Inward Sales

GSTR-2 contains details of Inward Supply, i.e., purchases for a tax period Every registered tax payer has to file this return. When you make purchases from registered vendors, the information from their sales returns (GSTR-1) will be available on the GSTN portal as GSTR-2A. You can use these details in your GSTR-2.

  1. Who should file GSTR-2?

Every registered person has 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

2. When is GSTR-2 due?

A taxpayer has to file the purchase details of a specific month 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 relaxed the GST return filing dates for the first two months, i.e., July and September 2017 to ease the transition into GST.

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. A registered dealer has to file it. The government uses it to 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 buyer’s purchase return details match with the seller’s sales details.

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

If taxpayers don’t file GSTR-2, they cannot file the GSTR-3.  Hence, late filing of GST return will have a cascading effect. This will lead to heavy fines and penalty.

6. What happens in case of late filing?

If you delay in filing, you will have to pay interest and a late fee.

Interest is 18% per annum. The taxpayer will calculate it on the amount of outstanding tax. 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 and the total will be Rs. 200/day. Maximum is Rs. 5,000.There is no late fee on IGST.

7. How to revise GSTR 2?

A taxpayer cannot revise GSTR 2 once filed. Taxpayers can revise the errors 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 one has 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 are 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 reconcile 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. But, taxpayers can edit GSTR-2 and GSTR-2A is a read only document. If there is any error in GSTR-2A, taxpayers have to correct it in GSTR-2.

Details provided in GSTR-2

1. GST Identification Number– use provisional id as GSTIN if you do not have a GSTIN. You can get your GSTIN here.

2. Name of the taxpayer– Name of the taxpayer including legal and trade name will be auto populated

3. Inward Supplies from Registered Taxable Person other than the supplies attracting reverse charge: This information is automatically captured by the GSTN. Taxpayers can accept, reject or modify these details.

4. Inward supplies on which tax is to be paid on reverse charge: Capture purchases on which you pay tax directly to the government on behalf of your supplier. If the supplier is not in the same location as you, you must provide the place of supply (the state where you received the goods or services).

  • Invoice-wise details of inward supplies received from a registered supplier that attract reverse charge (you pay tax on purchases directly to the government). E.g., purchases made from silk yarn vendors.
  • Details of purchases and inward supplies received from an unregistered supplier (which attract reverse charge by default).
  • Invoice-wise details of services imported from overseas vendors.

5. Inputs/Capital goods received from Overseas or from SEZ units on a Bill of Entry: Rate-wise details of all goods that you have imported during this month.

  • Imports: Details pertaining to bills of entry, including 6-digit port codes and 7-digit bill numbers.
  • Received from SEZ: Supplies received from suppliers inside a special economic zone are treated like inter-state supplies and will attract IGST and in some cases may also attract a BCD (Basic Customs Duty) since they are treated like imports.

6. Amendments to details of inward supplies furnished in returns for earlier tax periods (including debit notes/credit notes issued and their subsequent amendments):

  • Corrections to details of inward supplies filed during previous tax periods, other than import of goods or goods received from SEZ.
  • Corrections to information pertaining to import of goods or goods received from SEZ
  • Details of original debit Notes and credit notes issued to you during this month.
  • Details of debit notes and credit notes that you provided in earlier tax periods (along with the details of the original document).

7. Supplies received from composition taxable persons, and other exempt/Nil rated/Non-GST supplies received: Under this section, you get to capture interstate and intrastate purchases made from composition vendors including exempt, nil rated and non-GST supplies from vendors at gross value.

8. ISD credit received: This data will be auto-generated when the ISD files the GSTR-6.

  • Details of internal invoices sent to you by your ISD (head office), if any.
  • Capture credit notes issued by your ISD.

9. TDS and TCS Credit received: There are two sub sections:

10. Consolidated Statement of Advances paid/Advance adjusted on account of receipt of supply:  If you had paid advance tax on goods or services received during an earlier tax period, but only received the invoices this month, declare the details here.

  • Information for the current month:
    • Advance amount paid for reverse charge supplies received in the current tax period
    • Advance amount on which tax was paid in earlier periods but the invoice was only received in the current period.
  • Information for previous months:
    • All corrections and modifications made to transactions the goods/services were received from the vendor/s this month but the payment was made in advance.
      • Input Tax Credit Reversal / Reclaim.
      • ITC Information for the current tax period.
      • Amount in terms of rule 2(2) of ITC Rules (add)
      • Amount in terms of rule 4(1)(j)(ii) of ITC Rules (add)
      • Amount in terms of rule 7(1)(m) of ITC Rules (add)
      • Amount in terms of rule 8(1)(h) of the ITC Rules (add)
      • Amount in terms of rule 7(2)(a) of ITC Rules (add)
      • Amount in terms of rule 7(2)(b) of ITC Rules (add)
      • On account of amount paid subsequent to reversal of ITC (reduce)
      • Any other liability (Specify)
  • Amendments made to the ITC information furnished in an earlier return: Here, you can make corrections to the details declared under table 11 of previous GSTR-2 returns.

11. Addition and reduction of amount in output tax for mismatch and other reasons: This section is to capture any additional tax liability (tax you have to pay to the government) that arises due to the corrections made to the GSTR-3 of the previous month.

  • ITC claimed on mismatched/duplication of invoices/debit notes: The excess input tax credit that you may have claimed from duplicate purchase invoices have to be given back to the government. Hence this amount will be added to the tax liability.
  • Tax liability on mismatched credit notes: Any incorrect submissions of credit notes issued by your suppliers will also mean incorrect ITC values. Since those mismatches were corrected in the previous month, you have pay the difference back to the government this month. Hence this amount will be added to the tax liability.
  • Reclaim on account of rectification of mismatched invoices/debit notes (Reduce): This could arise whenever the correct taxable value on the invoice is less than the tax you paid against it during the previous month (due to a higher value mentioned on the incorrect invoice). And so, the excess amount will be deducted from your current tax liability.
  • Reclaim on account of rectification of mismatched credit note (Reduce): Works similar to subsection c.
  • Negative tax liability from previous tax periods (Reduce): This could be due to any excess tax paid by you during the previous months and will be adjusted this month.
  • Tax paid on advance in earlier tax periods and adjusted with tax on supplies made in current tax period (Reduce): This points to the tax paid along with advance payments during previous tax periods for supplies received during this month. (also includes changes due to any amendments made to such transactions)

12. HSN summary of inward supplies – Provide an HSN-wise summary of the items purchased by you including total quantity purchased, taxable value under each tax heading, and Unit Quantity Codes (for imports).

Once a tax payer has completed the filing of GSTR-1 and GSTR-2, the GSTR-3 will be auto-populated.