Input tax credit: why your GSTR-2B rarely matches your purchase register
Most GST notices start as a small monthly difference nobody chased. Here is what causes the mismatch and how to deal with it while the period is still recent.
CA Rahul Yadav 3 min read
Almost every business we take on has the same unexamined difference sitting in its GST records: the input tax credit claimed in the returns does not quite agree with what GSTR-2B shows as available. The gap is usually small in any one month, which is exactly why it survives — until a year of small gaps becomes a number the department asks about.
What GSTR-2B actually is
GSTR-2B is a static statement generated by the portal for each period, listing the input credit available to you based on what your suppliers have reported in their own returns. Unlike its predecessor it does not change after generation, which makes it a fixed reference point for the period.
The important word is 'reported'. Your credit depends not on whether you hold a valid invoice and have paid the supplier, but on whether the supplier has told the department about the transaction.
The four causes, in order of frequency
First, the supplier has not filed for the period. Their invoice is genuine, your payment is genuine, and the credit simply is not there yet. It usually appears once they file, in a later period.
Second, the supplier has reported the wrong GSTIN — often a sister concern of yours, or a digit transposed. The credit exists but has gone somewhere else.
Third, a timing difference. You recorded the purchase in March; the supplier reported it in April. Nothing is wrong, but the two periods will not agree.
Fourth, the credit is blocked or ineligible — motor vehicles, works contract services in certain situations, goods lost or written off. Here GSTR-2B may well show the credit, and claiming it is still incorrect.
Why the fourth one matters most
The first three are reconciliation problems that resolve themselves with follow-up. The fourth is a substantive error: the credit appears in GSTR-2B, the system offers it to you, and taking it is still wrong.
This is the difference that tends to be found in an annual reconciliation or a departmental audit, with interest running from the date the credit was taken.
A practical monthly routine
Download GSTR-2B for the period as soon as it is generated, before preparing GSTR-3B rather than after. Match it against your purchase register by GSTIN and invoice number, and separate the differences into the four categories above.
Chase the missing suppliers the same month, while someone still remembers the transaction. Keep a running note of timing differences so they are not counted twice. Mark blocked credits in your purchase register at the point of entry, not at the point of filing.
None of this is difficult. It is simply much easier in the month than eleven months later.
None of this changes what you are entitled to claim. It changes when you find out, and finding out in the month is considerably cheaper than finding out in a notice.