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LoansJagat Team
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6 Min
17 Jul 2025
Tanvi Sharma, who operates a mid-sized textile business in Ahmedabad, filed her GSTR-3B returns in March 2025. She claimed ₹2.75 lakh as input tax credit (ITC) based on GSTR-2 data extracted from her enterprise resource planning (ERP) system. However, the GST department later issued a notice highlighting discrepancies in her claim.
Upon internal review, Tanvi discovered that she had referred to the dynamic GSTR-2 return rather than the static, system-generated GSTR-2B, which is the legally accepted document for ITC claims. As a result, she was required to reverse ₹47,600 in ITC and pay interest at 18 per cent per annum on the excess amount.
This case underscores the critical importance of distinguishing between GSTR-2 and GSTR-2B when filing returns. Referring to the correct return format can help taxpayers avoid unnecessary reversals, penalties, and interest payments.
GSTR-2 was originally designed as a dynamic, editable return allowing businesses to claim Input Tax Credit (ITC) by verifying and modifying invoices uploaded by their suppliers.
GSTR-2B, on the other hand, is a static, read-only statement introduced by the GSTN (Goods and Services Network)in August 2020. It auto-populates the eligible and ineligible ITC based on the invoices uploaded by suppliers in GSTR-1, GSTR-5, and GSTR-6, and is generated monthly for every taxpayer on the 14th of the following month.
Correctly reconciling ITC is essential for a business to ensure:
GSTR-2B is now the legal benchmark for claiming ITC as per recent CBIC circulars. This means businesses should not rely on GSTR-2 for ITC, even though it may contain real-time data, as it is subject to change and lacks legal validity.
Example: A company purchases raw materials worth ₹10,00,000 in a month, with 18% GST, i.e., ₹1,80,000 as Input Tax Credit (ITC). One of its suppliers fails to file GSTR-1 on time. As a result, only ₹1,45,000 appears in the company’s GSTR-2B, the legal document for ITC claims.
Since ITC can only be claimed as per GSTR-2B, the business loses out on ₹35,000 of eligible credit temporarily. This directly impacts cash flow and may invite notices if the discrepancy is not resolved. Relying on GSTR-2 instead would have shown the full ₹1,80,000, but claiming based on it is now legally invalid as per recent CBIC guidelines.
GST reconciliation involves matching purchase data with the data available in GSTR-2 B. This helps:
Without proper reconciliation, businesses risk reversals of ITC, interest charges, and compliance scrutiny from GST authorities.
Example: According to a recent GSTN report, nearly 85% of ITC mismatches in the financial year 2024–25 were due to taxpayers mistakenly using GSTR-2 data instead of GSTR-2 B. This confusion often led to the claiming of ineligible or excess ITC, resulting in demand notices and reversals during audits.
To understand the differences between GSTR 2 and GSTR 2B, let’s look at their definitions, working principles, and how they impact your Input Tax Credit (ITC) claims.
GSTR-2 was originally conceptualised as a dynamic return that would reflect real-time data based on what suppliers uploaded in their GSTR-1 returns. The idea was to give recipients full visibility into invoices, allowing them to edit, validate, or reject entries.
However, there were some practical problems:
In fact, due to these challenges, GSTR-2 filing was suspended in July 2017, and it is currently not a part of the active GST return cycle.
On the other hand, GSTR-2B is a static, auto-drafted statement introduced by the GSTN in August 2020. It’s generated for every taxpayer on the 14th of each month, capturing the data filed by suppliers up to the 13th of the same month.
In short, GSTR-2B is now the standard for ITC claims, not GSTR-2.
From a legal perspective, GSTR-2B has become the binding reference document for claiming input tax credit under the CGST regime.
As per Rule 36(4) of the Central Goods and Services Tax Rules, taxpayers can only claim ITC if the invoices are reflected in GSTR-2 B. No other return or report, including GSTR-2, qualifies.
This rule was reinforced by Notification No. 82/2020 – Central Tax, which further limited the provisional ITC that could be claimed based on unreflected invoices.
Example: As of early 2025, over 67% of ITC-related show-cause notices involved businesses that used GSTR-2 data instead of GSTR-2 B. Many of these were penalised under Section 73 or 74 of the CGST Act for wrongful claims. Recovery proceedings in such cases can lead to penalties ranging from 10% to 100% of the tax amount.
So, if you're still relying on GSTR-2, it’s time to stop.
When GSTR-2 was operational (before being shelved in July 2017), the process was:
The entire workflow was complex, time-consuming, and heavily manual. This led to delays, mismatches, and compliance fatigue.
That’s why GSTR-2 was suspended and replaced with a non-editable, static format, GSTR-2 B.
The process for GSTR-2B is completely automated, and here’s how it works:
No action is required from your side to generate or file it. You simply download and reconcile it with your purchase register.
Example: Let’s say Meena Enterprises, a Delhi-based wholesaler, imported goods from the UAE in February 2025. The import invoices were processed via ICEGATE and automatically reflected in Meena’s GSTR-2B for March 2025. This allowed them to claim ITC seamlessly without needing any manual entries.
When it comes to claiming Input Tax Credit (ITC), the distinction between GSTR 2 and GSTR 2B can significantly affect a business's GST compliance. GSTR 2, being dynamic, often shows invoices that do not appear in GSTR 2B due to late supplier filings. However, under the current GST law, only the invoices reflected in GSTR 2B are eligible for ITC claims.
Example: In FY 2023–24, companies that claimed ITC based on GSTR 2 instead of 2B faced a disallowance of 12% to 18% during GST audits. This resulted in blocked working capital and increased scrutiny.
This makes it crucial for businesses to ensure that their purchase records align with GSTR 2B before proceeding with ITC claims.
Downloading your GSTR 2B is a quick and simple process through the official GST portal. This monthly statement is crucial for accurate ITC claims and smooth return filing.
Important note: GSTR 2B is a static document. It reflects all invoices uploaded by your suppliers up to 11:59 PM on the 13th of the following month. This data is auto-generated and cannot be edited.
While GSTR 2 helps in internal monitoring and vendor coordination, GSTR 2B is the legally mandated document for claiming Input Tax Credit. Businesses must use GSTR 2B for every ITC claim filed in GSTR 3B to avoid penalties, reversals, and audit issues. With evolving GST rules, staying aligned with GSTR 2B data ensures smoother compliance and reduced legal risk.
Is GSTR 2 still required?
No. GSTR 2 has been suspended since July 2017.
Can I claim ITC using GSTR 2?
As per Rule 36(4), ITC should be claimed based on GSTR 2B only.
What if my supplier uploads after the 13th?
The invoice will reflect in next month’s GSTR 2 B.
Where can I find GSTR 2B?
Visit: https://www.gst.gov.in/
Can GSTR 2B be edited?
No. It’s a system-generated read-only document.
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LoansJagat Team
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