2B Or Not 2B in GSTR 9 and 9C of FY 23 24 ? Explained in 12 Simple Scenarios by CA Umesh Sharma

Summary

In this detailed video, C Umesh Sharma provides insights into the GST filing process for GSTR 9 and GSTR 9C for the financial year 2023-2024. He addresses common queries regarding the reporting of ITC (Input Tax Credit) in the forms, highlighting the legal provisions under Section 162a, Rule 364, and Rule 37. Through 12 practical scenarios, Sharma explains the potential challenges, such as discrepancies between GSTR 2B and GSTR 3B, and offers solutions to avoid errors and minimize the risk of litigation. The session provides valuable advice on how to manage ITC claims and reversals effectively for both the current and previous financial years.

Takeaways

• 😀 GSTR 9 and 9C filing for the financial year 2023-24 must be completed by the first week of December.
• 😀 The key issue being discussed is the impact of GSTR 2B on GSTR 9 and 9C reporting, especially regarding ITC claims.
• 😀 Section 162A and Rule 364 are crucial legal provisions that ensure ITC is claimed based on the details shown in GSTR 2B, which must align with GSTR 1 and 3B filings.
• 😀 Rule 37A clarifies that if a supplier files GSTR 3B after September, the ITC claim might need to be reversed and interest could be applicable if reversed after November.
• 😀 Reporting in GSTR 9 and 9C requires cross-checking the client's GSTR 3B filings to ensure that the ITC in GSTR 2B matches the claimed ITC.
• 😀 Scenario-based examples are used to demonstrate different possible ITC reporting issues in GSTR 9 and 9C, such as discrepancies between claimed ITC and what's reflected in 2B.
• 😀 In cases where ITC is claimed in 3B but not reflected in 2B (or vice versa), there can be serious issues, including notices from the department and potential litigation.
• 😀 If a supplier hasn't filed their GSTR 1 or 3B, it can result in a violation of legal provisions and may lead to the reversal of ITC using DRC-03, with interest applied after November.
• 😀 If there is a mismatch between ITC in 2B and books, it needs to be addressed carefully in GSTR 9C, with proper reporting in relevant tables and notes.
• 😀 The latest advisory from December 2024 provides guidance on claiming and reversing ITC, stressing that even if goods are received in the next financial year, ITC should be claimed correctly and reversed if necessary.
• 😀 For accurate reporting in GSTR 9C, all ITC discrepancies, reversals, and reconciliations must be documented in the notes, with clear explanations provided for any mismatches in ITC claims.

Q & A

What is the main focus of the video script?

The main focus of the video script is to provide a detailed explanation of how to fill out GST returns, specifically GSTR 9 and GSTR 9C, for the financial year 2023-24, with a special focus on the 'To Be' (2B) reporting and the issues surrounding ITC (Input Tax Credit) claims and reversals.

What is the significance of the legal provisions mentioned in the script?

The legal provisions, including Section 162A and Rule 364, highlight the importance of matching the ITC claims in GSTR 3B with the invoices shown in GSTR 1 and 2B. ITC is only available when the corresponding invoices are filed and reflected in the 2B of the taxpayer.

What happens if the supplier fails to file GSTR 3B on time?

If the supplier fails to file GSTR 3B by the required date, the taxpayer will need to reverse the ITC claim taken in GSTR 3B. Additionally, interest will be charged on the reversed ITC if it is done after the stipulated date.

What is the importance of cross-checking GSTR 2B and GSTR 3B?

Cross-checking GSTR 2B with GSTR 3B is crucial because discrepancies between the two could lead to errors in ITC claims. It ensures that ITC is correctly claimed only when the corresponding invoices are filed by the supplier.

What is the role of the 12 scenarios discussed in the script?

The 12 scenarios in the script illustrate various possible situations that could arise during the GST filing process, showing the correct way to report ITC claims and reversals in both GSTR 9 and GSTR 9C. Each scenario helps clarify potential issues related to mismatches between the ITC in 2B and 3B.

What are the consequences of discrepancies between the ITC shown in GSTR 2B and the ITC claimed in GSTR 3B?

Discrepancies can lead to the department issuing notices and potential litigation. If the ITC is claimed in GSTR 3B but not reflected in GSTR 2B, the taxpayer might be required to reverse the excess ITC, along with interest charges if done after the due date.

What is the significance of the DRC 03 process in case of excess ITC claim?

The DRC 03 process is used to reverse the excess ITC claimed in GSTR 3B if it is found that the ITC was not reflected in GSTR 2B. If the reversal is done before the deadline, no interest is applicable, but if done later, interest will be charged from the date of availing the excess ITC.

What is meant by the term 'reconciliation' in the context of GST returns?

Reconciliation refers to the process of matching the ITC claims in GSTR 2B, 3B, and the books of accounts to ensure consistency. Any discrepancies found need to be corrected, and proper adjustments, like reversals or claims, should be made in the next returns.

What are the rules that govern the reversal of ITC under GST?

The rules that govern ITC reversal include Rule 37A, which deals with the reversal if the supplier fails to file GSTR 3B. If the supplier does not file the return by the due date, the taxpayer must reverse the unclaimed ITC, which may also involve interest charges.

How should a taxpayer handle ITC claims for goods received in a subsequent financial year?

If goods are received in a subsequent financial year and the ITC is claimed in the current year's GSTR 3B, the taxpayer should ensure that the corresponding entries are made in the next year's return. Additionally, the taxpayer must ensure that the ITC is correctly claimed and reversed if needed in line with the legal provisions.