GSTR-2 - Part 1

GSTR-2 – Inward Supplies

Every registered taxable person is required to give details of Inward Supply, i.e., purchases for a tax period in GSTR-2. When you make purchases from registered vendors, the information from their sales returns (GSTR-1) will be available in the GSTN portal as GSTR-2A for you to use in your GSTR-2.

1) Who should file GSTR-2?

Every registered person is required to file GSTR-2 irrespective of whether there are any transactions during the month or not. However, these registered persons do not have to file GSTR 2 –

  1. Input Service Distributors
  2. Composition Dealers
  3. Non-Resident Taxable Person
  4. Persons liable to collect TCS
  5. Persons liable to deduct TDS
  6. Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per sec 14 of the IGST Act)

2) When is GSTR-2 due?

The purchase details of a specific month should filed before the 15th of the following month. There is a gap of 5 days between GSTR-1 and GSTR-2 to correct any errors. The council has relaxed the GST return filing dates for the first two months, i.e., July and September 2017 to facilitate the transition into GST. GSTR-2 for July, 2017 has to be filed on or before 31st October 2017. 

3) Why is GSTR-2 important?

GSTR-2 contains details of all the purchases transactions of a registered dealer for a month. It will also include purchases on which reverse charge applies. The GSTR-2 filed by a registered dealer is used by the government to check with the sellers’ GSTR-1 for buyer-seller reconciliation.

4)What is buyer-seller reconciliation?

Buyer-seller reconciliation or invoice matching is a process of matching the seller’s taxable sales with the buyer’s taxable purchases. It is vital because ITC on purchases will only be available if the details of purchases filed in GSTR-2 return of buyer matches with the details of sales filed in GSTR-1 of the seller.

5) What happens if GSTR-2 is not filed?

If GSTR-2 return is not filed then the next return GSTR-3 cannot be filed.  Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty.

6) What happens if GSTR-2 is filed late?

If you delay in filing, you will be liable to pay interest and a late fee. Interest is 18% per annum. It has to be calculated by the tax payer on the amount of outstanding tax to be paid. Time period will be from the next day of filing (16th of the month) to the date of payment. Late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. Maximum is Rs. 5,000.There is no late fee on IGST. 

7) How to revise GSTR 2?

GSTR 2 once filed cannot be revised. Any errors in the return can be revised in the next month’s return.

8) What is GSTR-2A?

GSTR-2A is a purchase return that is generated automatically after a seller files his GSTR-1. It is a document with a list of all the invoices from all the sellers that you have dealt with during the month.

9) How are GSTR 2A & GSTR 2 related?

GSTR 2 filing does not require one to declare all the details of inward supplies. Most of the details in GSTR 2 is auto-populated, based on the outward supplies declared by one’s suppliers in their returns. The auto-populated details of inward supplies made available in GSTR 2A, will be available in GSTR 2 also.

In other words, GSTR 2A will be an exact replica of the GSTR 2 format, containing only the details declared by one’s suppliers in GSTR-1. The details of inward supplies available in GSTR-2A should be reconciled with your books of accounts.

 10) What is the difference between GSTR 2 and GSTR-2A?

GSTR 2 will have the same information as GSTR-2A. However, GSTR-2 can be edited and GSTR-2A is a read only document. If any error is spotted in GSTR-2A, the corrections have to be made in GSTR-2.

For more information regarding the details to be provided in GSTR-2, read GSTR - Part 2.