GSTR-2 Meaning, Contents and Reconciliation

GSTR-2 Meaning, Contents and Reconciliation

Guide to GSTR 2

In this post, we will discuss the GSTR 2, 2B, buyer-seller reconciliation etc. Here we will take a look at each section in detail:

Important note: The facility of filing GSTR 2 is not applicable.

What is the meaning of GSTR 2?

In general, when someone talks about the GSTR-2, they mean the monthly tax return that shows what a GST registered person bought in a given month.

As an individual who is registered under GST purchases from another registered vendor, the information filed in the GSTR-1 form will automatically be made available in the GSTN portal under the GSTR-2A form,

Individuals can use it during the filing process of their own GSTR2 returns.

Individuals should still file the return in question. They must verify any information, amend it if necessary, and can add additional details to the form which aren’t added automatically. Like, for example, If you change the information on your GSTR-2A and file it as GSTR-2, the vendor will be notified and given a chance to amend their return with the help of a GSTR-1A form.

Contents of the form GSTR 2

The government have directed 13 important Headings in the GSTR-2 format.

1, GSTN: your unique PAN-based 15 digit goods and services taxpayer identification number. GSTN will automatically generate at the time of return filing.

2, Name of the taxpayer: Legal name of the taxpayer, trade name if any

3, Inward supplies from registered taxable Person – purchases by a registered person will auto-populate here from the GSTR-1 filed by the seller. Which contains the details such as rate and amount of GST, if ITC is eligible, and the amount of ITC. also, it won’t Include purchases under reverse charge.

4, Inward supplies on which tax is to be paid on reverse charge: details about the purchased goods

That is the buyer is liable to pay GST. when an unregistered dealer sells goods worth more than RS.5000 per day to a registered dealer. Then the registered dealer is liable to pay a reverse charge. 

5, Inputs/capital goods received from Overseas or from SEZ units on a Bill of Entry :

  Any type of import of inputs or capital goods received against a Bill of Entry must be reported under this head. Goods received from SEZ as well.

6, Amendments to details of inward supplies that were supplied in returns for previous periods of taxation in tables 3,4 and 5.

it is not possible to revise any GST once filed. Revision is only possible in the coming month’s return under this heading. Taxpayers can make minor changes to details of purchases of the previous months. Possible to do it manually. in the meanwhile, the seller will also be notified regarding the changes applied.

7, Supplies availed from composition taxable persons, and other exempt/nil rated/ non-GST supplies received: 

Under this head section, taxpayers get to capture interstate and intrastate purchases made from composition vendors including exempt, nil rated and non-GST supplies from vendors at gross value 

8, ISD credit received: details of the input tax credit that you have received from a registered input service Distributor or (ISD), such as your own head office that has transferred its ITC among all its branches. This data will self-generate when ISD files the GSTR-6

9, Details about any TDS (Tax Deducted at Source) and TCS (Tax collected at source) received, such as from an e-commerce platform.

10, A statement detailing all advances made and adjustments made upon receipt of supplies.

11, Input Tax credit Reversal / Reclaim: Information about any reversed or reclaimed input tax credits.

12, Details about any reductions or additions to the output tax in the case of mismatches or other circumstances.

13, HSN summary of inward supplies – An HSN summary of your purchases would include total quantity purchased, taxable value under each tax heading, and Unit Quantity Codes (for imports).

Form GSTR-2 PDF for reference

What is GSTR-2A?

It is an auto-generated monthly statement that contains information on goods or services purchased in a given month from the seller’s GSTR-1.GSTR-2A won’t generate until the supplier files his or her GSTR-1. Since the data in GSTR-2A comes from the GSTR-1 of the seller. 

Latest updates on GSTR-2A effective from 1st February 2022:

Budget 2022 updates- 

1. ITC cannot be claimed if is restricted in GSTR-2B available under section 38.

2. The time limit to claim ITC on invoices or debit notes of a financial year is revised to the earlier two dates.

Primarily, 30th November of the following year or secondly, the date of filing annual returns.

3. Section 38 is completely updated as ‘communication of details of inward supplies and input tax credit’ in line with the Form GSTR-2B.

It lays down the manner, time, conditions and restrictions for ITC claims and has removed the two-way communication process in GST return filing on the suspended return in Form GSTR-2, it also states that taxpayers will be provided information on eligible and ineligible ITC for claims.

4. Section 41 has also been updated to remove the references to provisional ITC claims and prescribes self-assessed ITC claims with conditions 

5. Sections 42, 43 and 43A on provisional ITC claim process, matching and reversal are eliminated.

6. Section 50 stands amended for levying interest on excess ITC claims and utilisation, together with the manner of interest computation.

What is GSTR-2B?

it is an auto-populated new static statement for the regular taxpayers. You will find it on the GST portal too and it is available month-to-month.

Introduced from the August 2020 tax period. No matter how many revisions a seller makes, the details of ITC for a specific tax period remain the same. Therefore, the taxpayers can refer to the ITC appearing in this return for eligible ITC claims in GSTR-3B for a tax period.

What is buyer-seller reconciliation?

Invoice matching or buyer-seller reconciliation is the process of matching taxable sales from the seller with taxable purchases from the buyer. Due to this, ITC on purchases will be available only if the details of purchases filed in the GSTR-2 (currently in GSTR-3B) return of the buyer match with the details of sales filed in the GSTR-1 return of their seller.

For eg:- Raj buys 10 pencil boxes worth Rs 1000 from a stationery store. Now the stationery store must show RS 1000 sales in his/her GSTR-1. Raj must show the same amount of Rs 1000 purchase in GSTR-2(currently GSTR-3B) to claim ITC. unless the amounts match, Raj will not be able to claim ITC.

Currently, this reconciliation is by matching GSTR-2B and GSTR-3B. In some instances, taxpayers may need to consult GSTR-2A.

How to download GSTR-2 from the GSTN portal?

Follow the steps below:

1. log in to the GST portal 

2. Go to Services > Returns > Returns Dashboard.

3. Select the period, and click SEARCH.

4. Under Inward supplies received by taxpayer GSTR2, click PREPARE ONLINE.

5. Click Generate GSTR2 Summary to view the transactions submitted by the supplier on the GSTN portal.

6. Click BACK to return to the dashboard.

7. Under Inward supplies received by taxpayer GSTR2, click PREPARE OFFLINE.

8. In the Download Tab, click GENERATE FILE. this action generates the file.

9. Click the link Click here to download the GSTR-2 file.

10. Copy the ZIP/extracted JSON file in the folder to your computer.

This post on GSTR 2, 2B, buyer-seller reconciliation has come to an end. Share your views and opinion with us in the comment section below.