All about GSTR 2 return (Statement of Inward Supplies) with FAQs

GSTR 2 is a monthly Statement of Inward Supplies all normal registered taxpayers to be filed in a given tax period.

Introduction

1. Who is required to file the GSTR 2 Return?

Receiver taxpayers are required to file GSTR 2 return (Statement of Inward Supplies) on a monthly basis in which they can accept, modify, reject, or keep pending the invoice level outward supplies information furnished by the supplier taxpayer in the GSTR 1 to prepare the details of inward supplies and credit or debit notes.

Receiver taxpayers can also add inward supplies and credit or debit notes received for supplies that are not declared by the supplier taxpayer in GSTR 1.

GSTR 2 needs to be filed even if there is no business activity (Nil Return) during a given tax period.

2. Is there any taxpayer who is exempt from filing GSTR 2?

Yes, the following taxpayers are exempt from filing GSTR 2:

• Input Service Distributors
• Taxpayers under the Composition Scheme
• Non-resident Taxable Persons filing GSTR 5

3. By when do I need to file the GSTR 2 for a given tax period? OR What is the due date for filing the GSTR 2?

The due date for filing GSTR 2 is the 15th of the month succeeding the tax period.

Example: The goods and/or services received during the month of July should be filed by the 15th of August. In other words, for the supplies received in the month M, the GSTR 2 shall be filed on or before the 15th day in month M+1.

4. Can the date of filing GSTR 2 be extended?

Yes, the date of filing GSTR 2 can be extended by the Board/Commissioner by notification.

5. Is there any late fee applicable on filing of GSTR 2 after the due date? If yes, what are the charges?

Yes, a receiver tax payer is charged late fee for filing GSTR 2 after the due date.

Late fee for filing GSTR 2 after the due date is auto calculated after filing the return. In other words, the payment of late fee is not required before filing of GSTR 2. The fee must be paid before filing GSTR 3, without which the return is considered invalid.

The charges for late filing of GSTR 2 is INR 100 per day per act (IGST/CGST/SGST) based on the types of inward supplies received by the taxpayer (inter-state, intra-state, or both). Depending on the types of inward supplies received, the total charges may be INR 300 (100+100+100) per day, as a taxpayer registered under the SGST/CGST Act is deemed to be registered under the IGST Act as well.

6. What is the definition of inward supplies under GST?

The inward supplies include all inward supplies of goods and/or services, including inward supplies of services on which the tax is payable on reverse charge basis. It also includes inter-state inward supplies, debit notes or credit notes and supplementary invoices issued during a specific tax period.

7. Under what circumstances can the details of inward supplies of month M in the GSTR 2 be filed before the end of month M (before the end of the tax period)?

Normal taxpayers cannot file GSTR 2 before the end of the current tax period. However, following are the exceptions to the rule:

• Casual Dealers and Non-resident Taxable Persons

• Taxpayers who have applied for voluntary cancellation of GST registration are allowed to file GSTR 2 before the end of the current tax period if they have received the cancellation order.

8.  What is the time limit up to which a taxpayer can claim ITC?

ITC can be claimed up to 12 months from the date on which the original invoice/debit note was issued or annual return was filed, whichever is earlier. There will be no transfer in the Electronic Credit Ledger in case there is a gap of more than a year between the original invoice/debit date and date of filing of GSTR 3 for the tax period when such details were uploaded.

9.  What are the pre-conditions for filing GSTR 2?

Pre-conditions for filing of GSTR 2 are:

• The receiver taxpayer should be a Registered Normal Dealer and should have an active GSTIN.
• Receiver taxpayer should have valid login credentials (i.e., User ID and password).
• Receiver taxpayer should have valid and non-expired/unrevoked digital signature certificate (DSC), in case it is mandatory (DSC is mandatory for companies, LLPs and FLLPs).
• Receiver taxpayer should have a valid Aadhaar number with mobile number, in case they want to use the E-Sign option.
• A receiver taxpayer will have an option to file GSTR 2 for cancelled GSTINs however it will not be mandatory.
• Due date for filing of GSTR 1 of the same tax period should have lapsed.

10.  What are the post-conditions for filing of GSTR 2?

Post-conditions for filing GSTR 2 are:

• ARN is generated on successful submission of the GSTR 2 Return. In case the return is filed through an offline utility, a Temporary ID is generated when the taxpayer uploads the xml file. On successful submission of the return, an ARN is generated.
• An SMS and an email are sent to the taxpayer on successful submission of the GSTR 2.
• Once the Return is submitted after affixing DSC or E-sign as the case may be, the return is passed on to:
• i. The CBEC (Central Board of Excise and Customs – the central tax authority)
• ii. The state or UT of registration
• In case of amendments or additions, details of counterparty supplier taxpayers are auto-populated in GSTR 1A/GSTR 5A.
• Electronic Credit Ledger is updated.

11.  Where can I access my GSTR 2 for a given tax period?

In the post-login mode, you can access the GSTR 2 return by navigating to the Returns Dashboard and selecting the given financial year and tax period.

Path: Services > Returns > Returns Dashboard

12.  What are the steps involved in filing GSTR 2?

• Receiver taxpayer logs into the GST portal using their login ID and password.
• Navigate to Services > Returns > Returns Dashboard
• Select the financial year and tax period for which GSTR 2 needs to be filed and click SEARCH
• All returns pertaining to the given tax period will be displayed as tiles
• Select the GSTR 2 tile and click on PREPARE ONLINE or UPLOAD.
• Receiver taxpayer will be able to see the supplier-wise summary of all invoices received.
• Against each invoice of each supplier, receiver taxpayer shall take one of four possible actions – Accept, Modify, Reject, and Keep Pending
• The taxpayer can also Add (by using ADD MISSING INVOICE option) all the invoices for the tax period which have not been added by the various Supplier(s), if applicable.
• After taking action and entering/uploading all the invoices and details in the various sections of the GSTR 2, taxpayer will click SUBMIT to validate the data.
• Once the data is validated, taxpayer can click on FILE GSTR 2 using DSC or E-Sign (DSC is mandatory for companies, LLPs, and FLLPs)

• A confirmation message will pop-up to confirm or cancel the filing with YES and NO options respectively. Upon clicking YES, GSTR 2 will be filed and Acknowledgement Reference Number (ARN) will be generated for the same.

High-level flow of information from GSTR 2 to other returns

1. Explain in detail the various actions that I can perform as a Receiver Taxpayer on the uploaded invoices that are auto populated in my GSTR 2 for a given tax period.

All B2B supply details uploaded by a supplier taxpayer will be displayed to the receiver taxpayer (you) on a near real time basis. Once the supplier taxpayers file their GSTR 1, you can accept/delete/modify each and every invoice received from each and every supplier. You can also choose to keep an invoice pending for action; pending invoices will be rolled over to next tax period return of the receiver taxpayer.

If you are filing GSTR 2 post filing of GSTR 1 by the supplier taxpayer, then you have to compulsorily take action on the information so received.

If GSTR 1 has not been filed by the supplier by the due date (10th day of M+1 where M is the tax period) and you have filed your GSTR 2, then all B2B, Amended B2B, Debit and Credit Notes, and Amended Debit/Credit Note details from your GSTR 2 will be auto populated in the GSTR 1 of the supplier taxpayer and supplier taxpayer has to take action against each and every invoice received by accepting/modifying/rejecting. Also, if GSTR 3 has already been filed by you, then supplier taxpayer has to compulsorily take action before filing GSTR 1 for the subsequent period.

As a receiver taxpayer, you can also add B2B invoices in your GSTR 2 that have been missed by the supplier taxpayer. You can add these missed invoices after the due date of GSTR 1 (11th day of M+1 onwards) or after of filing of GSTR 1 by the supplier taxpayer, whichever is earlier. You can add the invoices till the actual date of filing of GSTR 2/4/6.

2. What happens to a supplier’s invoice when I accept it in my GSTR 2?

Note: It is assumed that the supplier has filed GSTR 1 successfully since the invoice is available to you for action in your GSTR 2.

Any such invoice from a supplier accepted by you in your GSTR 2 becomes part of your GSTR 2 Return.

3. What happens to an invoice when I modify it in my GSTR 2?

Note: It is assumed that the supplier has filed GSTR 1 successfully since the invoice is available to you for action in your GSTR 2.

The modified invoice becomes part of your GSTR 2 Return in its amended form.

Additionally, the modified flows to the GSTR 1A of the counterparty (in this case the corresponding supplier taxpayer) for acceptance/rejection of modification made by you.

4. What happens to an invoice if I reject it in my GSTR 2? Does it flow to the GSTR 1A of the supplier?

Note: It is assumed that the supplier has filed GSTR 1 successfully since the invoice is available to you for action in your GSTR 2.

The rejected invoice is removed (deleted) from your GSTR 2 and an intimation is sent to the counterparty and the concerned tax official(s).

No, the rejected invoice does not flow to the GSTR 1 of the counterparty (in this case supplier taxpayer).

5. What happens to invoices that I add in my GSTR 2 using ADD MISSING INVOICE feature? Do they also flow to the GSTR 1A of the respective supplier taxpayers?

There are two possible scenarios:

a. Supplier taxpayers have filed GSTR 1 – in this case, all invoices added by me (receiver taxpayer) will flow to the respective GSTR 1A of the supplier taxpayers where they can accept/reject/modify the invoices.

b. Supplier taxpayers have not filed GSTR 1 – in this case, all invoices added by me (receiver taxpayer) will flow directly to the respective GSTR 1 of the supplier taxpayers since they have not filed the same as yet.

6. Do I need to take action on every outward supply mentioned by supplier taxpayers in their GSTR 1 while filing my GSTR 2?

Yes, you need to take action on every outward supply mentioned by your supplier taxpayers in their valid GSTR 1 return of the same period or previous period for the purpose of filing your GSTR 2.

7. What happens if the ITC claimed by me in lieu of inward supplies is more than the tax declared by the supplier for the same supply or if the outward supply is not declared by the supplier at all?

In such cases, where there is a discrepancy between a supplier taxpayer and a receiver taxpayer in the details of the same invoice (supply) resulting in an upward revision of tax liability for either party, a mismatch report is generated that is communicated to the supplier, receiver, and concerned tax officer(s).

If the supplier taxpayer does not rectify the amount as communicated in the mismatch report, then the amount of discrepancy shall be added to the output tax liability of the recipient in their return for month M+2 where M is the tax period. The recipient will also pay interest at the prescribed rate on the amount of credit from the date of availing the credit till the date of addition to the output liability.

8. Can a receiver taxpayer add/upload the invoices/debit note for a date prior to the date of registration?

No.

9. What will be the impact on entries in GSTR 2 if a normal taxpayer gets converted into a compounding taxpayer?

Once a normal taxpayer gets converted into a compounding taxpayer, the data entered in GSTR 2 after the date of conversion can only be for invoices/documents dated prior to the date of conversion.

10. Will there be a system check for duplication of an ITC claim?

Yes, the system will check for the duplication of an ITC claim. The duplication check of an invoice will be at the GSTN Supplier, Invoice Number, and Financial Year level. This check will be performed at the time of data validation before filing the GSTR 2.

11. Can I modify or reject a previously accepted invoice received from a supplier taxpayer after I file my GSTR 2?

No, it is not possible to modify or reject (delete) an invoice once you have accepted it and filed your GSTR 2.

12. I accidently rejected an invoice received from a supplier taxpayer and filed my GSTR 2. Is there any way for me to accept the invoice now?

No.

13. Can I file my GSTR 2 for a given tax period (M) if I have not filed my GSTR 3 for the previous tax period (M-1)?

Yes, you can. However, you cannot file the GSTR 2 for a given tax period (M) if you have not filed your GSTR 2 for the previous tax period (M-1).

14. Can I use the input tax credit I have claimed in my GSTR 2 even if my supplier/s have not filed their GSTR 1?

Yes, you can avail the provisional credit to discharge your liabilities. However, it is important to note that in the event of any reversal of ITC in future due to mismatch, interest will be levied on the excess ITC claimed by a receiver taxpayer from the date of filing of GSTR 2 to the day the receiver taxpayer discharges the excess liability along with interest.

15. Can I rectify an error or omission that remained unmatched? Can my GSTR 2 be revised?

Yes, you can rectify an error or omission that remained unmatched in the tax period during which such an error or omission is noticed. You will be required to pay the full tax and interest in lieu of the error/omission in the return in which you are furnishing the details.

Yes, GSTR 2 can be revised before filing of return for the month September of the succeeding financial year (01-02) or filing of the annual return GSTR 9 of the relevant financial year (00-01), whichever is earlier.

High level counterparty actions and some basic scenarios

1. If GSTR 1 of month M is filed by supplier taxpayer after filing of GSTR 2 by the receiver taxpayer, what action(s) need to be taken by the supplier?

If supplier’s GSTR 1 is filed after filing of GSTR 2 by the receiver, the supplier has to take action of acceptance/modification/rejection on the invoices uploaded by the receiver taxpayer in their GSTR 2.

Acceptance/modification of invoices by the supplier will form part of GSTR 3 of the supplier of M tax period if such an acceptance/modification is done, followed by successful filing of GSTR 1 but before the creation of GSTR 3 of M tax period.

2. What happens if the supplier rectifies the amount in lieu of an excess claim of ITC which was added to recipient’s output liability as a result of the supplier’s non-declaration of tax for the same supply? What will be impact on interest paid by the recipient on the amount which was added to the output tax liability of the recipient?

Precondition: Such an action must be taken by the supplier before filing of return for the month September of the succeeding financial year or filing of the annual return GSTR 9 of the financial year in which the supply was made, whichever is earlier.

The recipient becomes eligible to reduce, from his output tax liability, the amount which was added as a result of non-declaration of tax for the same supply by the supplier. The interest paid by the recipient in this regard shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger but the amount of interest shall not exceed the amount of interest paid by the supplier.

3. What happens if the supplier rectifies the amount in lieu of duplication claim of ITC which was added to the recipient’s output liability as a result of supplier’s non-declaration of tax for the same supply? What will be impact on interest paid by the recipient on the amount which was added to the output tax liability of the recipient?

Precondition: Such an action must be taken by the supplier before filing of return for the month September of the succeeding financial year or filing of the annual return GSTR 9 of the financial year in which the supply was made, whichever is earlier.

The recipient becomes eligible to reduce, from his output tax liability, the amount which was added as a result of duplication of ITC for the same supply by the supplier. The interest paid by the recipient in this regard shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger but the amount of interest shall not exceed the amount of interest paid by the supplier.