On completion of this lesson, you will be able to understand:
· Special Feature of GSTR-2
· Matching of Supplies
· Section 38 – Furnishing Details of Inward Supplies
· Mismatch between Returns
· Action by supplier and Recipient
Please go through the Second Video of Chapter 12.
Special feature of GSTR-2
The special feature of GSTR-2 is that the details of supplies received by a recipient can be auto populated on the basis of the details furnished by the counterparty supplier in his GSTR-1.
So it shows all Supplies received by a Taxable Person i.e. Input goods and services by the Taxable Person from various suppliers. He can claim Input Tax credit on supplies received from various suppliers based on GSTR-2 Return.
Matching of Supplies
Supplies mentioned in the GSTR-2 Return should match with the GSTR-1 of the Suppliers. Input Tax Credit will be available only upon successful matching of GSTR-2 with GSTR-1 of the Suppliers.
If invoices in GSTR-2 do not match with invoices in counter-party GSTR-1, the ITC will be reversed if the mismatch continues even after it is made known to both and still it is not rectified.
Mismatch can be because of two reasons.
1. Mistake at the side of the recipient, and in such a case, no further action is required.
2. Invoice was issued by supplier but he did not upload it and pay tax on it. In such a case, recovery action shall be taken against the supplier. In short, all mismatches will lead to proceedings if the supplier has made a supply but not paid tax on it.
Action to be done by the Recipient
The recipient can himself feed the invoices not uploaded by his supplier. The credit on such invoices will also be given provisionally but will be subject to matching. On matching, if the invoice is not uploaded by the supplier, both of them will be intimated. If the mismatch is rectified, provisional credit will be confirmed. But if mismatch continues even after intimation, the credit provisionally allowed will be reversed.
Responsibility of the Supplier
At any stage, but before September of the next financial year, supplier can upload the invoice and pay duty and interest on such missing invoices in his GSTR-3 of the month in which he uploaded the invoice.
If the supplier uploads the invoice at any time after the reversal but by September of the next financial year, the credit reversed earlier gets restored along with refund of the interest paid during reversal.
Recovery Action will be initiated against the Supplier if he did not furnish the invoice details or not paid taxes.
Extra Details to be fed by the Taxable Persons
While a large part of GSTR-2 will be auto-populated, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc.