What is the Difference Between GSTR-2A and 2B?

India’s GST regime is a wonder of modern tax administration, simplifying indirect taxes for more than 1.51 crore businesses and monitoring billions of transactions each year. This tax transparency, however, is as much a responsibility, a responsibility to balance purchases and Input Tax Credit (ITC).

Contrary to what one would tend to think, a large number of ITC claims either get delayed or rejected because of data mismatches between suppliers. The two most important GST return forms at the centre of this challenge are GSTR-2A and GSTR-2B. Not many seem to know the difference between GSTR-2A and 2B, but understanding it is the only key to avoid GST notices and ensure smooth compliance.

Let’s explore the facts and sundry nuances of GSTR-2A vs 2B to ensure that your business does not get into trouble and your cash flow remains healthy always and forever.

What are GSTR-2A and GSTR-2B?

Before we dive into understanding the difference between GSTR-2A and GSTR-2B, let’s try and comprehend what each of these forms are and what they mean to the world of GST.

GSTR-2A is a read-only document that’s issued to each and every GST-registered recipient in India. It records information of all inbound supplies (purchases) made by you, as declared by your suppliers in their GSTR-1, GSTR-5, GSTR-6, GSTR-7, and GSTR-8 returns. The specialty of GSTR-2A is that it is a dynamic document that gets updated in real time or as and when your suppliers upload or make changes in their invoices.

Suppose you buy office chairs from a supplier on April 5th. If the supplier uploads the invoice in their GSTR-1 on April 10th, it appears instantly in your GSTR-2A. If he corrects the invoice in May, your GSTR-2A for April updates automatically.

GSTR-2B, conversely, is a fixed ITC statement that’s generated on the 14th of the month falling after the taxable month. It extracts information from GSTR-1, GSTR-5, and GSTR-6 filed by your suppliers until the 13th of the following month. GSTR-2B, once created, cannot be altered during this period, this even if the suppliers file late or make amendments post the cut-off.

If a supplier uploads an invoice detailing your April purchase on May 12th, it will show up in your GSTR-2B for April (available on the 14th of May). If he uploads it on 15th May, your GSTR 2B of May would have a record of it.

GSTR-2A vs 2B: What’s the Difference Between GSTR-2A and 2B?

Each and every GSTR-registered business in India must know the difference between GSTR-2A and GSTR-2B to be able to file accurate ITC claims and evade penalties. Well, then, let’s go over the distinctions one by one, shall we?

1. Nature

The basic difference between GSTR-2A and 2B is their nature. On one hand, GSTR-2A is dynamic and gets updated in real-time as suppliers upload or update invoices, GSTR-2B, on the other hand, is static. It is produced only once, on the 14th of the next month, and it does not vary during this period.

In case a supplier makes late payment of an invoice (post 13th), it will show in your GSTR-2A almost immediately, but only in the GSTR-2B of the following month.

2. Timing & Data Availability

Timing of data is another difference between GSTR-2A and GSTR-2B. GSTR-2A is released on a real-time basis, that is to say, the moment a supplier files a return or makes any changes in it, the invoice gets reflected in your GSTR-2A. GSTR-2B, in contrast, is prepared on a monthly basis, giving an overview of eligible ITC as of the 13th of the next month.

GSTR-2A will continue updating, so that you can verify your eligible ITC of April as the suppliers file or revise their returns. GSTR-2B, however, provides you with a fixed summary up to the 14th of May.

3. Data Sources

GSTR-2A pulls data from multiple forms, namely GSTR-1, GSTR-5 (non-resident), GSTR-6 (ISD), GSTR-7 (TDS), and GSTR-8 (TCS). GSTR-2B, by comparison, uses GSTR-1, GSTR-5, and GSTR-6, but also includes import data from ICEGATE, making it more complete for ITC on imports.

4. Purpose & Usage

The difference between GSTR-2A and 2B also extends to their purpose. GSTR-2A is a reference tool for reconciling your purchase register with supplier data. It helps you spot discrepancies and follow up with suppliers.

GSTR-2B, conversely, is the authoritative document for ITC claims in your GSTR-3B return. Its static nature ensures certainty and compliance.

5. Legal Standing

GSTR-2A is a reference document for reconciliation but is not legally binding for ITC claims. GSTR-2B, on the contrary, is considered the basis for ITC claims in GSTR-3B, as per GST advisories.

If there’s a mismatch between your purchase register and GSTR-2A, you should reconcile and communicate with suppliers. For ITC claims, rely on GSTR-2B for the final eligible amount.

6. Bifurcation of ITC

A subtle but important difference between GSTR-2A and GSTR-2B is how ITC is presented. GSTR-2A does not categorize ITC as eligible or ineligible. It simply lists all invoices. GSTR-2B, however, bifurcates ITC into eligible, ineligible, and reversed categories, making it easier to identify what can be claimed.

If you have purchases from both registered and unregistered suppliers, GSTR-2B will clearly indicate which ITC is claimable and which is not, while GSTR-2A will not provide this clarity.

7. Import of Goods

GSTR-2A does not include ITC on imports. GSTR-2B, however, includes ITC on imports and SEZ purchases, thanks to integration with ICEGATE.

8. Document Types

GSTR-2A includes original and amended invoices, credit notes, and debit notes. GSTR-2B, in contrast, provides a consolidated summary, making it easier to identify actionable ITC.

Conclusion

In the intricate world of GST compliance thus, understanding the difference between GSTR-2A and 2B is extremely essential. This, so your business remains protected, and your tax benefits maximized, come hell or high water.

To know more on how to file GSTR-2A and GSTR-2B, you can also make use of a GST software to help you attain the same. If you then plan to purchase one, please feel free to contact the Techjockey team.