GSTR-2 is a month to month return that organizations enlisted under the Labor and products Expense (GST) in India should record. It details every inbound purchase or supply made during the month. To put it another way, it is a list of everything a company bought or received from its suppliers in a given month.
Defining GSTR- 2 and Crucial Aspects to Mention in GSTR-2 Form
Registered taxpayers are required to submit a GSTR-2 return in order to provide details about their inward supplies or purchases during a specific tax period.
The following are some essential details that must be provided in GSTR-2:
- Name and GST Identification Number (GSTIN) of the supplier;
- The invoice number;
- The date of the invoice; the amount of tax paid on purchases;
- and The input tax credit (ITC) claimed on purchases.
The tax authorities use this return to check the accuracy of the supplier’s GSTR-1 information, which is a record of all outward supplies made by the supplier in the same month.
How crucial is it to submit a GSTR-2 return?
Organizations genuinely must record their GSTR 2 profit from time to keep away from punishments and interest charges. The 15th of the month following the month in which the return is being filed is typically the due date for filing GSTR-2. However, it is essential to keep in mind that the GSTR-2 form has been suspended under the GST and has been replaced by the FORM GST ANX-2 form.
When Should You Submit GSTR-2 Return?
The due date for recording GSTR-2 is the fifteenth of the month following the expense period for which the return is to be documented. For instance, the 15th of April, 2023, would be the due date for the GSTR-2 for the month of March 2023.
Defining Buyer-Seller Reconciliation
A process known as “buyer-seller reconciliation,” also known as “invoice matching,” is the process of comparing the buyer’s taxable purchases to the seller’s taxable sales. This is crucial because ITC on purchases will only be available if the buyer’s GSTR-2 (currently GSTR-3B) return details of purchases match their seller’s GSTR-1 details of sales.
For instance, Ajay purchases Rs. 100 worth of pens. From Vijay Stationery, 500 The Rs must appear on Vijay Stationery. 500 transactions in his GSTR-1 Ajay must display identical Rs. To claim ITC, a 500-unit purchase in GSTR-2 (currently GSTR-3B) Ajay will be unable to claim ITC unless the amounts match.
This reconciliation or matching is currently performed between GSTR-2B and GSTR-3B; however, the taxpayer may occasionally need to refer to GSTR-2A. The majority of GSTR-2 headings are auto-populated from counterparties’ GSTR-1, so it would have taken little time.
What Is The Outcome Of Not Documenting GSTR-2 Return?
Failure to submit a GSTR-2 return in a timely manner may result in the following:
- Late Charges: A Rs. 100 late fee will be assessed to any taxpayer who fails to submit their GSTR 2 return on time. 200 every day of postponement, dependent upon a limit of Rs. 5,000. The late expenses are appropriate for each return that isn’t documented on time.
- Blockage of the Input Tax Credit (ITC): Non-recording of GSTR-2 might prompt ITC blockage as the beneficiary can’t guarantee ITC on the internal supplies that are not reflected in their GSTR-2 return.
- Notice and Exclusion: A notice from the tax authorities and a penalty of up to Rs. 100 may result from late or non-filing of the GSTR-2. 10,000 or 10 percent of the amount due in taxes, whichever is greater.
You can modify the GSTR-2 return by following the steps below:
- Login to the GST portal utilizing your accreditations.
- Go to the section labeled “Return Dashboard.”
- Under the “Monthly Return (GSTR-2)” tab, select “Prepare Online.”
You can change the details of your purchases from registered suppliers on the “GSTR- 2 – Details of Inward Supplies Received” page.
The GSTR 2 return form can be modified on the following points:
- Taxable value and tax amount (CGST, SGST/UTGST, IGST)
- Place of supply
- Tax rate and tax amount for supplies subject to reverse charge Once you have made the necessary adjustments,
- Click the “Save” button to save them.
Subsequent to making every one of the vital adjustments, you can review the GSTR- 2 return by tapping on the ‘See’ button.
- You can submit the return by clicking the “Submit” button if the preview is accurate.
- You must use your Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) to sign the return after it has been submitted.
- The system will generate an acknowledgement receipt after the return is signed, which you should download and keep for future reference.
Conclusion
This article made a thorough analysis on different crucial aspects of GSTR-2 involving definition, buyer-seller reconciliation, importance of GSTR-2 and so much more. As any inaccuracies or omissions may result in penalties or interest, it is essential to verify the details entered in GSTR-2.
