GSTR-2B is an auto-drafted Input Tax Credit ( ITC ) statement, recently introduced by GSTN to simplify Input Tax Credit Claim for taxpayers. It is a fixed statement and will be generated on 14th of every month for every recipient on the basis of the information furnished by their suppliers in their respective GSTR-1, GSTR 5 and GSTR 6.
The 39th GST Council meeting was historical for taxpayers in a sense where simplification of return filing was discussed at length. The council had recommended significant enhancements which could ease the GST compliance for taxpayers. There have been many updates in the current GST system and some to be expected in the near future. One such enhancement that the Council recommended was the introduction of an auto-drafted input tax credit (ITC) statement which would aid in assisting/determining the input tax credit that is available for every taxpayer. As stated, it is not a return to be filed but an auto-generated statement.
What is GSTR 2B Return?
GSTR 2B is a static statement of available ITC for the taxpayer generated on the basis of GSTR 1 , GSTR 5 and GSTR 6 filed by recipients’ counter parties before the 14th of the succeeding month for which the statement is being generated. Unlike GSTR 2A where invoices are reflected even when invoices are uploaded and saved in these returns GSTR 1, GSTR 5 and GSTR 6, the statement GSTR 2B will have invoices only when the respective return is filed.
The statement will clearly show input tax credit available and not available for every document filed by any supplier for a recipient. For example, for the month of July 2020, the statement will be generated on 12th August 2020. This means the data will be considered until the 11th of the next month always.
Scope and Purpose of GSTR-2B
GSTR 2B has been introduced with the sole purpose of making tax compliance easier for the taxpayers. In the long run, it will help in better ITC computation and tracking. After the cut off date, the relevant invoices of GSTR-2A will be used to compute the summaries and other details of GSTR-2B.
|ITC Summary||Aggregated category wise similar to ITC Table in GSTR-3B||ITC available and not available. Further categorised section wise – B2B, CDN, Imports, RCM and ISD.|
|Supplier wise Summary||Aggregated supplier GSTIN wise within every category||
Within every category such as B2B, CDN, ISD etc. then aggregated at supplier GSTIN level. So no net or total wise of supplier.
For every supplier, filing status period and filing status is given which implies even within a category there could be more than one record of a supplier, if filing is done for multiple periods by supplier but falling in the same month for recipient.
|Invoice details||Invoice level details category wise||Similar to GSTR-2A invoice details.
Additionally available, flag of ITC availability and reason if ITC is not available.
Filing status also available at invoice level
How GSTR-2B is different from GSTR 2A?
Form GSTR-2A and GSTR-2B are both auto drafted statements containing details of purchase transactions, however there are some fundamental differences between the two.
|GSTR 2A||GSTR 2B|
|Is a dynamic statement.
In case of late filing done by suppliers, the respective month’s GSTR 2A gets updated
|Is a static statement.
In case of late filing done, GSTR 2B of latest open period gets updated
|Data is reflect real-time||Available only after 12th|
|Includes invoices of all counter parties – whether or not filling has been made||Invoices belonging to those counter parties who have filed returns|
|Contains invoice details as reported by suppliers||Additional info at invoice level such as ITC eligibility, return filing status etc. also available|
From API perspective as well there are certain differences like GSTR 2A is to be fetched section wise i.e. B2B, CDN, ISD, Imports etc., while for GSTR 2B all information, invoice details as well as summary can be fetched in one go. Given the static nature of GSTR 2B and dynamic nature of GSTR 2A, an invoice could be reflected in different months.
Explained in the Illustration – as table below:
|Supplier Return Period||Filing Date||Period of GSTR-2A||Period of GSTR-2B|
|July 2020||10-Aug-2020||July 2020||July 2020|
|July 2020||15-Aug-2020 (Late filing)||July 2020||Aug 2020|
|May 2020||10-Aug-2020 (Late filing)||May 2020||July 2020|
While overall the invoices in GSTR 2A and 2B will always be same, the timing difference could result in discrepancies. Alternatively, GSTR 2B can also be represented as
How will GSTR-2B help in better Input Tax Credit (ITC Claim)?
When it comes to ITC claims, reconciliation of purchase invoices and arriving at ITC amount considering actual and provisional claims are key. With introduction of GSTR 2B, all processes around ITC are impacted, albeit a positive one. While the taxpayers will continue to declare the ITC amounts in GSTR 3B, the new statement GSTR 2B can be used as basis for computation as it consists of additional details and also will be static
1. Identifying ITC not available
Against every document, additional information will be available which indicates whether ITC is available or not-available. The input tax credit shall be indicated to be non-available in the following scenarios:
a) Invoice or debit note for the supply of goods or services or both where the recipient is not entitled to an input tax credit as per the provisions of sub-section (4) of Section 16 of CGST Act, 2017. (Time limit for ITC claim: 30th September of the year following the financial year or date of filing annual returns whichever is earlier)
b) Invoice or debit note where the Supplier (GSTIN) and place of supply are in the same State while the recipient is in another State.
2. Filing Details of Supplier
GSTR 2B will include invoices of only those filing periods where returns have been filed. And these details i.e. the filing period and date of filing will also be made available in GSTR 2B. With this information previously taken provisional ITC, if any, can be checked and reconciled.
For ITC eligibility, there are some internal checks like use of business, non-business, nil etc. which will not be in GSTR-2A or GSTR-2B data. Thus, companies need to further keep a track of invoices claimed provisionally earlier but are appearing in current GSTR-2B, so that double claim is avoided.
Using GSTR-2B for GSTR-3B computation
The GSTR-2B making of ITC eligible and ineligible is as per the rules – Point Of Sale(POS).
Now if we see how companies compute GSTR-3B, it includes actual ITC and also provisional – these provisional (on account of non-filing) invoices will not be available in the same GSTR-2B month, but in whichever month the supplier has filed.
ITC Reconciliation – GSTR-2A or GSTR 2B?
GSTR-2B will give the upper limit of ITC that can be claimed in a particular month, which will consist of invoices of current month and also late filed invoices of previous months. Given that it is a fixed statement and available only on 12th of the subsequent month, the initial checking and matching of data can be continued using GSTR 2A.
GSTR 2A is real-time and till the time the supplier does not file the return, corrections if any, can be incorporated. Also, GSTR 2A will include invoices even if the supplier is yet to file their return. This could help to identify the invoices on which provisional ITC could be claimed.
GSTR 2B as of now includes data from GSTR 2A and soon will include invoices related to import transactions and be a richer and comprehensive source for ITC computation. Reconciliation based on GSTR 2A and comparative reports based on GSTR 2B is definitely an alternative which taxpayers can explore for maximising ITC claim.
This Advisory for form GSTR 2B can be referred to understand the computational and logic of auto-drafted GSTR 2B
Need Help with Form GSTR-2B?
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