GSTN Advisory on how to fix GSTR 2B ITC Issue

GSTR 2B ITC Issue : GSTN Advisory on how to fix it for FY 2023-24

Recent Goods and Services Tax Network advisory and the concept explained by Rajput Jain and Associates Experts chartered Accountants in the context of GSTR-2B and ITC issues. Here are the scenarios outlined in the Goods and Services Tax Network advisory dated November 16, 2024, explaining why GSTR-2B (Input Tax Credit Statement) might not have been generated for certain taxpayers for October 2024:

Reasons GSTR-2B May Not Be Generated

• Taxpayer Registration Cancelled: If the Goods and Services Tax registration of the taxpayer was cancelled as of the first day of the following month (i.e., November 1, 2024), their GSTR-2B for October will not be generated.
• Suspension of GSTIN: When a taxpayer’s Goods and Services Tax Identification Number is suspended, GSTR-2B for the relevant period will not be generated by the system.
• Invalid GST Returns Filing: If GSTR-1 or GSTR-5 (filed by the supplier) contains errors or is not filed for October 2024, corresponding ITC will not reflect in the buyer’s GSTR-2B.
• Incorrect Invoice Data: Suppliers failing to upload accurate invoice details in GSTR-1 or IFF (Invoice Furnishing Facility) can prevent the data from populating in GSTR-2B.
• Late Filing by Supplier: If suppliers file GSTR-1/IFF after the cut-off date (typically the 11th of the following month), the invoices will not be included in GSTR-2B for that period.
• Inter-state or Cross-supply Issues: Discrepancies in reported interstate transactions or mismatches in place of supply details can cause ITC issues.

Steps to Address Issue of GSTR-2B not generated

• Verify Supplier Compliance: Ensure suppliers have filed GSTR-1 for the respective period and provided correct invoice details.
• Recheck Filing Dates: Cross-check if GSTR-1/IFF submissions were made before the cut-off date. If late, ITC for those invoices will only reflect in the next period’s GSTR-2B.
• Review Goods and Services Tax Registration Status: Confirm Taxpayer taxpayer’s goods and Services Tax Identification Number is active and valid to avoid suspension-related non-generation.
• Check Vendor Reconciliation: Compare vendor invoices with the data reflected in your GSTR-2A/2B and address mismatches directly with suppliers.
• Seek Clarifications from GST Helpdesk: Contact Goods and Services Tax Helpdesk for technical issues, providing evidence of non-generation or missing invoices.

What actions are required for taxpayers? 

1. Quarterly Taxpayers Filers (QRMP Scheme):
   • Taxpayers under the Quarterly Return Monthly Payment (QRMP) scheme will not receive GSTR-2B for the first two months of a quarter.
   • For instance:
     • In the October-December 2024 quarter, GSTR-2B will only be generated for Dec 2024, not for Oct or Nov 2024.
   • Input Tax Credit (ITC) for October and November will reflect in the December 2024 GSTR-2B.
   • Be aware that GSTR-2B reflects Input Tax Credit only quarterly. Plan tax payments accordingly to avoid mismatches.
2. For Regular Filers:
   • Ensure suppliers upload invoices on time and file GSTR-1 for each month.
   • Regularly reconcile purchase invoices with GSTR-2A/GSTR-2B.
3. Non-filing of GSTR-3B:
   • Taxpayers who fail to file their previous period GSTR-3B will not have their GSTR-2B generated.
   • Action Required: File the pending GSTR-3B to enable the generation of GSTR-2B.
4. Rectify Pending Compliance:
   • File previous GSTR-3B promptly to enable the generation of current GSTR-2B.
   • Coordinate with suppliers to resolve discrepancies.

Impact of Non-generation of GSTR-2B:

Buyers cannot claim Input Tax Credit for Financial Year 2023-24 if the supplier fails to upload invoices by November 30, 2024. Businesses may need to pay GST in cash due to denied Input Tax Credit, impacting liquidity.

Final Deadline Reminder claim Input Tax credit

• Suppliers must upload all invoices for FY 2023-24 by November 30, 2024, to ensure buyers can claim Input Tax credit. Missing this deadline results in permanent denial of Input Tax Credit for affected invoices.
• Taxpayers and suppliers are advised to coordinate immediately to ensure all invoices are uploaded and filed by the November 30, 2024 deadline to prevent loss of Input Tax Credit for FY 2023-24