The Goods and Services Tax Network (GSTN) has issued an advisory to help taxpayers address GSTR 2B input tax issues that could affect their ability to claim Input Tax Credit (ITC). Taxpayers must resolve these problems by November 30, 2024, to ensure compliance and maintain cash flow.
Failing to upload invoices on the GST portal by this deadline will result in buyers losing the right to claim ITC for FY 2023-24. Here’s a detailed guide on the issue, its implications, and practical steps for resolution.
What Causes GSTR 2B Issues?
- QRMP Scheme: Taxpayers under the Quarterly Return Filing and Monthly Payment (QRMP) scheme won’t see GSTR-2B for the first two months of a quarter. For instance, those filing quarterly for Oct-Dec 2024 will receive GSTR-2B for December 2024 only.
- Pending GSTR-3B: If a taxpayer hasn’t filed GSTR-3B for prior months, GSTR-2B for subsequent periods will not be generated. Filing pending returns is mandatory for activating the “Compute GSTR-2B” option.
Impacts of GSTR 2B Issues
According to experts, incomplete GSTR-2B data prevents buyers from claiming ITC for supplier invoices not filed in GSTR-1. Let’s examine an example shared by Chartered Accountant Akhil Pachori:
| Scenario | With ITC | Without ITC |
|---|---|---|
| Goods purchased: ₹10 crore @18% GST | Input Tax Credit: ₹1.8 Cr | No ITC Available |
| Goods sold: ₹12 crore @18% GST | Output Tax Liability: ₹2.16 Cr | ₹2.16 Cr (Cash Payable) |
| Net Liability | ₹36 lakh (After ITC) | ₹2.16 Cr |
Without ITC, the buyer’s working capital is severely impacted, as they must pay the full ₹2.16 crore from their cash ledger.
Steps to Fix GSTR 2B Issues
How taxpayers can address GSTR 2B input tax problems:
- Supplier Coordination:
- Request suppliers to upload invoices and file GSTR-1 immediately.
- Ensure all entries are uploaded before November 30, 2024.
- File Pending Returns:
- Complete any overdue GSTR-3B filings.
- Use the “Compute GSTR-2B” option on the IMS portal once prior filings are completed.
- Recompute GSTR-2B:
- After supplier compliance, accept the invoice on the GST portal.
- Use the “Recompute GSTR-2B” option to update ITC data.
Proactive resolution of GSTR 2B input tax issues can safeguard your ITC claims and prevent cash flow disruptions. Monitor your suppliers’ compliance and take timely action. Stay updated with GST rules and utilise the tools provided by GSTN for a seamless tax filing experience.
“Success is not final; failure is not fatal: It is the courage to continue that counts.”