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ITC to be taken as per 2A/2B/Books

What is ITC?

Input Tax Credit Mechanism is available to you when you are registered as a Taxpayer under GST Act whether you are Manufacturer, Supplier, Agent, E-Commerce Operator etc. You are eligible to claim ITC on your Purchases.

How to claim ITC?

For claiming of ITC you need to fulfill four conditions of Sec 16(2)

Sec 16(2) States:-

Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,––

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other taxpaying documents as may be prescribed;

(b) he has received the goods or services or both.

[Explanation.— For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services––

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) Where the services are provided by the supplier to any person on the direction of and on account of such registered person;]

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and

(d) He (Recipient) has furnished the return under section 39:

Provided that where the goods against an invoice are received in lots or installments, the registered person shall be entitled to take credit upon receipt of the last lot or installment:

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

What is GSTR 2A?

GSTR 2A is a purchase-related dynamic tax statement that is automatically generated for each business by the GST Portal. When a seller files his GSTR 1, the information is captured in GSTR 2A. It takes information of goods and services which have been purchased in a given month from the seller’s GSTR 1.

What is GSTR 2B?

GSTR 2B is a new Static Month wise Auto – Drafted Statement for Regular Taxpayer. It is Similar to GSTR 2A but remains constant unchanged for a period.

Newly inserted Section by Budget 2021 Section 16 (2)(aa)

The details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the  recipient of such invoice or debit note in the manner specified under section 37 i.e GSTR 1.

My View

Before insertion of sec 162(aa) Rule 36(4) is empowered by sec 43A but this section has not been notified yet and the applicability of Rule 36(4) has been challenged before various Authorities & High Courts.

Sec 16(2)(aa) clearly gives power to Rule 36(4) and to GSTR 2B as well, but fortunately this section is also not notified yet.

Now, if you can litigate the matter with Authorities and can face Mismatch 2A v/s 3B notices given by Department then you can take ITC as per books.

But if you want to run peaceful business then encourage your supplier to file his GSTR 1 before the 10th (Due Date) of the succeeding month so that your invoices are reflected in GSTR 2B so that you can avail 100% ITC. (Recommended for future run as well).

Author Bio

Author has done MBA from IIPM Delhi in Finance & Marketing and has a work experience of 3+ years in Indirect Taxation. He is constantly and still continuing to be GST Advisor for Indian Industries Association (IIA) & Saharanpur Hosiery Manufacturers Association. View Full Profile

My Published Posts

All About Fake Invoice under GST Provisional Attachment of Property Under Section 83 of CGST Act In Certain Cases All About Block Input Tax Credit In GST Interest Can Be Levied If ITC Wrongly Availed But Not Utilized? View More Published Posts

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  1. roshan says:

    Dear sir,

    Can we file GSTR 3B return as per our accounts books or we have to file as per GSTR 2B.

    Kindly suggest, as we have filed GSTR 3B as per our books is there any issues.

    1. Ashish Miglani says:

      From 01/01/2022 new clause (aa) have been inserted by way of Notification No 39/2021 Dated 21/12/2021 in Section 16 (2) read with Rule 36(4) which states that the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.
      In Simple Words it means that you to take ITC mandatory as per GSTR 2B and not as per books

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May 2024