GSTR-2B- Guide to Automatically Generated ITC Statement

• GSTR-2B is generated automatically every month, completely based on the information filed by the suppliers. This eliminates the manual effort needed for reconciliation purposes.
• It makes the task of claiming ITC easy for them and makes compliance easy.
• GSTR-2B identifies the eligible and non-eligible ITC so that only the ITC that are allowed can be claimed per the GST law.
• With the introduction of GSTR-2B, the process of matching ITC claims with GSTR-3B returns has been simplified, reducing the chances of mistakes and mismatches.

After the goods and services tax (GST) was established in India, the system continued evolving, ensuring better compliance and easy tax return filing. This development introduced GSTR-2B, which is an auto-drafted input tax credit (ITC) statement aimed at helping businesses claim accurate ITC.TheGSTR-2B provides taxpayers with a clear, consistent, and structured statement of their eligible and ineligible ITC for each tax period. Let's understand it in detail.

GSTR-2B is an auto-generated statement of input tax credit (ITC) introduced to general taxpayers on the GST Network (GSTN). It is generated on the 14th of every month based on the invoices and debit/credit notes submitted by suppliers in their GSTR-1, GSTR-5, and GSTR-6 returns.It gives an overview to the taxpayer on eligibility and ineligibility of ITC for each tax period, thus enabling businesses to ensure proper claims without errors. It simplifies GST reconciliation, which would minimise the chances of erroneous claims of ITC as well as non-compliance issues. Also Read - Find out how to check your GST return status

TheGSTR-2B will make the input tax credit for purchases by normal taxpayers and non-resident taxable persons available. In addition, the input tax credit distributed by the input service distributor will also be available.Below is a description of the details in GSTR-2B:

• A summary showing whether ITC is available or not for each region.
• Each advisory for a section describes the kind of action needed from taxpayers.
• The facility to read and download information specific to documents, such as invoices, credit notes, debit notes, and amendments.
• Due dates and instructions for preparation and usage of GSTR-2B.
• Imports of goods and imports from SEZ (special economic zone) developers and units (released beginning with GSTR 2B in August 2020).

There are two types of categories for the GSTR-2B form:

Information regarding inbound supplies, credit-debit notes (CDN), including amendments, and import of commodities is divided into four parts in PART-A of ITC Available.ITC for registered persons' supplies, ITC from ISD, and ITC for imports and inbound supplies on reverse charge. PART-B, being ITC Reversal, has a section called "Others" that contains information regarding credit notes and amendments.

Purchase invoice or CDN information, with or without changes, is split into three parts in PART-A of ITC Not Available. ITC for reverse charge inward supplies, ITC from ISD, and all other ITC for supplies made by registered individuals. Under the "Others" heading in PART-B, though, there are CDN details as well as changes.The following circumstances will cause the input tax credit to be marked as "not available":

• The time limit for receiving an input tax credit on an invoice or debit note has expired under section 16(4) of the CGST (Central Goods and Services Tax) Act (before September 30 of the subsequent year from the fiscal year or the annual return filing date).
• Where the recipient is not eligible for an input tax credit against an invoice or debit note given for the supply of goods or services, or both, and the supplier and place of supply are in the same state while the recipient is in another state.

Features of GSTR-2B Some of the significant features of GSTR-2B are as follows:

• You can view and download the PDF version of the summary statement
• Immediate section-by-section information or the entire ITC can be downloaded
• Section-by-section guidance is provided
• The form facilitates the search for all records generated
• It can view, filter, and sort data based on requirements
• Columns may be hidden or displayed according to your choice
• Full download of GSTR-2B is an option, along with increased search when the file contains over 1,000 records
• An email or SMS notification will be sent to the taxpayer informing them that GSTR 2B has been created
• It displays only the records that suppliers and ISD have uploaded in their GSTR-1/5/6.

Benefits of GSTR-2B The benefits of the GSTR-2B for the taxpayers are as follows:

• Reduce ITC errors : Since ITC is automatically computed, there are fewer chances to claim an excess or non-eligible one
• Curbing tax mismatches : Businesses can reconcile their ITC with suppliers' filings and, as a result, reduce mismatch notices from the tax authorities.
• Efficient GST Compliance : Due to effective ITC disaggregation, GSTR-3B filing becomes leisurely and swifter.
• Reconciliation made easier : Enables fast matching of purchase data with auto-populated details, thereby reducing manual handling.
• Assistance while preparing for an audit: Since GSTR-2B is static, businesses can hold onto records for audits and future reference.

The GSTR-2B has been in operation since August 2020. It started getting generated by recipient taxpayers on the 12th of the month following the tax period until January 2021.
Ex- GSTR 2B for August 2023 will be available on September 12, 2023.Beginning in January 2021, taxpayers are expected to generate GSTR-2B for a tax period available on the 14th of each month. For example, GSTR 2B for October 2023 is very likely to be made available on November 14, 2023.You can view the timeframes for generating GSTR-2B on the Government Portal using the "View Advisory" option.

The differences between 2A and2B are shown below in the table:

The GSTR-2B is an absolute output ITC statement, while the GSTR-2A is more of a tool for tracking purposes. For enhanced GST compliance, businesses must use both statements together.

Here are the steps to view the GSTR-2B statement online:

• Visit the GST board login portal
• Go to Services > Returns > GSTR-2B
• Select the return period and download the report
• Examine details of eligible and ineligible ITC
• Before finally submitting it, compare it with GSTR-3B.

You can find your GST liability using the GST calculator , an online tool for GST calculations. Enter the relevant details and find the tax payable for hassle-free return filing. Also Read - Here are some disadvantages of GST