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ITC now only for amounts reflected in GSTR 2B
We are aware of the change in Input Tax Credit Availment Rules of the entitlement eligibility from GSTR 2B w.e.f. January 1, 2022,
- Almost each business is concerned about having to implement a new system of Input Tax Credit reconciliation as part of their usual day-to-day operations.
- When you try to reconcile your input tax credits manually, it becomes difficult. Businesses are searching for alternative solutions to assist them complete reconciliations fast in the wake of this Amidst this sudden change.
- A new return form, Form GSTR-2B, was introduced on the recommendation of the GST Council Meeting on March 14, 2020.
- It's an input tax credit (ITC) statement for a GST-registered person that's auto-populated.
Radical change brought in by the Government in the way you claim ITC in GSTR 3B.
- With effect from 1st of January 2022, you can now only avail GST equivalent to the No that is reflected in GSTR 2B as compared to the earlier case of GSTR 2A. This means you can only avail ITC of amounts that have been filed by your seller.
- This change means that filing of the return by your seller is now compulsory for you to get your ITC claim, which was not the case earlier.
- The 5% markup allowed by the Government has also been removed!
- It will be prepared using information provided by suppliers in their respective returns, such as Form GSTR-1, GSTR-5 (non-resident taxable person), and GSTR-6 (non-resident taxable person) (input service distributor).
- The input tax credit cannot be used twice on the same document. Wherever required, the tax credit is reversed in accordance with GST regulation in their GSTR-3B.
- GST is correctly paid on a reverse charge basis for the applicable documents, including import of services
- Goods and Services Tax is duly paid on a reverse charge basis for the applicable papers including the import of services,
- It is a static statement that will be available once a month, on the 12th of the next month.
Advantage of GSTR-2B
- Helps to minimize GSTR return Errors.
- It support or help in decreased of time taken for making GSTR Return.
- Helps in GST reconciliation.
- Simplification of the compliance (filing of returns).
What are the GSTR-2B details contained?
- Summary statement showing the available and non-available ITC under each section.
- Details related with import of goods from ICEGATE system, including inward supplies of goods received from Developers/ Special Economic Zones (SEZ) Units.
- The information/Document details of all invoices, debit notes, credit notes etc.
- Form GSTR-2B has been made available on the GSTR Portal on a trial basis in from the month of for July.
Amendments made in GSTR-2A
2 tables have been newly introduced in Form GSTR-2A, details are mention below :
- Inward supplies made from developers or special economic zones (SEZ) units.
- Displaying details of import of goods.
GST Registered persons can also view their sale bill of entries datails which is received by GSTN from ICEGATE System.
How does this affect your business?
- It has a direct and big impact on your business as you will now have to take care of the fact that return filings are being done by your sellers. If your sellers miss out on payments, this will directly have an impact on your working capital!
- You will also have to take care of the due dates, and missing those would mean your customers will not be able to avail of the ITC.
Comparison of GSTR-2A with GSTR-2B
GSTR 2B and GSTR-2A can be different are as below :
|
Comparison Parameters |
GSTR-2B |
GSTR-2A |
|
Goods and Services Tax Network advisory on Input Tax Credit claims |
GSTR- 2B Contains an advisory against each section on whether the Input Tax Credit is eligible, ineligible or reversible, for the taxpayer to take action accordingly in his GSTR-3B |
GSTR -2A Does not contain information/advisory on the action a taxpayer is supposed to take |
|
When will Input Tax Credit entries get reflected from different sources? |
GSTR-1, GSTR-5, or GSTR-6: Filed |
GSTR-1: Saved/filed/submitted GSTR-6: Submitted GSTR-7 & GSTR-8: Filed |
|
Maximum Input Tax Credit entries viewable on GST portal without excel download |
It have 1,000 rows |
It is 500 rows |
|
Statement Type |
A constant auto-drafted statement that provides Input Tax Credit details to every recipient of supplies, based on the suppliers’ data. |
A progressive auto-drafted statement that provides Input Tax Credit details to every recipient of supplies, based on the suppliers’ data. |
|
Statement Nature |
It is Static by nature, as the GSTR-2B for one month, cannot change based on future actions of the supplier. |
It is Dynamic by nature, as it changes from day to day, as and when a supplier uploads the documents. |
|
Availability Frequency |
Monthly |
Monthly |
|
Due date for entries, to view the statement for a tax period |
Timeline is 11th/13th of the Next month (every thing is depending on the kind of GSTR Return). GSTR-2B statement will be generated on 14th of the Next month |
Due date for entries Not applicable, as GSTR-2A is a dynamic statement |
|
Information Source |
GSTR-1 or Invoice Furnishing Facility*, GSTR-5, GSTR-6, GSTR-8, ICES, GSTR-7 |
GSTR-1 or Invoice Furnishing Facility*, GSTR-6, ICES, GSTR-5 |
**An Invoice Furnishing Facility (IFF) has been implemented for QTRlY GSTR-1 filers to upload their supply invoices so that the supply recipient can continue to claim ITC.
