Difference Between GSTR 2A and 2B Reconciliation

Difference Between GSTR 2A and 2B

GSTR-2A and 2B are two types of GST returns that businesses are required to file every month. These returns are important for businesses to claim an input tax credit (ITC) on their purchases. GSTR-2A is a read-only, auto-populated document that provides a detailed view of all purchases made. GSTR-2B, on the other hand, is a summarized view of the input tax credit available to taxpayers for a specific tax period issued by the GST portal. Though the two may sound similar, they have a few key differences that businesses should be aware of. In this article, we will look at the difference between GSTR 2A and 2B, GSTR-2A and GSTR-2B comparison, GSTR-2A and GSTR-2B for the input tax credit, GSTR-2A and GSTR-2B reconciliation, GSTR-2A and 2B Importance, and much more.

Understanding GSTR-2A and GSTR-2B

GSTR 2A

GSTR-2A is an auto-populated read-only document that provides a detailed view of purchases made. GSTR-2A includes the supplier's GSTIN, invoice number and date, HSN or SAC code, taxable value and tax amount (CGST, SGST, IGST, and Cess), location of supply, and ITC eligible and ITC claimed information. GSTR 2A provides details about the goods and/or services purchased from the supplier. Furthermore, after your supplier files his GSTR 1, the data in GSTR 2A will be available on the GST Portal. GSTR-2A captures a taxpayer's purchases and allows for the claim of input tax credit (ITC).

GSTR 2B

GSTR-2B is another form generated by the GSTN portal. It is made available to taxpayers on the 12th of the next month. GSTR-2B gives an account of the ITC available to the taxpayer based on the information provided by suppliers in their GSTR-1 filings. It describes the ITC available under GSTR-2A, the ITC available under Import of Goods, the ITC available under Import of Services, the ITC available under ISD credit, the ITC available under TDS credit, the ITC available under TCS credit, and the ITC available under any other ITC credit.

GSTR-2A vs GSTR-2B: Know the Key Differences

The Key differences between GSTR-2A and GSTR-2B are as follows:

1. Timing of Availability:

GSTR-2A is available for viewing and download in real-time, as it is auto-drafted by the GSTN portal based on the data furnished by suppliers. On the other hand, GSTR-2B is made available on a monthly basis, around the 12th of the following month.

2. Information Inclusion:

GSTR-2A includes all the invoices and credit/debit notes received by the taxpayer during a particular tax period. GSTR-2B, however, excludes certain types of invoices, such as those related to imports, supplies from units under special economic zones, or those covered under the reverse charge mechanism.

3. GSTR 2A and GSTR 2B Amendment:

GSTR-2A can be amended by implementing changes to GSTR-1 For example, the ITC of X under GSTR-2A for January 2021 is INR 10,000 as of February 28th, 2021. Supplier files GSTR-1 for January on March 15, 2021, with ITC for X of INR 2,000.GSTR-2A will be updated in January 2021 to reflect an ITC of INR 12,000.

GSTR-2B cannot be amended and remains fixed for the duration of the tax period. For example, the ITC of X under GSTR-2B for January 2021 is INR 10,000 as of February 28th, 2021. Supplier files GSTR-1 for January on March 15, 2021, with ITC for Z of INR 2,000. The GSTR-2B for January 2021 will stay unchanged, and the ITC of INR 2,000 will be integrated into the GSTR-2B for March 2021. As a result, under Rule 36(4), X is entitled to claim ITC of INR 2,000 in March 2020.

4. Input Tax Credit (ITC) Availability:

GSTR-2A helps businesses determine their total ITC availability, as it provides a comprehensive view of invoices uploaded by suppliers. GSTR-2B, on the other hand, simplifies the process by categorizing ITC into eligible and non-eligible components, making it easier for taxpayers to claim their credits accurately.

5. Data Source:

Form GSTR-2A collects data on the basis of returns filed by the supplier in Form GSTR-1; Form GSTR-5; Form GSTR-6; Form GSTR-7 and Form GSTR-8. Whereas, Form GSTR-2B compiles data from Form GSTR-1; Form GSTR-5, and Form GSTR-6 filed by the supplier.

GSTR-2A and GSTR-2B Comparison

Importance of GSTR-2A and GSTR-2B for GST Compliance

• Reconciliation and Error Identification:

Businesses can use GSTR-2A to reconcile their purchases with the information provided by their suppliers. Differences or mismatches between GSTR-2A and GSTR-2B can aid in the identification of errors or omissions, which can subsequently be corrected.

• ITC Eligibility:

Since GSTR-2A provides an in-depth analysis of all purchases done during a tax period, it assists businesses in determining their ITC eligibility. GSTR-2B simplifies the procedure even further by classifying eligible and non-eligible components, ensuring correct ITC claims.

• Amendments and Adjustments:

GSTR-2B enables taxpayers to make necessary changes to the data received, allowing businesses to correct any errors or omissions in the original papers.

Significance of GSTR-2A and GSTR-2B Reconciliation 

For numerous reasons, GSTR-2A and GSTR-2B reconciliation is essential-

1. Reliable ITC Claims: Reconciliation guarantees that taxpayers' ITC claims are correct and based on reliable data. Taxpayers can detect and correct any errors by comparing the information in GSTR-2A and GSTR-2B to their records. This helps to keep correct records and eliminates problems during tax audits or assessments.
2. GST Regulations Compliance: The reconciliation of GSTR-2A and GSTR-2B is a requirement under GST law. Taxpayers are expected to appropriately balance their purchases and claim Input tax credit (ITC) as non-compliance may result in sanctions or legal implications.
3. Eliminating Cash Flow Issues: Proper reconciliation ensures that taxpayers do not claim excessive or ineligible ITC, which could result in cash flow problems. By reconciling GSTR-2A and GSTR-2B, taxpayers can detect and correct any differences in their ITC claims, saving them money.
4. Improved Business Ties: GSTR-2A and GSTR-2B reconciliation also aids in the development of better ties between taxpayers and suppliers. Verifying the information in GSTR-2A with the invoices and records of suppliers can help to resolve errors or concerns quickly, resulting in smoother business transactions and stronger partnerships.

GSTR-2A and GSTR-2B for Input Tax Credit

According to rule 36(4) of the Central Goods and Services Tax (GST) Rules, 2017, an individual can now claim Input Tax Credit on GST in respect of invoices/debit notes reported by the supplier in Form GSTR-1 or invoice furnishing facility. In view of the preceding rule 36(4) clause, the fundamental question is whether ITC should be claimed on the basis of GSTR-2A or GSTR-2B.

The question is whether to use Form GSTR-2A or Form GSTR-2B as a base for completing the provisions of Rule 36(4). Because Form GSTR-2B is static, it can be utilized as a foundation. Notably, the GST system is now auto-reflecting input tax credit amounts in Form GSTR-3B in accordance with Form GSTR-2B. Reconciliation based on GSTR 2A and comparison reports based on GSTR 2B are undoubtedly options that taxpayers can consider in order to maximize their ITC claim.

Conclusion

GSTR-2A and 2B are two key forms in GST compliance that assist businesses in accurately reporting their purchases and determining their eligibility for Input tax credit (ITC). GSTR-2A provides real-time information on all invoices supplied by suppliers, whereas GSTR-2B simplifies the process by categorizing eligible and non-eligible components. Both forms contribute to effective purchase reconciliation by identifying any discrepancies or concerns that need to be resolved. Understanding the difference between GSTR 2A and 2B allows taxpayers to ensure accurate and compliant GST return filing, avoiding penalties and maintaining a clean GST compliance record.

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