The Goods and Services Tax (GST) has been implemented in India for more than three years now. GST is a comprehensive tax that replaced multiple indirect taxes levied on goods and services. The GST has brought transparency and efficiency to the indirect tax system in India. However, there are still some issues that need to be addressed. One such issue is the GSTR-2A Vs. 3B mismatch.
Before we dive into the issue, let us first understand what GSTR-2A and GSTR-3B are.
GSTR-2A is an auto-populated return that captures all the inward supplies made to a registered person during a particular period. The data for GSTR-2A is fetched from the GSTR-1 filed by the suppliers of the registered person. GSTR-2A contains details such as the supplier's name, the invoice number, date of the invoice, the value of the invoice, and the tax amount.
GSTR-3B is a self-declaration return that is filed by the registered person. GSTR-3B is filed on a monthly basis, and it contains the details of the outward supplies made by the registered person, the input tax credit claimed, and the tax payable.
Due to manual errors or technical glitches, there can be a mismatch between the GSTR-2A and GSTR-3B. A mismatch means that the details of the inward supplies reflected in the GSTR-2A are not in line with the details of the outward supplies reflected in the GSTR-3B. Such a mismatch can lead to a situation where the recipient is entitled to claim input tax credit for a particular period, but he is unable to do so due to the mismatch.
The GST law provides that the recipient of the goods or services is entitled to claim input tax credit only if the details of such supplies have been furnished by the supplier in his valid return. In case of a mismatch between the GSTR-2A and GSTR-3B, the recipient may not be able to claim input tax credit if the supplier has not furnished the correct details in his return.
This has been a major issue for the recipients of goods or services, especially those who are small and medium business owners or startup founders. It has caused a lot of hardship and financial burden for them.
To provide relief to the recipients in case of a GSTR-2A Vs. 3B mismatch, the GST Council has introduced a new rule. The new rule allows the recipient to claim input tax credit on a provisional basis even if the details of the inward supplies are not reflected in the GSTR-2A.
The new rule provides that the recipient can claim input tax credit on a provisional basis for a period not exceeding 20% of the eligible credit available in respect of invoices or debit notes uploaded by the suppliers. The provisional credit can be claimed by the recipient in GSTR-3B. However, the recipient must ensure that the supplier has filed his GSTR-1 correctly.
If the supplier has not filed his GSTR-1 correctly, the recipient must follow up with the supplier to get the correct details of the inward supplies. Once the correct details are furnished by the supplier, the recipient can claim the remaining input tax credit in the subsequent months.
The GSTR-2A Vs. 3B mismatch has been a major issue for the recipients of goods or services. The new rule introduced by the GST Council provides relief to the recipients by allowing them to claim input tax credit on a provisional basis. However, the recipient must ensure that the supplier has filed his GSTR-1 correctly. This new rule will provide much-needed relief to small and medium business owners and startup founders who have been struggling with this issue for a long time.
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