bill of entry Date,
ii. Note Type: Credit note and Debit note
iii. Invoice type/Note Supply type – Regular, Deemed Exports, SEZ Supplies (with or without payment of tax), and Intrastate supplies attracting IGST.
iv. ISD Document type
v. Supply attract reverse charge – Yes / No,
vi. GSTR 1/5 filing date,
vii. ITC availability – Yes / No,
viii. Applicable % of Tax rate – 65% / 100%.
g. Search: Search functionality is applicable across the columns for the table being viewed. Characters allowed in the search functionality are numbers (0 – 9) characters (A – Z) and special characters ( / ‘ – . ).
h. Reference of Table no. of GSTR 3B: In view mode on the common portal, a summary of each section has the reference of table number of GSTR 3B in which credit of specific invoice can be availed/not availed. The same is available in the downloaded excel.
i. View/Download: Available online as well as in download form on click of a button rather than requesting and waiting for 20mins.
j. Date of filing by supplier: Date of filing of GSTR 1 and GSTR 5 by the supplier is available in view mode as well as download in excel. This could be helpful to understand when such document is filed by the supplier
|Sr no.||Table||Contains||Table of GSTR 3B||Comments|
|Table 3 Part A – ITC available|
|1||Section I||Invoices and Debit notes including amendment filed by the supplier in GSTR 1 and GSTR 5||4(A)(5)||
|2||Section II||Invoices including amendment filed in GSTR 6||4(A)(4)||Negative value due to amendment to be disclosed in Table 4(B)(2)|
|3||Section III||Invoices and debit notes pertaining to supplies on which tax is to be paid on RCM basis declared and filed by the supplier in GSTR 1||3.1(d) &
|Does not contain credit on import of services and unregistered supplier|
|4||Section IV||IGST paid on import of goods from the overseas and inward supply of goods from SEZ units/developers on the bill of entry including amendment||4(A)(1)||
|Table 3 Part B – ITC reversal|
|5||Section I||Credit notes received including amendment declared and filed in GSTR-1,5 and 6||4(B)(2)||Negative values – then credit may be reclaimed subject to reversal on an earlier instance.|
|Table 4 – ITC on invoice and debit note for information only will not be availed in Table 4(A) of GSTR-3B. Following are the invoices and debit notes covered in this table
i. Recipient not entitled to take the credit based on a time limit in Section 16(4)*
ii. Invoice or debit note where the Supplier (GSTIN) and place of supply are in the same State while the recipient is in another State. (Ex: accommodation services)
iii. ITC not to be availed is not restricted to the above two. If the portal does not generate “ITC not available” then self-assess based on GST Act and reverse accordingly.
Same tables would be available as mentioned in for ITC available.
*Section 16(4) – ITC could be availed in respect of invoices issued or debit note (DN) within the due date of furnishing of the GSTR 3B for September following the end of the financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
|Sr No||Invoice Date||Reported in GSTR 1 of||Date of filing of GSTR 1||GSTR 2A||GSTR 2B|
|1||15.08.2020||Aug 2020||11.09.2020||Aug 2020||Aug 2020|
|2||15.08.2020||Sept 2020||11.10.2020||Sept 2020||Sept 2020|
|3||15.08.2020||Aug 2020||11.10.2020||Aug 2020||Sept 2020|
i. ITC restriction based on Section 16(4)
|Sr No||Invoice Date||Reported in GSTR 1 of||Date of filing of GSTR 1||Available in GSTR 2B||ITC availability sheet|
|1||15.08.2020||Aug 2020||11.09.2020||Aug 2020||ITC available|
|2||15.08.2020||Aug 2020||11.10.2020||Sept 2020||ITC available|
|3||13.11.2019||Sept 2020||11.10.2020||Sept 2020||ITC available|
|4||13.11.2019||Sept 2020||20.10.2020||Oct 2020||ITC not available*|
|5||13.11.2019||Sept 2020||01.11.2020||Oct 2020||ITC not available|
*refer FAQ (c).
ii. Supplier (GSTIN) and place of supply are in the same State while the recipient is in another State
|Sr No||Supplier Location||POS||Recipient GSTIN||Tax Charged||ITC availability sheet|
|1||KA||KA||KA||CGST & SGST||ITC available|
|2||KA||KA||MH||CGST & SGST||ITC not available|
a. What is the validity of GSTR 2B?
GSTR-2B is enabled on the portal on a trial basis for July 2020, which is not backed by any legal sanction or the purpose for which it could be used. To effectively function for the subsequent periods, the law would need an amendment, the failure of which would result in excessive use of power by the Council.
b. What would be the purpose of GSTR 2B?
Advisory has also not mentioned the purpose for which GST 2B would be used. However, there is a clear indication that such a statement would be required for the following
i. Compliance of Rule 36(4) – Easier compliance of Rule 36(4), as reconciliations need not be performed on year to date basis time and again. The rule provides for restriction on availment of ITC up to invoices and debit notes uploaded by the supplier in GSTR 1 plus 10% additional of eligible credit of invoices and debit notes uploaded by the supplier in GSTR 1. Where there already existed doubt over constitutional validity on Rule 36(4) there is yet another addition by enabling GSTR 2B.
ii. Refund claims – Upload of GSTR 2A is required for claiming refund of unutilized ITC for exports and supplies to SEZ without payment of tax and on account of accumulation due to inverted duty structure. However, after implementation, the upload of GSTR 2B may be required for filing a refund application.
c. When can ITC on invoices/debit notes issued by quarterly return suppliers be availed?
Ideally, ITC can be availed by the recipient based on the valid invoice subject to conditions specified in Section 16 and 17. However keeping aside doubt over constitutional validity on Rule 36(4), the recipient could avail the ITC if the supplier has uploaded the invoice. In that case, ITC on invoices issued by quarterly return filers ideally could be availed in the third month. Although, practically, quarterly filers are allowed to upload invoices to GSTR 1 only in the 3rd month. This procedural lapse has lead to temporary blockage in credits.
d. Whether credit on an invoice dated 13.11.2019 uploaded by the supplier in September 2020 on 20.10.2020 should not be availed?
Section 37(3) provides a time-limit for rectification of errors and omission in GSTR 1 by supplier up to the filing of GSTR 3B of September 2020 and also Section 16(4) provides a time-limit to avail credit of FY 19-20 up to 20.10.2020 (unless extended). However, GSTR 2B of September 2020 would be available on 12.10.2020 which will not include details furnished up to 20th October 2020. The credit would not be available (above an additional 10%) if Rule 36(4) would be complied with. It is settled law that procedure cannot override principle law, however no clarification has been provided for the same but credit could be availed subject to Section 16, and Section 17 has complied.
e. Whether data uploaded but not submitted would appear in GSTR 2B?
Advisory states GSTR 2B shall contain data of GSTR-1, 5, and 6 filed by the supplier only and the statement also does not provide for in any column. However, GSTR 2A had even the data submitted but not filed by the supplier.
f. Is there any transitional impact from GSTR 2A to GSTR 2B implementation?
GSTR 2B has been introduced from July 2020 returns onwards. Therefore, any July 2020 onwards GSTR 1s filed by vendors would auto-populate in GSTR 2B to the recipient. Although, GSTR-1 not filed up to June 2020, which are being filed presently would still auto-populate under GSTR 2A. Therefore, for Rule 36(4) reconciliation October 2019 to June 2020, year to date reconciliations along with monthly reconciliations are suggested, and from July 2020 onwards, monthly reconciliations would be sufficient.
8. Clarity Awaited
The following are the points on which clarity has not been provided.
a. When the law would be prescribed to enable GSTR 2B and be effective?
b. Whether Compliance of Rule 36(4) which requires consolidated reconciliation of February 2020 to August 2020 would require reconciliation with GST 2B?
c. If effective from the subsequent month, whether credit on invoices of FY 19-20 uploaded by supplier be restricted for invoices only uploaded by the supplier within 11.10.2020 + 10% additional?
d. In case of law is not prescribed in the near future, whether the department will issue a notice for the difference in ITC availed in GSTR 3B and entries appearing in GSTR 2B?
e. Whether the timeline would be made applicable for the availment of credit for ITC on import of goods as it is appearing in GSTR 2B?
GSTR 2B is a welcome move for ensuring ITC has not been missed on certain invoices as the statement is static. GSTR 2B would reduce the involvement of time and cumbersome processes to download all the previous month’s statements. However, clarity needs to be provided for various open points to ensure no litigation arises.
Special thanks to CA Akshay Hiregange for inputs. The author could be reached at [email protected] for any queries /feedback.