Ever since its introduction in 2017, the Goods and Services Tax, or GST has been an essential component of tax payment for individuals and businesses across the country. There are a number of transactions that fall under the purview of GST and each requires a different form when it comes to tax filing. One such form that is essential for GST-registered individuals and businesses, is the form GSTR 2.
Here’s what you need to know about form GSTR 2 as well as the details of filing a GSTR 2 return:
The GSTR 2 is essentially a tax return form that is to be filled by an individual or business registered with GST on a monthly basis. The GSTR 2 return essentially contains all the details related to the purchases i.e., inward supply made by a GST-registered entity in a given month.
When you procure supplies from vendors, the information from their sales returns will reflect in the Goods and Services Tax Network (GSTN) portal. This information will be available to you in the form of an auto-generated Form GSTR 2A, which can then be used by you to fill out your GSTR 2 statement.
The ultimate purpose of the GSTR 2, therefore, is to ensure that the information in returns filed by the seller (ie. your vendor) matches the information in returns filed by you, the buyer. This helps avoid discrepancies and ensures that there is transparency in the transaction.
As mentioned before, every individual or business that is registered with GST needs to file a GSTR 2 for their purchases. However, there are some exceptions to this rule. The following entities are not required to file a GSTR 2 return:
It is important to note that in order to file a GSTR 2 return, you must keep a detailed account of invoices for all your transactions, including transactions relating to non-GST supplies. Also, during the return filing process, you will be required to furnish your GSTIN as well as confirm your identity via OTP on your registered number or Aadhaar based sign-in option.
The GSTR 2 filing process requires the GST-registered individual or business to fill out 13 essential points of information. Here are the details you need to fill out according to the GSTR 2 format:
1. Name of the Taxpayer.
2. GSTIN i.e., the unique PAN-based 15-digit Goods and Services Taxpayer Identification Number provided to all GST-registered entities.
3. Details of the Inward Supplies other than the supplies that attract a reverse charge.
4. Inward supplies on which tax is to be paid as reverse charge - details about the purchased goods that do attract a reverse charge.
5. Capital goods and inputs received from SEZ units or overseas on a bill of entry.
6. Amendments to details of inward supplies that were supplied in returns for previous periods of taxation.
7. Supplies availed from composition taxable persons, GST supplies received that are exempt/nil rated, and non-GST supplies.
8. Input Tax Credit, or ITC, received from a registered Input Service Distributor.
9. Details about any TDS (Tax Deducted at Source) and TCS (Tax Collected at Source)received such as from an e-commerce platform.
10. A consolidated statement detailing all advances paid and adjusted on account of receipt of supply.
11. Details about any reversal or reclaim of input tax credits.
12. Details about any reduction or addition of sum in output tax in case of mismatch or other cases.
13. HSN wise summary of goods purchases as inward supplies. In this context, HSN refers to the “Harmonized System of Nomenclature”- a system that is commonly used for the systematic classification of goods.
As a tax paying individual or business owner that is registered with GST, it is vital to be informed about tax return forms such as the GSTR 2. Apart from the GSTR 2 and its specific importance in terms of inward supplies, there are various other forms related to GST that it might also be useful to know about.
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