How to claim ITC in GST

Introduction to GSTR-2B

GSTR-2B provides eligible and ineligible Input Tax Credit (ITC) for each month, similar to GSTR-2A but remains constant or unchanged for a period. In other words, whenever a GSTR-2B for a month is accessed on the GST portal, the data in it remains the same without being changed for subsequent changes by their suppliers in later months.

GSTR-2B is available to all normal, SEZ and casual taxpayers. Every recipient can generate it on the basis of the GSTR-1, GSTR-5 and GSTR-6 furnished by their suppliers.

The statement will clearly show document-wise details of ITC eligibility. ITC information will be covered from the filing date of GSTR-1 for the preceding month (M-1) up to the filing date of GSTR-1 for the current month (M).

For instance, GSTR-2B generated for July 2020 will contain documents filed by their suppliers from 12 a.m. on 12th July 2020 up to 11:59 p.m. on 11th August 2020. The statement for July 2020 will be generated on 12th August 2020.

Contents and features of GSTR-2B

The input tax credit on purchases from any regular taxpayers and non-resident taxable persons will be available in GSTR-2B. Further, the input tax credit distributed by the input service distributor shall also be available.

The contents of GSTR-2B can be summarised as follows:

1. Summary statement showing ‘ITC available’ and ‘ITC not available’ for every section.

2. Advisory for every section clarifies the kind of action that taxpayers must take.

3. Document-wise details such as invoices, credit notes, debit notes, etc. to view and download along with amendments.

4. Cut-off dates and advisory for generating and using GSTR-2B.

5. Import of goods and import from SEZ units/developers (available from GSTR 2B of August 2020 onwards).

The form GSTR-2B is classified into two categories:

• ITC is available: PART-A of ITC Available contains details of inward supplies, credit-debit notes (CDN), including amendments, and import of goods divided into four parts- ITC for supplies from registered persons, ITC from ISD, ITC towards inward supplies on reverse charge and import of goods. Whereas, PART-B is ITC Reversal has one part called ‘Others’ that contains details of credit notes and amendments.

• ITC is not available: PART-A of ITC Not Available has purchase invoice or CDN details, including any amendments, divided into three parts- All other ITC for supplies from registered persons, ITC from ISD and ITC towards inward supplies on reverse charge. Whereas, PART-B has CDN details and amendments under the ‘Others’ heading.

Note: Amendment tables in GSTR-2B give only the differential tax amount (Amended – Original), also referred to as the delta value. But the document details will display revised details with reference to the original document.

The input tax credit will be marked as ‘not available’ in the following scenarios:

• Where the time limit to avail input tax credit on an invoice or debit note has expired under section 16(4) of the CGST Act (earlier of 30th September of the year following the financial year or date of filing annual returns).

• The state of the supplier and place of supply is the same, whereas the recipient is located in another state.

• When the purchaser is not eligible for Input Tax Credit towards an invoice or debit note is issued for the supply of goods or services, or both.

Matching GSTR-2B with purchase books is more important than matching with the GSTR-3B. It is because, from late 2020 onwards, GSTR-3B is being auto-populated with the values from GSTR-1 and GSTR-2B forms for the corresponding tax period. Hence, there are lesser chances for any mismatches.

Once the values are taken from GSTR-2B, the values from GSTR-2A need not be taken. The GST portal provides an option for taxpayers to match their purchase register with the GSTR-2B form known as the Offline Matching Tool. It is critical that you add data and import it into the tool in the same format as given on the GST portal. Otherwise, the tool will produce an error, and you will be unable to continue matching GSTR-2B records with the purchase register.