February 23, 2023

Reporting of URD transactions of less than 5000 in a day in GSTR

If you are a small or medium-sized business owner in India, chances are you are familiar with Goods and Services Tax (GST), which was introduced in July 2017. The GST is an indirect tax that is levied on the supply of goods and services in India. It is a comprehensive tax that subsumes all other indirect taxes such as value-added tax (VAT), central excise duty, and service tax. One of the key features of GST is the ability to claim input tax credit (ITC) on purchases made for business purposes. This means that businesses can offset the GST they paid on inputs against the GST they collect on outputs.

However, there are some restrictions on claiming ITC, one of which is related to the reporting of unregistered dealer (URD) transactions. URD transactions are those where the supplier is not registered under GST. According to the GST law, businesses can claim ITC on URD transactions only if the value of such transactions is less than INR 5,000 in a day. This means that if you make purchases from unregistered dealers worth more than INR 5,000 in a day, you cannot claim ITC on them.To claim ITC on URD transactions of less than INR 5,000 in a day, you need to report them correctly in your GSTR-2A and GSTR-2B returns. GSTR-2A is an auto-populated return that shows the purchases made from registered and unregistered dealers. GSTR-2B is a similar return that shows the ITC available on these purchases.

To report URD transactions in GSTR-2A and GSTR-2B, you need to follow these steps:

1. Log in to the GST portal and navigate to the 'Services' tab.

2. Click on 'Returns' and then select 'Returns Dashboard'.

3. Select the tax period for which you want to file the return.

4. Click on 'Prepare Offline' and download the GSTR-2A JSON file.

5. Open the file in Excel and filter the 'URD Invoices' worksheet.

6. Delete the rows where the value of the transaction is more than INR 5,000.

7. Save the file and upload it back to the GST portal.

8. Repeat the same process for GSTR-2B.

It is important to note that if you do not report URD transactions of less than INR 5,000 in a day correctly, you may lose out on the ITC available on them. This can result in higher tax liability and lower profitability for your business.In conclusion, reporting URD transactions of less than INR 5,000 in a day is an important aspect of claiming ITC under GST. By following the steps outlined above, you can ensure that you report these transactions correctly and claim the ITC available on them.


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