Background
GST Council, in its 39th Meeting held on March 14, 2020, recommended linking the data available in GSTN viz. linking outward supply data in Form GSTR-1 and Form GSTR-3B and Input Tax Credit (‘ITC’) data between Form GSTR-2A and Form GSTR-3B.
It was also stated that the present return system (GSTR-1, GSTR-2A & GSTR-3B) will be continued until September 2020.
On August 29, 2020, the Government has issued Press Release and introduced Form GSTR-2B which indicates ITC available to taxpayer for relevant tax period.
GSTR-2B is an auto-drafted Input Tax Credit (ITC) statement generated for every recipient, on the basis of the information furnished by their suppliers, in their respective Form GSTR-1(Outward Supply details) & 5 (Non Resident Taxable Person return) and Form GSTR-6 filed by Input Service Distributor. It is a static statement and will be made available for each month, on 12th day of the succeeding month.
Purpose
The purpose of GSTR-2B is to assist the taxpayers in reconciling and matching the Input Tax periodically as it reflects all inward supplies and corresponding tax paid thereon.
Taxpayers can now reconcile data generated in Form GSTR-2B, with their own records and books of accounts. Using this reconciliation, they can now file their Form GSTR 3B and can ensure that;
- No credit is taken twice,
- Credit is reversed as per law, &
- Tax on reverse charge basis is paid.
Steps to download
Taxpayers can access their GSTR-2B through:
> Login to GST Portal
> Go to Returns Dashboard
> Select Return period
> Click on Form GSTR-2B
Contents and Features
GSTR-2B contains input tax credit on purchases from any regular taxpayers, non-resident taxable persons and input tax credit distributed by the input service distributor.
The contents of GSTR-2B are as follows:
- Summary statement showing ITC available and non-available for every section.
- Advisory for every section that clarifies the kind of action that taxpayer must take in GSTR-3B.
- Document-wise details such as invoices, credit notes, debit notes, etc. to view and download.
- Cut-off dates and advisory for generating and using GSTR-2B.
- Input tax credit on Import of goods and import from SEZ units/developers (available from GSTR 2B of August 2020 onwards).
GSTR-2B will consist of all the GSTR-1s, 5s and 6s being filed by your respective supplier. Generally, this date will be between filing date of GSTR-1 for previous month (M-1) to filing date of GSTR-1 for the current month (M). For example, GSTR-2B for the month of February will consist of all the documents filed by suppliers in their GSTR-1, 5 and 6 from 00:00 hours on 12th February to 23:59 hours on 11th March. It may be noted that for import of goods, the data is being updated on real time basis, therefore, imports made in the month (month for which GSTR-2B is being generated for)shall be made available. The dates for which the relevant data has been extracted is available under the “View Advisory” tab on the online portal. It also contains information on imports of goods from the ICEGATE system including data on imports from Special Economic Zones Units / Developers.
The input tax credit will marked as not available in the following two scenarios:
- Where the time limit to avail input tax credit on an invoice or debit note has expired under section 16(4) of the CGST Act (earlier of 30th September of the year following the financial year or date of filing annual returns).
- The state of the supplier and place of supply is the same, whereas the recipient is located in another state.
Comparison between GSTR-2A and GSTR-2B
| Points of Comparison | GSTR-2A | GSTR-2B |
| Nature of Statement | Dynamic, as it changes from day to day, as and when the supplier uploads the documents. | Remains static or constant, as the GSTR-2B for one month cannot change based on future actions of the supplier. |
| Source of Information | GSTR-1, GSTR-5, GSTR-6, GSTR-7, GSTR-8 | GSTR-1, GSTR-5, GSTR-6, ICEGATE system |
| ITC on Import of Goods | Does not contain these details | Contains ITC on import of goods as obtained from ICEGATE system (available from GSTR-2B of August 2020 onwards) |
| Reversal of ITC | GSTR-2A does not contain the details of ITC required to be reversed. | GSTR-2B contains the details of ITC required to be reversed only in limited specified cases. |
| GSTR-1/5 filing date and period | GSTR-2A does not contain the GSTR – 1/5 filing date and period against each supplier. | GSTR-2B contains the GSTR – 1/5 filing date and period against each supplier. |
| Auto population of data on submission of return | Data in GSTR-2A get populated merely on submission of GSTR-1. | Data in GSTR-2B get populated after filing of GSTR-1. |
| Periodicity | GSTR-2A is a dynamic/ periodic statement which includes data on the basis of date of invoices.
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GSTR-2B is a monthly statement which includes data for every return which is filed during a particular period.
For example: GSTR-2B for the month of July 2020 shall contain the informations regarding the GSTR-1, GSTR-5 & GSTR-6 filed from 12th July 2020 to 11th August 2020. |
| Supplier wise information | GSTR-2A does not contain the supplier wise information. It provides the information invoice/document wise only. | GSTR-2B contains the supplier-wise as well invoice/document wise information. |
Challenges
Though the intention of the Government is to simplify the process of availment of input tax credit but at the same time it leads to lots of challenges for the taxpayer;
a) Reconciliations issued continued and increased: GSTR-2B shall result into more reconciliations viz. GSTR-2B vs ITC as per Books of Accounts, GSTR-2A vs GSTR-2B, GSTR-2A vs ITC as per Books of Accounts, ITC as per GSTR-2B Vs ITC as per GSTR-3B etc. The taxpayers may also be ready to furnish these reconciliations to the department based on auto-generated notices in this regard.
b) Static Statement: GSTR-2B shall contain all the credit as reflected from GSTR-1, GSTR-5, GSTR-6 filed by the respective suppliers till 11th of the following month. This implies following ;
The Recipient Taxpayer will not be able to claim ITC in respect of supplies where GSTR-1 has filed after 11th of the following month by the corresponding supplier. In this case ITC can be claimed in GSTR-3B of the next month.
This issue was also present earlier as vide Rule 36(4) of CGST Rules, the tax payer cannot claim more than 10% of eligible credit for invoices which are not appearing in GSTR-2A. However,the time limit for calculating eligible credit was available till the date of Filing GSTR-3B. In case of GSTR-2B being a static statement, eligible credit will only include entries of Statement of Outward supplies filed till 11th of the following month.
ITC may also be deferred in case of taxpayers filing GSTR- 1 on quarterly basis. The large corporates may insist their vendors for opting for monthly filing of GSTR-1.
c) Ineligible ITC: GSTR-2B shall show the ITC available as well as ITC not available to the taxpayer. But ITC not available shall be auto-populated based on only two limited parameters viz. Expired time limited for claiming ITC or Location of supplier & Place of Supply is in same State, whereas the recipient is located in another State. Thus, the taxpayer still has to analysis the entries in GSTR-2B for identifying the blocked input tax credit under section 17(5) of the CGST Act.
d) Payment of tax on reverse charge supplies received from unregistered supplier: GSTR-2B shall also contain the invoices on which tax has to be paid under reverse charge by recipient. These details shall only be reflected in GSTR-2B only when the supplier was registered and has filed the GSTR-1 & shown the invoices on which recipient is liable to pay the tax. But, there can be other scenarios also where the recipient is liable to pay the tax under reverse charge viz. Import of services, RCM supplies provided by unregistered supplier etc. In such cases, no details will be available in GSTR-2B and the taxpayer shall be required to do calculations based on other documents/ records.
e) No Legal Validate: As of now, it can be noted that there is no legal validate for this GSTR-2B in GST Law.
f) Restriction on availment of ITC upto 10% of eligible ITC as appearing in GSTR-2A on invoices that are not appearing in GSTR-2A: As per Rule 36(4), the registered person shallclaim upto 10% of eligible credit as appearing GSTR-2A on invoices which are not appearing in GSTR-2A. The application and continuity of this rule needs to be seen after implementation of GSTR-2B.
Way Forward
Needless to say that Form GSTR-2B will be increasing compliance and ITC reconciliation burden for taxpayers. Taxpayers need to reconcile Form GSTR-2B with Form GSTR-2A as well as Books of accounts for availing ITC. Apart from that, taxpayers need to ensure that the correct ITC has been claimed based on these reconciliations.
| Written By: | Assisted by: |
| CA. Chitresh Gupta
FCA, LL.B, B. Com(H) Co-Author of book “GST –Law, Analysis & Procedures” Faculty on Goods & Services Tax by ICAI |
CA. Pranjal Agarwal
Chartered Accountant
|
DISCLAIMER:
The views expressed in this article are personal views of the Authors. This article includes general information about legal issues and developments in the law of GST in India. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law.
Author Bio
This article is very informative to all users particularly for non-taxation professional. It’s very much useful.
It acts as an Eye Opener for Tax Professionals as well.
Thanks again for publishing this article. We expect similar article whenever there is any change in the Law.