With effect from the tax period August 2020, a new static auto-drafted statement in Form GSTR-2B was introduced. Notably, GSTR-2B possesses vital importance in the life of a registered taxable person under GST since the same is directly related to the availment of the input tax credit.
In order to curb the practice of fake invoicing and fake availment of the input tax credit, various amendments are introduced (yet not notified) under the Finance Act, 2022 referring to and co-relating Form GSTR-2B, input tax credit availment and restriction imposed vide section 38 of the Central Goods and Services Tax Act, 2017.
The present article firstly explains the provisions governing GSTR-2B; then, travels to the provisions inter-linking GSTR-2B and availment of the input tax credit; then, explains the entire format of GSTR-2B and finally reaches to the checklist of GSTR-2B helpful for avoiding litigation and maximizing availment of an input tax credit.
GSTR2B Governing Provisions
The provisions governing GSTR-2B under the Central Goods and Services Tax Act, 2017 as well as under the Central Goods and Services Tax Rules, 2017 are highlighted in the table below
Provisions | Explanation |
|---|---|
Section 37(1) of the Central Goods and Services Tax Act, 2017 | The provision simply states that the details of outward supplies in GST furnished by the supplier in Form GSTR-1 will be communicated to the recipient within such time and manner as may be prescribed. |
Rule 60(7) of the Central Goods and Services Tax Rules, 2017 | The provision states that, an auto drafted ITC statement, in Form GSTR-2B, will derive details from the specified sources (explained below). |
Rule 60(8) of the Central Goods and Services Tax Rules, 2017 | The provision states the due date within which Form GSTR-2B will be made available to the recipient (explained below). |
As per rule 60(7), GSTR-2B will derive details from the following specified sources
How to Download GSTR 2B?
As per rule 60(8), the recipient can download GSTR-2B for the month on the 14th of the succeeding month. The recipient needs to follow the below steps to download GSTR-2B from the GST portal –
- STEP 1 – Go to the GST portal https://www.gst.gov.in;
- STEP 2 – Click Login and enter ‘Username’ and ‘Password’;
- STEP 3 – Select the following path
Services – Returns > Returns Dashboard; - STEP 4 – From the drop-down list, select relevant ‘Financial Year’ and ‘Return filing period’;
- STEP 5 – Click SEARCH;
- STEP 6 – ‘Auto drafted ITC Statement GSTR-2B’ with visible. It has two options ‘VIEW’ and ‘DOWNLOAD’;
- STEP 7 – Select ‘Download’.
Notably, the GSTR-2B download is available in the following two options (formats) –
- Generate JSON file to download – select this format/ option to download GSTR-2B in JSON file; and
- Generate Excel file to download – select this format/ option to download GSTR-2B in an excel file.
GSTR2B and Input Tax Credit Availment
Above, we went through the provisions governing GSTR-2B. Now, let us go through the provisions through which inter-linking of GSTR-2B and availment of the input tax credit is established under GST. The provisions are explained hereunder –
Notably, both the above provisions i.e. section 16(2)(aa) and rule 36(4)(b) ends up stating the same thing.
As per the input tax credit condition laid down under section 16(2)(aa), the recipient is entitled to avail of input tax credit only when the supplier communicates the same in Form GSTR-2B.
In our previous article we discussed on ITC claim in GST with all major conditions and checklist in details.
Further, according to the provisions of rule 36(4)(b), the input tax credit is not available unless the details of the respective invoice/ debit note are communicated to the recipient via Form GSTR-2B.
GSTR2B Format : Explain in Details
After going through the importance of GSTR-2B, it is also essential to understand the format of the same.
As of now, other than basic details of the registered taxable person, Form GSTR-2B is broadly divided into two parts featuring ‘Summary of available Input Tax Credit’ and ‘Summary of not available Input Tax Credit’. Both the parts are explained hereunder –
The part covering ‘Summary of available Input Tax Credit’ –
Part A – Input Tax Credit Available
Particulars | Corresponding table no. of GSTR-3B where input tax credit can be claimed | Action |
|---|---|---|
Input Tax Credit available against supply from registered persons (other than reverse charge). | Table 4(A)(5) of GSTR 3B return filing |
|
Input Tax Credit under GST available against inward supplies from input service distributor | Table 4(A)(4) of GSTR-3B |
|
Input Tax Credit available against inward supplies liable for reverse charge | Table 3.1(d) and Table 4(A)(3) of GSTR-3B |
|
Input Tax Credit available against the import of goods | Table 4(A)(1) of GSTR-3B |
|
Part B – Input Tax Credit Reversal | Cell | Cell |
Input Tax Credit shall be reversed | Table 4(B)(2) of GSTR-3B |
|
The part covering ‘Summary of not available Input Tax Credit’ –
Part A – Input Tax Credit not available
Particulars | Action |
|---|---|
Input Tax Credit not available against supply from registered persons (other than reverse charge in GST ). | No action is to be taken since the input tax credit is not available the same is not to be reflected in GSTR-3B. |
Input Tax Credit not available against inward supplies from input service distributor | No action is to be taken since the input tax credit is not available the same is not to be reflected in GSTR-3B. |
Input Tax Credit not available against inward supplies liable for reverse charge | Here, also input tax credit is not available. However, for payment of tax on reverse charge, the same is to be declared under table 3.1(d) of GSTR-3B. |
Part B – Reversal of ITC | |
Input Tax Credit shall be reversed | Input tax credit needs to be reversed under Table 4(B)(2) of GSTR-3B. |
It is important to note that the above GSTR 2B format will get amended once the provisions as proposed vide the Finance Act, 2022 are notified.
GSTR2B Checklist to Avoid Notices, Penalty, Late Fees
After going through all the above provisions, it is pretty clear that GSTR-2B is vitally important under GST for the registered taxable person. Let us prepare the checklist of the same in order to avail of the maximum ITC reversal and also avoid any litigations and penal provisions under GST-
Firstly, carry out the home work
Work out the input tax credit available on the basis of the transactions of receipt of goods or services or both undertaken during the relevant month;
Then, refer to the data available with the GST department
On the 14th of the succeeding month, download Form GSTR-2B using the steps as described above;
Then, compare the home data and data available with the GST department
Carry out the GSTR 2B reconciliation (preferably part-wise) between input tax credit as worked out under Step 1. above and input tax credit as detailed under GSTR-2B downloaded under Step 2
Post GST reconciliation, in order to avoid any litigations and penal actions, avail the input tax credit only to the extent of the same reflected in GSTR-2B and reverse the remaining input tax credit;
Post GST ITC reversal , in order to maximize ITC with GSTR2B filing, point the supplier to correct necessary mistakes in the next GST return filing period.
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