As per India’s GST laws, all registered businesses have to ensure they file GST returns on time to maintain compliance. The GSTR2 is a monthly return that contains details regarding the inward purchases of companies.
The GSTR-2 is a mandatory monthly return that companies need to file as a summary of their inward purchases. GSTR return filing is an integral part of tax management and planning for companies. To maintain compliance, companies need to know about the GSTR2 return format and GSTR 2 return due date. We will now look at how to file GSTR 2 return online and the format for the same.
What Is the GSTR 2 Return Filing?
The GSTR 2 is a monthly return that helps companies summarise details regarding their inward supply of taxable goods and services. All registered dealers have to ensure they complete the GSTR 2 return filing before the stipulated due date. Additionally, the GSTR 2 return must be filed in a specific format to be accepted by the tax department.
Most of the headings and details under GSTR 2 auto-populate themselves based on information provided by the counterparty. Not only does this help with improving accuracy, but it also ensures that GSTR 2 return filing takes only minimal time and effort.
Whenever a seller files a GSTR 1 return, information on it is transferred to GSTR-2A, which is an automatic purchase-related return created by the GST portal. Dealers must verify the details generated by the GSTR-A before filing the same. Companies nowadays rely on tax management service providers, like Vakilsearch to maintain GST compliance. Such services help companies by managing and filing all the required compliance returns on time in the prescribed format.
Importance of GSTR-2
The GSTR return contains details regarding all the purchases made by the company in a month. The return essentially summarises all the transactions undertaken by a registered dealer. It also includes a list of purchases that deal with the reverse charge mechanism.
The government uses the GSTR 2 return filing to double-check and verify details furnished by sellers in GSTR 1. The return, therefore, helps the government in completing the process of buyer-seller reconciliation. This process essentially helps in matching taxable sales and taxable purchases made by buyers and sellers.
The GSTR 2 return filing makes it easier for the government to complete Input Tax Credit verification. The government allows ITC on purchases only if the details in both the GSTR 2 and GSTR 1 match. All registered dealers have to file the GSTR 2 return in the prescribed format, irrespective of whether they have made transactions or not.
The Following Individuals Need Not File the GSTR 2 Return:
- Input service distributors
- Composition scheme dealers
- Non-resident taxable individuals
- Individuals who collect TCS or deduct TDS
- Suppliers of online information and those involved in database access and retrieval services who pay tax themselves
GSTR 2 Return Due Date
As per the GST Act, the GSTR 2 return due date is the 15th of the coming month. The government has allowed a gap of five days between filing GSTR 1 and GSTR 2 to correct errors and discrepancies. Also, businesses that make less than ₹1.5 crores annually may opt to file quarterly returns.
How to File GSTR 2 Return Online
- First and foremost, you need to collect all the required invoices, bills, and purchase filings
- Upload or import all the required invoices into the GSTR 2 return format on Excel
- You must then select which purchase bills fall under the reverse charge mechanism and flag them separately
- Ensure that you add the appropriate tax amount to all such invoices and make sure all invoices have a valid GSTIN before proceeding
- Lastly, verify, double-check, and validate the data entered and upload the same onto the GST portal.
GSTR 2 Return Format
Individuals need to be careful when submitting the GSTR 2 as it cannot be revised once filed. Therefore, business owners need to ensure they adhere to the GSTR 2 return format strictly. Doing so will help ensure the filing is successful.
Any mistakes made may be revised while filing the return for the next month. Hence, if you make a mistake in the GSTR 2 return for September, they can rectify the same in October.
The GSTR 2 Return Format Consists of Thirteen Sections:
- 15-digit GSTIN (Goods and Services Taxpayer Identification Number) – auto-populated
- Taxpayer name – auto-populated
- Month and year of filing
- Inward Supplies – mostly auto-populated from GSTR-1 along with the rate, GST amount, type, and ITC, and details of items on reverse charge mechanism
- Capital goods from overseas/special economic zones via Bill of Entry
- Amendments to returns for earlier periods
- Inward supplies from composition dealers and other nil-rated supplies
- Input service distributor credit received
- TDS and TCS credit received
- Consolidated statement regarding advances paid or adjusted
- Input Tax Credit reclaim or reversal
- Change of output tax amount due to mismatch or other reasons
- HSN summary of inward supplies
Non-compliance of GSTR 2 Return Filing
In case a business does not file the GSTR 2 on time, they will not be able to file GSTR 3, leading to a vicious cascading effect. In short, missing even one return filing can lead to heavy fines and penalties in the long run. In case there is a delay in filing, business owners will have to pay a late fee and an 18% interest on the sum to be paid till payment is made.
Late fines will be levied from the 16th of the month to whenever the individual completes the payment. According to the GST Act, the late fee is ₹100 per day under both the CGST and SGST, leading to a total fine of ₹200. However, there is no late fee on the IGST, and the maximum penalty that may be levied is ₹5,000. As a result, companies must make sure they complete all their return filings on time and in the prescribed format.
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