GSTR 2B : The Reconciliation Statement

What is GSTR 2B Return?

To put it simply, the GSTR 2B is in fact a static statement of available ITC. Further, it generates on the basis of filed GSTR 1 , GSTR 5 and GSTR 6. Unlike the GSTR2A, GSTR2B is a static statement and generates on the 12 of the succeeding month. For example, for the month of November 2020, the statement generates on 12th December 2020. Moreover, the return will contain all data filed between 12th November and 11th December 2020.  Above all, note that this data will be static and not change. Henceforth, taxpayers will have to ensure that the ITC being availed in the returns is also there in their 2B.

Further, the documents would reflect in the next open GSTR-2B of the recipient irrespective of the date of the document. For example : INV-100 dated 17.08.2020 uploaded in October 2020 return filed on 08th November 2020, would reflect in 2B of October 2020 generated on 12th November 2020 and not in 2B of August 2020.

Its possible to download the GSTR-2B in excel as well as json format. If you have more than 1000 documents across all tables of Form GSTR-2B, document details table will not be displayed online.

Also, you’ll see a lot of references to the GSTR 2A in this article. As GSTR 2B initially will complement and surely replace the old way of using the GSTR2A for reconciliation.

Why the GSTR 2B?

The 39th GST Council meeting certainly was historical for taxpayers. In a sense, the GSTR2B came into existence because of the discussions during the meeting. Easing the GST compliance for taxpayers was certainly the main agenda of the meeting. The council discussed about the simplification of ITC claim and return filing systems at length. The council during the meeting recommended significant enhancements. 

Surely, one such enhancement that the Council recommended was the introduction of an auto-drafted input tax credit (ITC) statement.  This was the GSTR 2B which would assist in determining the input tax credit that is available for every taxpayer.

Certainly referring this note for form GSTR 2B helps understand the logic of the statement.

Will the GSTR-2B help in better Input Tax Credit Claim and Reconciliation?

While the businesses will continue to declare the ITC amounts in their GSTR 3B, the new GSTR 2B shall be used for computation of the amount of ITC. The earlier reconciliation system was such that businesses could avail the ITC and reconcile it later. However, with the introduction of the GSTR 2B, everything changes. Now, businesses reconcile before availing ITC. Further if the ITC does not appear in their 2B, as per the rules, it should not be availed. Again, the 2B is not a return that requires filing but a tool used in the return filing process.

While the 2B includes details of ITC for invoices where returns have been filed. In contrast, the 2A also showed details of details submitted but not filed. Further, 2B also contains the filing period as well as the date of filing. 

While there are certain new checks in the 2B that help in the reconciliation process, the regular internal checks like use of business, non-business, nil etc will still be in use. Also, during the transition from 2A to 2B,  businesses should further keep track of invoices claimed provisionally earlier but are appearing in current GSTR-2B.

Contents of  GSTR2B

The following are the contents of the GSTR 2B:

1. A Summary statement that shows ITC available as well as non-available for every section.
2. Advisory in particular for every section that clarifies the kind of action that taxpayers must take.
3. Document-wise details such as invoices, credit notes, debit notes, etc. to view and download.
4. Cut-off dates as well as advisory for generating and using GSTR-2B.
5. Finally, import of goods and import from SEZ units/developers

The input tax credit marked as not available in the following two scenarios:

1. 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).
2. The state of the supplier and place of supply is the same, whereas the recipient is located in another state.