Understanding GSTR-2A: An Overview of Its Features and Reconciliation

GSTR-2A represents an automatically generated tax return related to purchases, available to all businesses registered under the Goods and Services Tax (GST). This statement consolidates details of all purchases made by a business during a specific month. The data in GSTR-2A is automatically populated from various returns filed by sellers or counterparties, including GSTR-1, GSTR-5, GSTR-6, GSTR-7, and GSTR-8.

What Constitutes GSTR-2A?

GSTR-2A is a dynamic, purchase-related tax return automatically drafted by the GST portal for each registered entity. When a seller submits their GSTR-1, the relevant information regarding purchased goods and/or services for a given month is captured and reflected in the buyer's GSTR-2A.

GST-registered buyers can utilize GSTR-2A to cross-reference input tax credit (ITC) data when preparing their GSTR-3B and GSTR-9 returns. However, since August 2020, taxpayers are mandated to refer to GSTR-2B, a static counterpart of GSTR-2A, for GSTR-3B preparation.

GSTR-2A's auto-population sources from the following seller/counterparty returns:

Distinguishing GSTR-2A from GSTR-2B?

GSTR-2A is an auto-generated, read-only document intended purely for informational purposes. The table below outlines the primary differences between GSTR-2B and GSTR-2A:

The Non-Filing Nature of GSTR-2A

GSTR-2A is not a return that taxpayers are required to file. It functions as a read-only document that compiles a list of all invoices from various sellers throughout the month. Taxpayers can view and download a copy of this statement for their records.

Consequences of Delayed GSTR-1 or Missing Invoices by Sellers

If a seller delays filing GSTR-1 or fails to upload invoices, the corresponding Input Tax Credit will not appear in the buyer's GSTR-2A for that tax period. Buyers may need to contact their suppliers to ensure that missing invoices are uploaded promptly. Since August 2020, buyers are required to consult GSTR-2B, rather than GSTR-2A, to ascertain the eligible ITC for a given tax period.

Previously, up to December 31, 2021, buyers could claim a provisional input tax credit in GSTR-3B, limited to 5% of the eligible tax credit shown in GSTR-2B, for invoices not found in GSTR-2B, as per CGST Rule 36(4). However, effective January 1, 2022, this 5% provisional or additional ITC claim is no longer permissible due to an amendment in CGST Rule 36(4). Buyers can now only claim ITC that is explicitly reflected in GSTR-2B, in accordance with Section 16(2)(aa) of the CGST Act.

GSTR-2A and GSTR-3B: A Comparative Look

GSTR-3B: This is a summary return filed monthly by taxpayers, typically by the 20th of the following month (or 22nd/24th for quarterly filers). Taxpayers claim ITC based on declarations in Table 4 of Form GSTR-3B:

GSTR-2A: This form is automatically generated in the recipient's login and includes all outward supplies (from Form GSTR-1) declared by their suppliers. More recently, GSTR-2B serves as the consistent auto-drafted return, similar to GSTR-2A, used for comparison purposes.

Reconciling GSTR-3B with GSTR-2A or GSTR-2B

When a supplier files GSTR-1 for any given month, disclosing their sales, the corresponding details are captured in the recipient's GSTR-2A and GSTR-2B. GSTR-3B is a summary return. Therefore, the amount of ITC claimed in Table 4(a) of GSTR-3B should correspond with the tax details presented in GSTR-2A or GSTR-2B. Reconciling GSTR-3B with GSTR-2A or GSTR-2B is crucial for several reasons:

• GST authorities frequently issue notices (e.g., GST ASMT-10) requiring taxpayers to reconcile the ITC claimed in GSTR-3B with the auto-generated data in GSTR-2A or GSTR-2B. Taxpayers must respond to these notices or remit any differential amount.
• Actions have been initiated against entities found claiming ITC based on fraudulent invoices.
• Reconciliation confirms that credit is only claimed for tax actually paid to the supplier.
• It helps ensure no invoices are missed or recorded multiple times.
• If a supplier has not reported outward supplies in GSTR-1, communication can be initiated to rectify these discrepancies.
• Errors made by suppliers in reporting GSTR-1 details or by recipients in GSTR-3B can be identified and corrected.

Common Causes for Discrepancies between GSTR-2A/2B and GSTR-3B

Differences between the details in GSTR-2A/2B and GSTR-3B can arise from several factors:

• Input Goods and Services Tax (IGST) credit claimed on imported goods.
• IGST credit on imported services.
• GST credit paid under the reverse charge mechanism.
• Transitional credit claimed through TRAN-I and TRAN-II forms.
• ITC for goods and services received in one financial year (e.g., FY 2023-24) but availed in a subsequent financial year (e.g., FY 2024-25).

In these scenarios, reconciliation figures will not align because either no corresponding GSTR-1 is filed by the supplier, or the ITC is claimed at a later date.

Addressing Discrepancies: If, after considering the above situations, any discrepancies indicate an excess ITC claimed by the recipient in GSTR-3B compared to GSTR-1, the taxpayer must pay the differential amount along with interest. Regular reconciliation is essential to ensure that only legitimate input tax credit is claimed.

Annual Return Reconciliation: During the filing of the annual return in Form GSTR-9, reconciliation of ITC as per GSTR-3B and GSTR-2A is also required in Tables 6 and 8.

GSTR-2A Format Overview

The government has prescribed a GSTR-2A format comprising seven main headings. Each heading details the information required to be reported under GSTR-2A.

1. GSTIN: The Goods and Services Tax Identification Number of the dealer is displayed here.
2. Name of the Taxpayer: This field shows both the legal and trade name of the taxpayer, along with the relevant month and year for which GSTR-2A is being generated.

PART A

3. Inward supplies received from a registered person other than the supplies attracting reverse charge: This section automatically populates most purchases from GSTR-1 filed by sellers. It includes details such as supply type, GST rate and amount, eligible ITC, and the ITC amount. Purchases under reverse charge are excluded from this section.
4. Inward supplies received from a registered person on which tax is to be paid on reverse charge: This part covers all purchases and supplies received (from both taxable and non-taxable entities) where the recipient is liable to pay GST under the reverse charge mechanism.
5. Debit / Credit notes (including amendments thereof) received during current tax period: This section records details of debit notes and credit notes issued by sellers during the month, including any amendments made by comparing revised and original documents.

Part B

6. ISD credit (including amendments thereof) received: For branch offices, data in this section is automatically filled when the head office files its GSTR-6 return for the month.

PART C

7. TDS and TCS Credit (including amendments thereof) received:
   • TDS credit received: This section applies to specified contracts with certain entities (typically government bodies). The receiver (government) deducts a percentage of the transaction value as Tax Deducted at Source. All information here is auto-populated from GSTR-7 filed by the deductor.
   • TCS credit received: Relevant for online sellers registered with e-commerce operators. E-commerce operators are required to collect tax at source when making payments to these sellers. This data is automatically populated from the e-commerce operators' GSTR-8 returns.

Note: GSTR-2A is an auto-generated, read-only document. It cannot be filed, and therefore, no declaration is required at the end.