WFYI logo

Understanding FORM GST ANX-2: The Annexure for Inward Supply Details

FORM GST ANX-2 is a crucial annexure designed to capture comprehensive details of inward supplies under India's proposed New GST Return System. This form allows recipients to manage and reconcile their purchases by accepting, rejecting, or marking documents as pending, directly impacting their Input Tax Credit (ITC) claims. It was intended to integrate seamlessly with supplier data from FORM GST ANX-1, ensuring a transparent and efficient process for GST compliance regarding inward supplies.

📖 3 min read read🏷️ GST Returns

Under India's proposed New GST Return System, a primary return form, FORM GST RET-1, was planned, accompanied by two annexures: FORM GST ANX-1 and FORM GST ANX-2. Businesses were intended to file this return monthly. However, smaller taxpayers, defined as those with an annual turnover up to Rs 5 crore, would have the option to file their returns quarterly. It's worth noting that the implementation of this new GST return system, including forms like ANX-2, was initially slated for October 2020. Until then, the existing system involving GSTR-1, GSTR-2A, and GSTR-3B was to remain in effect. This timeline was subject to notifications from the CBIC.

What is FORM GST ANX-2?

FORM GST ANX-2 serves as an integral annexure to the main return, FORM GST RET-1. It consolidates all details pertaining to inward supplies, empowering the recipient of these supplies to take specific actions. Recipients can choose to accept or reject the documents, or mark them as pending for future review. If a recipient accepts the documents, it signifies their agreement that the supplies reported by the suppliers in FORM GST ANX-1 are accurate and correctly reflected.

What are the Contents of FORM GST ANX-2?

FORM GST ANX-2 includes several key sections for taxpayers:

  1. GSTIN: Taxpayers are required to enter their Goods and Services Tax Identification Number.
  2. Basic Details: Essential information such as the trade name and legal name will be automatically populated based on the provided GSTIN.
  3. Inward Supplies Received: This section covers inward supplies from registered persons (excluding those under reverse charge), imports, and supplies from Special Economic Zone (SEZ) units or developers on a Bill of Entry. The details are categorised as follows:
Table No.Name of the TableInstructions
3ASupplies received from registered persons including services received from SEZ unitsInformation in these tables will be automatically pulled from specific sections of the supplier’s FORM GST ANX-1, including details on supplies made to registered persons, supplies to SEZ units with or without tax payment, and deemed exports. Recipients can accept, reject, or mark documents as pending.
3BImport of goods from SEZ units/developers on Bill of EntryThis section is for recording imported goods from SEZ units or developers based on the Bill of Entry.
3CImport of goods from overseas on Bill of EntryThis section covers goods imported from outside India, as documented on a Bill of Entry.
4Summary of the input tax creditThis table provides the total input tax credit for the reporting period, reflecting the recipient's actions (accepted, rejected, or pending documents).
5ISD credits receivedThis table is dedicated to reporting eligible input tax credit received from an Input Service Distributor, with entries made document-wise.

What is the Format of FORM GST ANX-2?

FORM GST ANX-2 follows a structured format designed to capture all necessary details of inward supplies systematically.

Key Considerations for Taxpayers While Filing FORM GST ANX-2

Taxpayers should be aware of several important points when preparing to file their FORM GST ANX-2:

  1. Suppliers have the flexibility to continuously upload documents on a real-time basis into FORM GST ANX-1, which then automatically populates into the recipient's FORM GST ANX-2.
  2. The recipient receives these document details in their FORM GST ANX-2 and can choose to accept, reject, or defer action on them.
  3. Accepting a document confirms that it was received before the recipient's return filing and that the details provided by the supplier are accurate.
  4. Only the supplier can make corrections to rejected documents by amending their FORM GST ANX-1.
  5. If a recipient marks a document as pending, it indicates a decision to postpone action (accept or reject) to a later date. Input tax credit on these pending documents will not be reflected in the main return, FORM GST RET-1.
  6. Suppliers are unable to amend invoices that a recipient has marked as pending until the recipient formally rejects them.
  7. Recipients will be informed in their FORM GST ANX-2 whether the supplier has filed their return. However, this status does not impact the recipient's eligibility for input tax credit, which is determined by the relevant Act and its rules.
  8. A separate function allows recipients to search for and reject an already accepted document where credit has been claimed. This reclaimed credit will appear as a reversal in table 4B(1) of FORM GST RET-1 and can be adjusted in table 4A(11) of the same return to calculate the net input tax credit availed.
  9. FORM GST ANX-2 is considered filed automatically upon the filing of the corresponding main return, FORM GST RET-1, for that tax period.
  10. If a supplier has uploaded documents in FORM GST ANX-1 but has failed to file their return for two consecutive periods (or one quarter for quarterly filers), the recipient will not be able to claim credit on these documents, even if they appear in their FORM GST ANX-2. However, the options to reject or mark these documents as pending remain available.

Frequently Asked Questions

What is the Goods and Services Tax (GST) in India?
GST is a comprehensive indirect tax levied on the supply of goods and services in India. It replaced multiple cascading taxes levied by the central and state governments, aiming to streamline the tax structure and create a unified national market.
Who is required to register for GST?
Businesses whose aggregate turnover exceeds a specified threshold limit (which varies by state and type of business) are required to register for GST. Certain businesses, irrespective of turnover, also need compulsory registration, such as those making inter-state taxable supplies.
What is Input Tax Credit (ITC) under GST?
Input Tax Credit (ITC) allows businesses to claim credit for the GST paid on the purchase of goods and services that are used for business purposes. This credit can then be used to offset the GST payable on their outward supplies, thereby avoiding double taxation.
How often do businesses need to file GST returns?
The frequency of GST return filing depends on the taxpayer's turnover. Most large taxpayers file monthly returns, while small taxpayers with an annual turnover up to Rs 5 crore can opt for quarterly filing through the Quarterly Return Filing with Payment of Taxes (QRMP) scheme.
What is the difference between CGST, SGST, IGST, and UTGST?
CGST (Central GST) and SGST (State GST) are levied on intra-state supplies (within a state). IGST (Integrated GST) is levied on inter-state supplies (between states) and imports. UTGST (Union Territory GST) is the equivalent of SGST for Union Territories without a legislature.
What are the common challenges faced by businesses under GST?
Businesses often face challenges such as understanding complex compliance requirements, managing input tax credit claims, reconciling purchase and sales data, and adapting to frequent changes in GST laws and regulations.
What happens if a business fails to file GST returns on time?
Failure to file GST returns by the due date can result in late fees and interest penalties. Repeated non-compliance can lead to stricter enforcement actions from the tax authorities.