GSTR-2 - What is GSTR-2? How to file GSTR-2?

Every GST-registered person is obliged to submit GSTR-2, a purchase return. The GSTR-2 purchase return requires taxpayers to provide information pertinent to their inward supplies.

What is GSTR-2?

The GSTR-2 is a monthly tax return that includes all of your purchases for the previous month. The data from registered vendors' sales returns (GSTR-1) will be available on the GSTN portal as GSTR-2A for use in your GSTR-2 when you make purchases from them. You can review this data before filing your return, amend it as needed, and add any information that wasn't automatically filled in. The seller will be informed and allowed to modify their return using a GSTR-1A form if you change the information on your GSTR-2A and file it as a GSTR-2.

When to file GSTR-2?

Before the 15th of the next month, the specifics of the purchases made during a given month must be filed. For instance, if you need to submit a GSTR-2 form for March, you must do it by April 15th. Similarly, the GSTR-2 for May must be completed by the 15th, and so on.

Who is eligible to file GSTR-2?

Every person or organisation registered for GST must submit a GSTR-2 for each purchase they make. There are a few exceptions to this rule, though. The following entities are exempt from submitting a GSTR-2 return:

• Dealers in composition

• Input Services Distribution  

• Taxable entities that are not residents

• individuals who collect TCS

• Those who collect TDS 

• Service Providers of Online Information and Database Access or Retrieval (OIDAR)

You must maintain a thorough record of all your transactions, including those involving non-GST supply, to submit a GSTR 2 return. You will also be required to provide your GSTIN and validate your identification during the return filing process using an OTP on your registered number or the Aadhaar-based sign-in option.

Pre-requisites for filing GSTR-2

The GSTR-2 return filing process also requires an individual to meet a specific set of requirements and have a particular set of documents on their person, just like it does in the case of any other registration process involving the government. The following state the requirements:

• Must possess the 15-digit PAN-based GSTIN and be a registered taxpayer with the GST council.

• Not possessing a Unique Identification Number or a composition vendor (UIN). Additionally, they should not be a GST-registered non-resident foreign taxpayer. 

• Use the information from your GSTR-2A form, which you may find in your GST portal. They must carry complete invoices for their transactions to cross-verify this data. This also covers intrastate, interstate, business-to-business, and retail transactions. The same applies to purchases made with supplies that are either exempt from GST or categorised as non-GST products.

• Finally, you will require an OTP that will soon be delivered to your phone, enabling you to confirm your return using either a digital signature certificate or an electronic verification code. Additionally, you can use an Aadhaar-based e-sign filing system to submit your GST returns.

What is included in the GSTR-2 form?

The GSTR-2 form requires thirteen important fields to be filled. These are discussed below:

1. The taxpayer's name

2. All GST-registered firms are given a unique 15-digit Goods and Services Taxpayer Identification Number (GSTIN) based on their PANs.

3. Information about the inbound supply other than those that are subject to a reverse charge

4. Information regarding the purchased items that are subject to a reverse charge for inward supplies

5. Capital goods and inputs received on a bill of entry from SEZ entities or abroad.

6. Amendments to information about inbound supply that was included in filings for earlier taxation periods

7. Supplies obtained from taxable composition individuals, exempt or zero-rated GST supplies received, and non-GST supplies.

8. ITC, or input tax credit, obtained from an authorised input service distributor

9. Information on any TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) received, such as from an online shopping site.

10. A combined statement showing all advances made and adjusted for supplier receipts

11. Information on any cancellation or reclaiming of input tax credits

12. Information regarding any production tax additions or decreases in case of mismatch or other situations

13. HSN's concise list of commodities purchased for internal supplies. HSN refers to the "Harmonized System of Nomenclature" in this context, a widely used method for the systematic classification of goods.

To know the step-by-step process of filing GSTR-2, follow our guide to filing GSTR-2.

What is the Late Fee and Penalty for GSTR-2?

Individuals will incur a late fee each day they postpone the filing procedure if they fail to submit their GSTR-2 by the deadline or for a specific month. It works because the registered taxpayer will receive a fee of Rs. 100 per day, with Rs. 5,000 maximum.