GSTR 2B: What it is and everything you need to know

In the complex landscape of Goods and Services Tax (GST) filing, understanding GSTR 2B is crucial for businesses striving for compliance and efficiency.
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2 min read
07 October 2023

In the world of GST filing, it is important to keep yourself updated on all the recent changes and trends. One of these recent changes is the introduction of GSTR 2B. This article will provide you with all the necessary information about GSTR 2B, including what it is, its importance, and how to file it on time.

What is GSTR 2B?

GSTR 2B is a document that lists all the purchases made by a registered person from a particular GST number in the form of an input tax credit (ITC). It is an auto-generated document generated by the GSTN portal, intended to ease the reconciliation process. It is akin to the GSTR-2A form, based on which the buyer can claim an input tax credit. In short, GSTR 2B provides the buyer with an overview of the total purchases as recorded in GSTR-1 and GSTR-5A. This document is generated on the 13th day of every month for the previous month.

When was GSTR-2B made available?

GSTR-2B was made available to taxpayers from 12th August 2020. The GSTR-2B is an auto-drafted input tax credit (ITC) statement that provides a summary of the ITC available to a taxpayer based on the GSTR-1 and GSTR-3B returns filed by his/her suppliers. It helps the taxpayer in reconciling their ITC on a regular basis.

Features of GSTR-2B

  • Comprehensive ITC summary: GSTR-2B provides a detailed monthly summary of a taxpayer's input tax credit (ITC).
  • Supplier invoice details: It includes information on supplier invoices, allowing businesses to track and verify transactions easily.
  • Credit note documentation: GSTR-2B covers credit notes, offering a complete picture of adjustments and ensuring accurate reconciliation.
  • User-friendly interface: The return is designed with a user-friendly interface, enhancing ease of use for taxpayers.
  • Simplified compliance: GSTR-2B streamlines the compliance process, making it more straightforward for businesses to meet regulatory requirements.
  • Efficient reconciliation: Businesses can efficiently reconcile their input tax credits, ensuring accuracy and financial integrity.

Why is GSTR 2B important?

GSTR 2B holds significance for buyers as it provides them with a consolidated overview of all their purchases. This consolidated view aids buyers in reconciling their purchase data and recovering any overlooked Input Tax Credit (ITC). Additionally, this document supports buyers in maintaining accurate accounting records and a comprehensive record of their GST purchases.

Another important point is that the GSTR 2B document provides information about the credit availability of a buyer at an early stage. This information ensures that buyers can take the necessary steps in time to maximise their benefits and avoid any GST-related penalties.

GSTR-2A vs. GSTR-2B

GSTR-2A and GSTR-2B are both components of the Goods and Services Tax (GST) system, but they serve distinct purposes.

Aspect

GSTR-2A

Nature

Auto-generated statement available to recipients

Source

Derived from suppliers' GSTR-1

Timing

Updated periodically, often monthly

Basis for ITC

Reflects all invoices uploaded by suppliers

Reconciliation

Requires manual reconciliation with purchase records

Finality

Does not constitute a final ITC statement

Role

Helps in verifying ITC claimed by recipient

Compliance Ease

Requires regular monitoring and reconciliation


How to file GSTR 2B?

The filing procedure of GSTR 2B is relatively straightforward and integrates with the usual GST filing process. As GSTR 2B is auto-generated on the portal, buyers can access it from their GST account. Once they have verified the document, they can claim the available ITC.

To file the GSTR 2B form, follow these simple steps:

  • Log in to the GST portal and go to the "Return dashboard."
  • Select FY, return filing period, and return filing type and click on the 'search' button.
  • Go to the 'return' section and click on GSTR-2B.
  • Verify the details provided in GSTR-2B, and click on the "File" button. 
  • Submit the return using an e-signature or through EVC (Electronic verification code).
  • After submission, the GST portal will auto-populate the ITC in your electronic tax ledger if it finds everything in order.
  • After this, make payment of the remaining tax, if any.

GSTR 2B is an essential document in the GST filing process, providing buyers with a consolidated view of their purchases. The document helps in reconciling purchase data, claiming missed ITC and maintaining accounting records. Moreover, GSTR 2B helps in early planning to maximise benefits and avoid penalties. By understanding the importance and filing procedure for GSTR 2B, you can stay on top of your filing obligations and simplify the reconciliation process.

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Frequently asked questions

When is GSTR 2B applicable?

GSTR-2B is a monthly auto-drafted return for businesses that are registered under the Goods and Services Tax (GST) Act. It shows the input tax credit that a business is eligible to take based on the supplier’s invoice. The GSTR-2B return is automatically generated on the 12th of every month for businesses that have filed their GSTR-1 and GSTR-3B for the previous month.

Is GSTR 2B mandatory?

No, GSTR 2B is not a mandatory return. It is an auto-drafted return generated for businesses registered under the Goods and Services Tax (GST) Act and is intended to provide businesses with information on the input tax credit available based on the supplier's invoice. However, it is recommended that businesses monitor their GSTR 2B to ensure proper utilisation of the input tax credit.

What is the relationship between GSTR 2B and GSTR 3B?

GSTR 2B is a monthly return generated for businesses registered under the Goods and Services Tax (GST) Act, which shows the input tax credit available based on the supplier's invoice. GSTR 3B is a monthly summary return filed by businesses, showing the total sales, purchases, input tax credit claimed, and tax liability. GSTR 2B data is used to calculate the input tax credit to be claimed in GSTR 3B.

Why is there a difference between GSTR-2A and 2B?

There is a difference between GSTR-2A and 2B because they serve different purposes. GSTR-2A is an auto-generated input tax credit (ITC) statement that contains details of purchase-related transactions uploaded by the suppliers in their respective GSTR-1 forms. It shows the Recorded ITC based on the supplier's returns. Whereas, GSTR-2B provides the taxpayers their Eligible ITC taking into consideration the credit available on invoices and debit notes received by the recipient, which is updated at mid-month and month-end intervals.