The Central Board of Indirect Taxes and Customs (CBIC) consistently takes initiatives to simplify the tax reconciliation process for taxpayers. One such CBIC notification No. 20/2024 released on October 8, 2024, has implemented a crucial amendment to ITC reconciliation in Form GSTR-9 under Central Goods and Services Tax (CGST) Rules, 2017. This amendment substitutes ITC Reconciliation done with GSTR-2A with GSTR-2B, as applicable from FY 2023-24. This marks a significant impact on the GST reconciliation process, especially concerning ITC claims, and streamlines the process for better accuracy and reduced errors.
Let us discuss the difference between ITC reconciliation as per GSTR-2A and GSTR-2B and what this means for taxpayers.
Former Process- ITC Reconciliation with GSTR-2A
GSTR-2A is a dynamic form that reflects all invoices filed by suppliers in their GSTR-1 return. It used to auto-populate invoices when suppliers filed them. Prior to this notification, as per sub-rule (4) inserted into Rule 36 of the Central Goods and Services Rules, 2017, taxpayers were required to auto-populate their ITC details in GSTR-9 as per GSTR-2A. However, it was a live document. This meant that GSTR-2A updated automatically every time a supplier made changes to their GSTR-1 return. This affected the ITC claim process for taxpayers as the ITC they claimed was subject to frequent changes.
ITC as per GSTR-2A appeared in the GSTR-9 form as follows:
| 8 | Other ITC Related Information | ||||
| Description | IGST | CGST | SGST | Cess | |
| A | ITC as per GSTR-2A (Table thereof) | – | – | – | – |
| B | ITC as per sum total of 6(B) and 6(H) above | – | – | – | – |
Updated Process- ITC Reconciliation with GSTR-2B
To tackle the dynamic nature of Form GSTR-2A and to prevent errors due to frequent changes from suppliers, CBIC has now replaced GSTR-2A with GSTR-2B in the process. GSTR-2B is a static ITC statement generated on the 14th of every month. All invoices updated by suppliers post-11th (due date to file GSTR-1) will reflect in next month’s GSTR-2B. These invoices will not be a part of this month’s GSTR-2B. This way, GSTR-2B will provide a fixed reference for ITC calculations. This will simplify the process and eliminate errors due to constant changes.
For your understanding, here is an official advisory on GSTR-2B issued by the government: GSTR-2B Official Advisory
This is how ITC details from GSTR-2B reflect in Form GSTR-9:
| 8 | Other ITC Related Information | ||||
| Description | IGST | CGST | SGST | Cess | |
| A | ITC as per GSTR-2B (Table 3 thereof) | <Auto> | <Auto> | <Auto> | <Auto> |
| B | ITC as per sum total of 6(B) and 6(H) above | – | – | – | – |
How Does This Impact GSTR-9 Filing?
For taxpayers filing GSTR-9, the shift from GSTR-2A to GSTR-2B will affect the way they reconcile their ITC details in Tables 8A to 8D. Here’s a table comparing the old process and the new process:
| Table in GSTR-9 | Old Process (Using GSTR-2A) | New Process (Using GSTR-2B) |
| Table 8A | Auto-populated based on GSTR-2A data, but subject to change | Will auto-populate from GSTR-2B with static data |
| Table 8B | Required manual reconciliation with supplier data | Will be easier as GSTR-2B provides fixed data |
| Table 8C | Often caused discrepancies due to real-time changes | Expected to reduce errors with fixed ITC details |
| Table 8D | Final ITC claim based on continuously changing data | More accurate and reliable claims with GSTR-2B |
Benefits of Switching to GSTR-2B
- Consistency in ITC Data: GSTR-2B is static in nature. Taxpayers will no longer be concerned with changes in supplier data after filing the return. This will make ITC reconciliation easier.
- Reduced Errors and Discrepancies: The implementation of GSTR-2B reduces the possibilities of differences between ITC availed and supplier statements.
- Simplified Filing Process: Taxpayers can now align their ITC claims better without the need to keep tracking GSTR-2A constantly.
Conclusion
The switch from GSTR-2A to GSTR-2B for ITC in the GSTR-9 filing is a significant step by the government to simplify reconciliation for taxpayers. This amendment will simplify compliance, reduce mismatch errors, and add to the accuracy and transparency of ITC claims.
