What is GSTR-2B?
GSTR 2B is an auto-populated input tax credit statement (ITC) that is generated by the GST portal for every normal taxpayer in India. The details in GST-2B are based on the information that is furnished by the suppliers in GSTR-1/IFF, GSTR-5, and GSTR-6.
GSTR-2B is generated monthly and makes it easy to claim ITC. It is the static version of the GSTR-2A as the details in the GSTR-2B do not change but are generated periodically.
GSTR-2B does not get updated after it is generated on the 14th of the next month. That means that if suppliers have filed their applicable GST documents later then it is reflected on the GSTR 2B in the next month as no updates take place in the same month.
In real life, the supplier may delay the filing of a particular document due to some reason. What happens in regards to GSTR-2B if the supplier delays filing a document such as GSTR-1? In such a case, the GSTR-2B will reflect the additional changes in the next month when the supplier files the document. The business can then claim the ITC.
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Why is GSTR 2B important for businesses?
GSTR 2B is a significant document for businesses for the following reasons.
Determine missing invoices
GSTR-2B is critical in determining if any invoices have been missed when the suppliers filed their applicable documents in the GST portal. When GSTR-2B reconciliation takes place you can determine if any invoices are missing i.e. if the suppliers did not record data of certain invoices and thereby failed to upload them to the portal.
This means that even though you have the records of these invoices in your books, they are missing from the GST portal when the GST-2B is generated.
Ideally, the invoices you have in your purchase register should match the invoices and their details available in GSTR-2B. When you find that invoices are missing from the document, you can directly speak to the suppliers and confirm the missing invoices. If they have missed them, they can add these invoices later so that the details are reflected in the subsequent month. This generally takes place when the suppliers are filing their GSTR-1 returns.
Check for invoices with errors
When you are generating GSTR 2B, you will be able to see all the invoice details uploaded by the suppliers. You can check if all the invoices have been correctly uploaded or not. Finding invoices with errors helps you find the defaulter suppliers who may not be taking the time to properly upload invoices.
If they continuously keep doing this, you may need to rethink your contract with such suppliers because incorrect invoices will create problems when it comes to GST. It is better to find new suppliers and do business with them.
It is not possible to edit the invoices uploaded by the supplier as GSTR-2B is a static document, unlike GSTR-2A, which is constantly changing. GSTR-2A reflects the changes as and when they occur, which means if the supplier uploads an invoice, it will be shown in that document.
In the case of GSTR-2B, the changes are not reflected until the next month which is why businesses must check invoices and determine whether they have any errors. Constant erroneous invoices can attract interest and penalties.
Check for invoices that are not accounted for in books
Invoices may be missing in the books even though they are present in the GSTR-2B form in the GST portal. That is, invoices may have been uploaded by your suppliers, but you cannot find them in your purchase register. This can occur when the period of reporting invoices in general is different for your supplier and you, the buyer. This difference in the period of accounting can make a big difference in when the invoices are uploaded and your purchase registered. Additionally, you may not have accounted for debit or credit notes by the supplier which can cause a mismatch during reconciliation.
Accurate GST payment (no short or excess payment)
When you are making a GST payment, you need to ensure you are paying the right amount due. Paying too much or paying too less will create problems for you later on as adjustments will need to be made in either of the cases. By reconciling GSTR 2B, you know that you are making accurate GST payments on the GST portal at the right time. This prevents you from incurring any fines and saves time by ensuring convenience and efficiency. This simplification makes it easy to file your returns.
Avoid double claim
Another benefit of GSTR 2B is that it will prevent you from claiming ITC twice, which can occur if you don’t reconcile. This used to be a problem earlier (before the GSTR-2B) provision was rolled out. Through GSTR-2B reconciliation you can track exactly which invoices have been used for claiming ITC. Accordingly, you can keep a tab on those invoices and ensure you don’t claim ITC on these but instead claim on the remaining invoices for which ITC has not been claimed. This makes the process simpler and faster.
The latest release of TallyPrime
The latest release of TallyPrime introduces a connected GST experience, enabling businesses to handle a wide range of GST activities directly within TallyPrime. From uploading invoices to filing returns and reconciling data, this new release streamlines the entire process. Here's a list of features in the latest release of TallyPrime:
- One-click GST reconciliation: Automatically download and reconcile GSTR-2A/2B, GSTR-1, and GSTR-3B data for seamless reconciliation.
- Direct upload of GST invoices and Returns: Upload GST invoices and returns effortlessly via connected services.
- Direct filing and signing of GSTR-1: File and sign the GSTR-1 return directly from TallyPrime, simplifying compliance.
- Enhanced outstanding reports: Gain insights on ITC at-risk with improved outstanding reports.
- Automated ledger creation : Fetch, validate, and create ledgers using GSTN, ensuring accuracy and compliance.
Read More:
- What is GST Reconciliation
- What is GSTR-2A Reconciliation
- Why is GSTR-2A Reconciliation Important for Businesses
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