Clarification to deal with difference in ITC availed in GSTR-3B as compared to GSTR-2A

The government has issued a clarification on how to deal with the difference in Input Tax Credit (ITC) availed in GSTR-3B as compared to GSTR-2A. The clarification provides the following guidance:

1. The taxpayer should reconcile their GSTR-3B data with the data in their GSTR-2A to identify any discrepancies in the ITC claimed.

2. If there are any discrepancies, the taxpayer should try to rectify them in the GSTR-3B of the subsequent month.

3. If the discrepancies cannot be rectified in the subsequent month, the taxpayer should reflect the amount of ITC that remains un-reconciled in their GSTR-3B for the month of September of the following financial year.

4. The taxpayer should ensure that they have documentary evidence to support the ITC claimed in their GSTR-3B.

5. If there is a reduction in the ITC claimed in the subsequent period, the taxpayer should reverse the corresponding amount of ITC in their GSTR-3B.

It is important for taxpayers to reconcile their GSTR-3B data with their GSTR-2A to ensure that they are claiming the correct amount of ITC. This will help them avoid any potential discrepancies or penalties in the future.

GSTR-3B and GSTR-2A

GSTR-3B and GSTR-2A are two types of GST returns that need to be filed by registered taxpayers in India under the Goods and Services Tax (GST) regime.

GSTR-3B is a monthly summary return that is filed by all regular taxpayers to report their sales, purchases, and input tax credit (ITC) claims. It is a self-declaration of the taxes that are payable, and the ITC that can be claimed for a particular tax period. The due date for filing GSTR-3B is the 20th of the following month.

GSTR-2A is an auto-populated statement of inward supplies that is generated on the basis of the details uploaded by the suppliers in their GSTR-1 returns. It reflects the purchases made by a taxpayer from its suppliers during a particular tax period, and the input tax credit that can be claimed on such purchases. It is a read-only form and cannot be edited by the recipient of supplies. It is available for download from the GST portal.

Since GSTR-2A is auto-populated based on the information furnished by the supplier in GSTR-1, it is important for the taxpayer to reconcile the information in GSTR-3B with that of GSTR-2A to ensure that the ITC claimed matches with the actual eligible credit. Any difference in the ITC availed in GSTR-3B as compared to GSTR-2A can lead to notices from the GST authorities, and can also affect the taxpayer's GST compliance rating.

Process of reconciling the ITC availed in GSTR-3B with GSTR-2A

The process of reconciling the ITC availed in GSTR-3B with GSTR-2A involves the following steps:

1. Downloading GSTR-2A: The taxpayer needs to download the GSTR-2A for the respective period from the GST portal.

2. Matching ITC with GSTR-2A: The taxpayer needs to match the ITC available in the GSTR-2A with the ITC claimed in the GSTR-3B. Any discrepancy needs to be identified, and necessary actions should be taken.

3. Identifying ineligible ITC: The taxpayer needs to identify ineligible ITC, such as ITC on purchases not related to business or blocked credits. Such ineligible ITC should be reversed.

4. Communicating with suppliers: In case of any discrepancies, the taxpayer needs to communicate with the suppliers and take necessary action to rectify them.

5. Revising GSTR-3B: Based on the reconciliation, the taxpayer may need to revise the GSTR-3B and correct any errors or discrepancies.

6. Filing GSTR-1: Once the reconciliation process is complete, the taxpayer can file the GSTR-1 for the respective period.

It is important for taxpayers to ensure that the ITC claimed in the GSTR-3B matches with the ITC available in the GSTR-2A to avoid any legal or compliance issues. Reconciling ITC regularly helps to avoid any major discrepancies and ensures that the taxpayer is in compliance with the GST laws.