The GSTR-2 is a monthly return that businesses must file as a summary of their inbound purchases. Companies must file GSTR returns as part of their tax management and planning. Companies must be aware of the GSTR2 return structure and due date to remain compliant. We’ll now look at how to file a GSTR 2 return online, as well as the format.
What Is the GSTR 2 Return Filing?
The GSTR 2 is a monthly return that allows businesses to summarise information about their inbound taxable goods and services. All registered traders must file their GSTR 2 returns by the specified deadline. In addition, the GSTR 2 return must be filed in a specified format for the tax authority to accept it.
The majority of the categories and details in GSTR 2 auto-populate based on the counterparty’s information. This not only improves accuracy but also assures that filing GSTR 2 returns takes as little time and effort as possible.
When a seller files a GSTR 1 return, the information is sent to the GST portal’s GSTR-2A, which is an automatic purchase-related return. Before filing the GSTR-A, dealers must double-check the information it generates. For GST compliance, businesses currently rely on tax management service providers like Vakilsearch. Companies benefit from such services since they manage and file all required compliance returns on time and in the approved format.
GSTR-2’s Importance
The GSTR return comprises information on all of the company’s purchases over the course of a month. The return effectively summarises all of a registered dealer’s transactions. A list of purchases that deal with the reverse charge mechanism is also included.
The GSTR 2 return filing is used by the government to double-check and validate information provided by sellers in GSTR 1. As a result, the return aids the government in completing the buyer-seller reconciliation procedure. This procedure simply assists buyers and sellers in matching taxable sales and taxable purchases.
The filing of GSTR 2 returns makes it easier for the government to verify Input Tax Credits. Only if the details in both the GSTR 2 and GSTR 1 match does the government allow ITC on purchases. All registered dealers must file the GSTR 2 return in the approved format whether or not they have conducted transactions.
Due Date for GSTR 2 Returns
The GSTR 2 return is due on the 15th of the following month, according to the GST Act. The government has provided a five-day grace period between submitting GSTR 1 and GSTR 2 to correct errors and anomalies. Businesses with yearly revenues of less than 1.5 crores can also file quarterly filings.
How to File GSTR 2 Return Online
⦁ The first step is to gather all of the necessary invoices, bills, and purchase records.
⦁ All relevant invoices must be uploaded or imported into the GSTR 2 return format on Excel.
⦁ After that, you must choose which purchase bills are subject to the reverse charge mechanism and mark them separately.
⦁ Before proceeding, make sure to add the proper tax amount to all such invoices and that all invoices have a valid GSTIN.
⦁ Finally, double-check and validate the information you’ve provided before uploading it to the GST portal.
Return Format for GSTR 2
Individuals must be cautious while submitting the GSTR 2 because it cannot be changed once it has been submitted. As a result, business owners must closely conform to the GSTR 2 return structure. As a result, the filing will be more likely to be successful.
Any errors can be corrected while filing the next month’s return. As a result, if you make a mistake on your GSTR 2 return in September, they can fix it in October.
Thirteen sections make up the GSTR 2 return format:
1. GSTIN (GST Identification Number): 15 digits (Goods and Services Taxpayer Identification Number)
2. Taxpayer name is automatically filled in
3. The month and year in which you filed
4. Inward Supplies — the rate, GST amount, type, and ITC, as well as details of items on reverse charge mechanism, are usually auto-populated from GSTR-1.
5. By way of a Bill of Entry, capital goods from other countries/special economic zones are imported.
6. Returns from preceding periods that have been amended
7. Composition dealers’ inbound goods and other nil-rated items
8. Credit was given to the input service distributor.
9. Credit was given to TDS and TCS.
10. Reclaiming or reversing the Input Tax Credit
11. Advances paid or modified Input Tax Credit reclaim or reversal consolidated statement
12. Changes in the amount of output tax owing to mismatches or other factors
13. HSN’s list of inbound supplies
GSTR 2 Return Filing Noncompliance
If a company fails to file the GSTR 2 on time, it will be unable to file the GSTR 3, resulting in a vicious cycle. In short, failing to file even one return might result in significant fines and penalties in the long term. If there is a delay in submitting, business owners will be charged a late fee as well as an 18 percent interest rate on the amount due until it is paid.
From the 16th of the month until the individual completes the payment, late fees will be charged. According to the GST Act, the late cost for both the CGST and the SGST is ₹100 per day, with a total fine of ₹200. The IGST, on the other hand, does not have a late fee, and the maximum penalty that can be imposed is $5,000. As a result, businesses must ensure that all of their tax returns are filed on time and in the correct manner.
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