Introduction of GST has introduced a brand new return filing process. There are a lot of GST returns but not every return is for everyone. GSTR 2 is one of the many returns.
Have questions about GSTR 2 and don’t know how to file it? Find answers to all your questions here along with a step-by-step filing guide.
What is GSTR 2?
GSTR 2 is a monthly return which records the details of inward supplies during the month. It is compulsory to file GSTR 2 even if you did not have any inward supply transactions during the month. A NIL return will be filed in such case.
Who needs to file it?
Every registered person with inward supplies needs to file it. However, the following persons are exempt from filing it.
- Input Service Distributors
- Composition Dealers
- Non-resident taxable person
- Persons liable to collect TCS
- Persons liable to deduct TDS
- Suppliers of OIDAR
The reason for exemption is that these persons have separate specific returns to file.
What is Buyer-Seller Reconciliation?
Also known as invoice matching, it means matching the sales made by the seller by the purchases made by the buyer. The sales and the purchases here only mean the taxable sales and purchases.
It is an important part of the entire GST return filing process. This is because it is possible to claim Input Tax Credit (ITC) only when purchase details in GSTR 2 (filed by buyer) match with sale details in GSTR 1 (filed by a seller).
What is the Last Date?
The last date for filing GSTR 2 has been extended. The due date for the month of July has been extended to 31st October 2017. The due date for the month of August is yet to be notified. For the month of August, the new due date is 6-10th October 2017. September onward, the due date will be 15th of next month.
You can check the CBEC notification below.
What details do I need to provide?
Similar to GSTR 1, GSTR 2 consists of 13 sections. Given below are step-by-step instructions on filling every section.
GSTIN and Other Details
GSTIN stands for Goods and Services Taxpayer Identification Number. It is a PAN based number which is auto-populated at the time of return filing. The Legal Name and/or Trade Name will auto-populate from the GSTIN.
Inward Supplies from Registered Person
Here you need to fill details of all purchases from a registered person except for purchases on which reverse charge is applicable.
Most entries in this column will auto-populate from GSTR 1 filled by the seller. However, there may be cases where the supplier either fails to file GSTR 1 or fails to fill a particular transaction. In both these cases, entries will not auto-populate.
But, there is nothing to worry about as the buyer will be able to add these entries manually
Purchases on Which Reverse Charge is Applicable
There are certain items and transaction where the buyer needs to pay the amount of GST. Details of such items and transactions will be entered here.
Below you can find all such transactions/instances where reverse charge will apply.
- Supply by unregistered person to a person registered under GST (if supply is more than Rs. 5000 in a day)
- Supplies by E-commerce operators
- Supply of notified goods and services
Inputs or Capital Goods received from Overseas/SEZ
If you have purchased inputs or capital goods from another country or from a Special Economic Zone (SEZ) against a Bill of Entry, this is where you need to fill all the details.
Amendments to Earlier Returns
This section allows you to rectify/revise details filled in earlier returns. Since you cannot revise a GST return, this is the only way to rectify any mistakes in returns filed for earlier tax periods.
You also need to fill details of all debit or credit notes issued during the tax period as well as amendments to debit/credit notes of earlier periods.
Supplies from Composition Taxable Person
You need to report both inter-state and intra-state purchases from composition taxable persons here. Any purchase of exempt goods and services, Non-GST items, and Nil-rated items will also be reported here.
Below is a list of Non-GST items.
ITC from Input Service Distributor (ISD)
This section will contain details of input tax credit received from an ISD which auto-populate from GSTR 6.
TDS and TCS Credit
Details of any tax credit in respect of tax deducted at source will auto-populate from GSTR 7 filed by the deductor. You need to fill this section if you have undertaken any transaction where tax was deducted at source.
Similarly, details of tax credit in respect tax collected at source will auto-populate from GSTR 8. This section is relevant for sellers listed on E-commerce sites as the E-commerce operators collect tax while making payment to sellers listed on their portal.
Advances Paid or Adjusted
It consists of 2 sections.
First, part will include details of advance tax paid on reverse charge basis and will contain the following.
- Advance tax on reverse charge basis for the current month (both inter-state as well as intra-state purchases)
- Advances paid in earlier months for which invoice is received in the current month (both inter-state as well as intra-state purchases)
The second part will contain details of amendments (if any) to the above information relating to earlier months.
Input Tax Credit Reversal/Reclaim
Any reversal or reclaim of Input Tax Credit will form part of this section. There are additions and reductions according to different rules, details of which you can find below.
Rule 37 (2)
Invoices not paid within 180 days of issue.
Rule 39 (1) (j) (ii)
A proportionate amount of input tax credit to be reversed when a supplier issues a credit note to the Input Service Distributor. This will be added to the output tax liability of the taxpayer.
Rule 42 (1) (m)
ITC relating to that portion of goods or services which were used for personal purposes.
Rule 43 (1) (h)
Same as above, but in respect of Capital Goods.
Rule 42 (2) (a)
Calculation of this amount takes place after the filing of an annual return. If the amount of ITC reversed is less than the ITC on inputs for exempt/non-business purposes, then this difference will be added to the output tax liability.
The taxpayer will also have to pay interest on the above amount.
Rule 42 (2) (b)
If the ITC on exempt/non-business purpose inputs is less than the ITC reversed, then the difference will be available as ITC.
Adjustments in Output Tax
Any addition or reduction in output tax liability due to mismatch or any other reason will form part of this section. All adjustments on account of invoice/credit note/debit note mismatch, negative tax liability for earlier periods or advance tax paid for earlier periods will be made here.
HSN Summary of Inward Supplies
In this section, you need to provide the HSN code of goods along with their description. For businesses with turnover up to Rs. 1.5 Crores, providing HSN codes is optional. Description, however, is compulsory in all cases.
In Column No. 4, Unique Quantity Code needs to be filled. It is compulsory to provide it in the correct Unit of Measure (UOM). You can find the list of UOM below.
This is last part where all you need to is sign the declaration saying that all information in the return is correct.
Is GSTR 2A a separate return or a part of GSTR 2?
GSTR 2A is not a separate return. Nor is it part of any other return. In simple terms, it’s a document serving a viewing and verification purpose.
GSTR 2A is auto-populated from GSTR 1, 5, 6, 7, and 8 (depending on the type of return) and becomes available for viewing. It is a statement of inward supplies for the receiver of supplies. GSTR 2A will remain available for viewing till the time the receiver files GSTR 2.
It has 3 sections.
Auto-populates from GSTR 1/5.
Auto-Populates from GSTR 6.
Auto-populates from GSTR 7/8 and contains details of TDS and TCS credits.
When it comes to viewing/verifying details from GSTR 2A, keep the following in mind.
- GSTR 2A is a read-only document. But, if the supplier has filed their return, you will be able to take action on the details available in GSTR 2A. This means that you will be able to accept or reject the invoices uploaded by the supplier.
- Unless the supplier files their return, you will be able to view the details in GSTR 2A but will not be able to take any action.
- You can also download a copy of your GSTR 2A for ready reference in the future.
- It is not possible to add/amend an invoice in GSTR 2A. A change to an invoice or addition of one is possible only while filing GSTR 2.
- You will receive an email as well as an alert in your login portal whenever a new entry auto-populates into GSTR 2A.
How to File GSTR 2?
At present, there are two ways to file GSTR 2.
Online Filing through GST Portal
You can do this by logging onto your account on the GST common portal.
It’s an easy 4 step process.
Log in to your account on the GST common portal.
Fill the relevant information according to the type of return.
Verify auto-populated information and add or edit details, if necessary.
Digitally sign the return using digital signature of the authorized person.
GST Suvidha Providers (GSPs)
The Suvidha Provider will prepare and upload your return using any of the above methods. You need to provide all relevant details to the Suvidha Provider to facilitate filing of returns.
Can I revise GSTR 2?
It is not possible to amend or revise GST Returns. If you wish to amend your GSTR 2, you can do it while filing next month’s return.
There are specific columns in the GST Return forms for submitting details of amendments, if any.
What if I don’t file GSTR 2?
If you fail to file GSTR 2 on time, there is a penalty of Rs. 100 per day. Combine CGST and SGST and this penalty will reach Rs. 200 per day. There is no penalty in respect of IGST and the maximum chargeable penalty is Rs. 5000.
In case of non-filing of GSTR 2, you may also receive a default notice under section 46 of the CGST Act and will be liable to pay the tax amount along with interest on the outstanding amount.
Not only this, if you do not file GSTR 2, filing GSTR 3 will not be possible as GSTR 3 is an auto-populated return which picks up details from GSTR 1 and GSTR 2.
So, don’t be late in filing your GSTR 2 and don’t be a defaulter. Now when the due date
has been extended even further, there is plenty of time and opportunity to file your
GSTR 1 within time and with all available details.
Filing timely returns is beneficial for both you and your business. Your business gains credibility and you gain peace of mind by not having to worry about being a tax defaulter.
Did you like this article?