Goods and Services Tax (GST) compliance is an essential part of running any business in India. Of the many forms and returns under the GST regime, GSTR-2B is particularly valuable for taxpayers. Released in August 2020, GSTR-2B is an auto-drafted Input Tax Credit (ITC) statement that assists businesses in reconciling and accurately claiming eligible credits.In this blog, we’ll explore what GSTR-2B is, how it differs from GSTR-2A, and why it is important for businesses

GSTR-2B is a static auto-drafted statement that indicates the Input Tax Credit to which a taxpayer is entitled for a period. It is drafted on the 14th of each month, following invoices uploaded by suppliers in their GSTR-1, GSTR-5, and GSTR-6 returns submitted from the 12th of the earlier month up to the 11th of the current month.

1. Correct Input Tax Credit (ITC) Claim

GSTR-2B allows businesses to make sure that they are claiming only the ITC that appears in their statement. This minimizes the chances of claiming ineligible or more credit than they have, which could attract notices or penalties from the tax department.

2. Reconciliation Simplified

It allows simple reconciliation between the records of purchases that are being kept by the business and what is being uploaded by the suppliers. This ensures there are no mismatches and hence less error in GSTR-3B filings.

3. Time Efficiency and Savings

Since the nature of GSTR-2B is fixed, businesses are not anxious about day-to-day changes as in GSTR-2A. This assists in the process of streamlined return filing and reduces the time consumed by finance and accounting teams.

4. Early Supplier Default Detection

Through GSTR-2B, businesses can detect non-compliant suppliers who have not uploaded invoices or submitted their returns. This enables businesses to pursue follow-up action and get timely compliance from their vendors.

5. Prevention of Interest and Penalties

Claiming ITC under GSTR-2B keeps businesses in line with the GST laws. This prevents unnecessary interest, penalty, or notice from the GST department for erroneous ITC claims.

To download and see GSTR-2B:

Log in to the GST portal

Go to Returns Dashboard

Choose the correct financial year and return filing period

Click on GSTR-2B

See/download the summary or detailed report

Tips for Businesses to Get Full Advantage of GSTR-2B

Reconcile data of GSTR-2B before filing GSTR-3B

Talk to non-compliant suppliers periodically

Proper documentation of invoices and ITC claims

Utilize accounting software that imports GSTR-2B data to automate reconciliation