In today’s dynamic business era, staying updated about Goods and Services Tax (GST) regulations is crucial for every business. GSTR-2 B offers seamless features which help businesses increase transparency between you and the vendors. However, there are some things to remember to use GSTR- 2B for GST compliance.
The following tips can be used to utilize GSTR- 2B for GST compliance effectively.
1. Check if the Invoice is Correct:
When you get an invoice from your suppliers, it is important to check if it is valid with all the details printed on it. After the e-invoice mandate (businesses with over Rs. 50 Cr turnover has to follow e-invoicing), you must be aware to check if e-invoicing applies to your vendors. However, there is no prescribed list for it, but it is recommended to take a declaration from all the vendors that can come in handy for any future ITC claim complexities.
2. Check if the QR Code is Valid
For the vendors who fall under the e-invoicing mandate, expecting a proper e-invoice with IRN and QR code printed on it is important. The government of India has also made it compulsory to add a QR code on B2C invoices from 1st April 2021 for vendors having a turnover of over 500 Cr.
3. Check if the invoice appears in your GSTR- 2A
Typically, an invoice will have IRN on it. But you must check that if an invoice is saved again by the supplier, then the IRN will not be auto-generated. Hence ensure that the IRN on the physical copy is valid. And if the invoice is cancelled, it will not be available in the GSTR- 2A.
4. Check if the invoice also appears in GSTR- 2B
After the recent developments, this aspect is crucial. At the time of invoice generation, registering on the IRP portal and printing on IRN and QR code on the invoice is important, and it is important that the vendor also uploads the invoice on the government portal before the 12th of every month and fills their GSTR- 1 on a timely basis.
5. Follow up on the Missing Invoices
There can be cases where you have recorded invoices in your purchase register which are not reflected on your GSTR- 2A or 2B. In such cases, you must follow up with the vendor quickly so that the missing invoices can be uploaded on time and the vendor is reminded to file the return on time.
6. Check if the ITC is eligible
The invoices available in GSTR- 2B show the data uploaded by the supplier, including invoice details like invoice number, date, place of supply, invoice value, and line item details like tax rate, tax amounts, etc. GST data should be taken as a general rule for computing ITC available; the critical data points that determine the eligibility of invoices for ITC purposes are:
- Place of supply, only if same as taxpayers’ state, then ITC on such invoices is available.
- Filing status of the vendor
- If covered under reverse charge.
7. Check if you can claim ITC
Some additional factors need to be considered to determine the claimable ITC from the available ITC. GST Reconciliation is required to ensure the data in your records and as uploaded by the supplier is a match. Ensuring that the claimable amount should not be ineligible because of any of the vendor’s mistakes is also crucial.
8. Check if the ITC has already been claimed
If you claim ITC on a provisional basis, you must ensure that you do not claim ITC again when your supplier reports the invoice and starts showing in your GSTR- 2A and GSTR- 2B.
9. Check if the Vendor’s Payment is Made After 6 Months
Invoice updated by the vendor, shown in GSTR- 2A and 2B, and you have claimed ITC. But suppose you fail to pay the vendor within six months of the transaction. In that case, the ITC needs to be reversed because a recent introduction of a communication channel on the GST portal informs vendors about recipient cases when the payment has not been received. But as a recipient, you may get this notification; the data also remains in the GST system and can come under the exchequers’ radar.
Read more: GSTR- 2B: Everything You Need to Know
The Bottom Line
By implementing the tips mentioned above, you can effectively enhance your GST compliance process by using GSTR- 2B and identify discrepancies, reduce errors, and avoid penalties.
Frequently Asked Questions (FAQs)
1. As a taxpayer, do I have to file Form GSTR- 2B?
No, you don’t have to file Form GSTR- 2B because it is a read-only static document. It is an auto-generated ITC statement indicating ITC’s availability against each document filed by your vendors and ITC received through ISD.
2. What is the use of Form GSTR- 2B?
The taxpayers can use Form GSTR- 2B to take the correct ITC in respective sections of Form GSTR- 3B.