ITC Mismatch between GSTR 3B & GSTR 2B
GST was brought in as a revolutionary change and India’s biggest tax system overhaul with one of the essential objectives of providing seamless credit flow to the taxpayers
However, recently, we all have been witnessing a large number of notices issued by the GST Authorities regarding ITC mismatch between GSTR 2B and GSTR 3B, which has been causing confusion among taxpayers. In this article, we will explain what GSTR 2B and GSTR 3B are, why there is a mismatch between them, and how taxpayers can resolve the same.
What is GSTR 2B and GSTR 3B?
GSTR 2B is a document that is generated on the 14th of every month for the previous month. It provides an auto-drafted input tax credit statement for the recipient taxpayers. The document is generated based on the data filed by the supplier taxpayers in their GSTR 1, GSTR 5, and GSTR 6 returns.
GSTR 3B, on the other hand, is a monthly summary return filed by taxpayers to declare their sales and purchases along with the tax liability. It is a self-declaration of the taxpayer’s tax liability and input tax credit for a given month.
Why is there a mismatch between GSTR 2B and GSTR 3B?
The mismatch between GSTR 2B and GSTR 3B arises due to the following reasons:
Non – uploading / delay in filing of returns by the supplier – If the supplier doesnt file its GSTR-1 on or before the due date, then the ITC shall not be available in the recipient’s GSTR 2B of that month. This is the most common reason for the ITC mismatch.
Amendments and Cancellations – The supplier may make amendments or cancellations in their GSTR 1 return after the generation of GSTR 2B. In such cases, the changes made by the supplier will not reflect in the recipient’s GSTR 2B, leading to discrepancies in the input tax credit claimed.
Errors in Data: There may be errors in the data filed by the supplier in their GSTR 1 return, which can lead to discrepancies in the input tax credit claimed by the recipient taxpayer in their GSTR 3B return.
How can taxpayers resolve the mismatch between GSTR 2B and GSTR 3B?
To resolve the mismatch between GSTR 2B and GSTR 3B, taxpayers can follow the following steps:
Verify/ Reconcile the Data – The recipient taxpayer should verify the data in their GSTR 2B and GSTR 3B returns and identify the discrepancies.
Contact the Supplier – The recipient taxpayer should contact the supplier and request them to make the necessary amendments or cancellations in their GSTR 1 return, if required.
Rectify the Errors – If there are no errors in the data filed by the supplier, the recipient taxpayer should rectify the same in their GSTR 3B return.
Claim Correct Input Tax Credit – The recipient taxpayer should claim only the input tax credit that is available to them as per their GSTR 2B and GSTR 3B returns. They should not claim any excess input tax credit, as it may lead to unnecessary litigation.
In conclusion, the mismatch between GSTR 2B and GSTR 3B is a common issue faced by taxpayers, and it is important to resolve the same to avoid any unnecessary disputes with the tax authorities. The taxpayers are advised to verify their returns carefully and seek the advice of a tax expert if required. With the right approach and guidance, taxpayers can ensure that they comply with the tax laws and claim the input tax credit that is rightfully available to them.