Overview of New GST Returns
(Applicable from April 2020)
- 1. Background
The GST Council approved a new simplified GST return format in its 27th Council meeting. The new GST return aims at enhancing transparency and accuracy of the return filing process. The Council has decided that the new return filing system will be implemented from April 2020. Under this New Return System, there will be one main return GST RET-1 and 2 along with annexures GST ANX-1 and GST ANX-2. This return will need to filed on a monthly basis, except for small taxpayers who can opt to file the same quarterly. Small taxpayers are taxpayers with a turnover up to Rs 5 crore in the preceding financial year.
- 2. Major Changes in GST Returns
- Continuous uploading and view of invoices
Suppliers can upload invoice details and the recipient can view them and take action on real time basis. Furthermore, the recipient shall be able to see the return filing status of the supplier . This facility shall be available to the recipient after the due date of filing such return by the supplier has passed. Likewise, the recipient will be able to keep a check on the tax liability discharged by the supplier against the purchases made by the recipient.
- Provisional Claim of ITC on Missing Invoices
Whenever a supplier has not uploaded an invoice or a debit note, and a recipient claims ITC, it will be termed as “missing invoices”. When ITC is availed on missing invoices by a recipient, and these missing invoices do not get uploaded by the supplier within the stipulated time frame, then the ITC availed with respect to such debit notes/invoices will be recovered from the recipient.
- Nil Return by SMS
Payers will simply need to send an SMS (short message service) to file monthly or quarterly returns. Instead of filing their returns online, assessees with ‘NIL’ returns can send an SMS to a specified number and confirm it using a one-time password (OTP).
- Amendment of Invoices
Once an invoice is locked by the recipient, no amendment of the same shall be allowed. Further
Amendment of an invoice may be carried out by the supplier where input tax credit has not been availed and the invoice has not been reported as locked by the recipient.
- Amendment Returns
In case of any mistake or wrong entries in the return, there would be a facility for filling the amendment return. For each of the tax period, up to two amendment returns can be filed and payment would be allowed to be made through the amendment return as it will help to save liability.
- Frequent Matching
The frequent matching involves matching the invoices uploaded by the supplier with the books of accounts to claim ITC. As the supplier uploads invoices on a real-time basis, the supplier has to match the invoices continuously. The recipient has to track these missing invoices and report them to the supplier. The recipient has to continuously check whether the supplier has uploaded invoices on the portal. The invoices uploaded by the supplier in his GST ANX-1 will auto-populate to GST ANX-2 of the recipient.
Comparison between Current Vs New GST Returns Systems
| Points | Current Return-filling System | New Return-Filling System |
| Small Taxpayers | Taxpayers considered small if turnover is up to Rs 1.5 crore in the preceding financial year, otherwise considered large taxpayers. | Taxpayers considered small if turnover is up to Rs 5 crore in the preceding financial year, otherwise considered large taxpayers. |
| Return Forms | Multiple return forms to be filed depending on the category of taxpayers, such as – GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7, etc. | A single simplified main return form GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2 to be filed by all categories of taxpayers |
| Uploading of Invoices | Revenue invoices can be uploaded only at the time of filing of returns of outward supplies | A mechanism for the continuous upload of revenue invoices on a real-time basis |
| ITC Claim | Input tax credit could be claimed on a self-declaration basis | Input tax credit can be claimed based on invoices uploaded by the supplier. |
| Cancellation of Registration | Taxpayers have to file GST returns until their registration has been cancelled, even if an application for cancellation of registration has been submitted. | Registration will now be suspended, in cases where a taxpayer has applied for cancellation of registration, and returns will not need to be filed for this period. |
3. Returns under New GST Systems.
| Quarterly (Sahaj) – (RET 2) | Quarterly (Sugam) – (RET 3) | Quarterly (Normal) – (RET 1) | Monthly (RET-1) |
| Small taxpayers making only B2C supplies + inward supplies (attracting RCM).No other types of outward/inward supplies allowed. |
Small taxpayers making B2C and B2B + inward supplies (attracting RCM)No other types of outward/inward supplies allowed |
Applicable to small taxpayers making exports, imports, supplies to B2C, B2B, SEZ and all types of supplies. | Mandatory if Turnover exceeds Rs 5 Crores. |
| Credit of ITC not allowed for missing invoices. | Credit of ITC not allowed for missing invoices. | Credit of ITC not allowed for missing invoices. | Credit of ITC allowed for missing invoices. |
Other Returns/Forms:
| No. | Types of Returns |
| PMT – 08 | Payment Form |
| GST RET – 1A | Amended Monthly Return |
| GST RET – 2A | Amended Quarterly Return – (Sahaj) |
| GST RET – 3A | Amended Quarterly Return – (Sugam) |
4. GST RET – 1
GST RET -1 is the Monthly/Quarterly (Normal) return to be filed by the taxpayer. This return will contain two annexure forms namely GST ANX-1 and GST ANX-2.
- GST ANX-1 (Annexure of Supplies) is for reporting details of
- Outward supplies,
- Inward supplies liable to reverse charge, and
- Import of goods and services.
- GST ANX-2 (Annexure of Inward Supplies) will report details of all inward supplies. Most of these details will be auto-drafted from the details uploaded by the suppliers in their GST ANX-1.
4(A). GST ANX – 1
Process of Filling GST Anx – 1
Step 1: Update GST Profile and Prepare Offline:
- Navigate to https://demooffilnetool.gst.gov.in and click Proceed to Prototype.
- Click Manage Profile> Add Profile
- Enter GSTIN and click the Add button. Once the Profile is created, it can be modified later.
- After adding the profile, select the GSTIN and then add Financial Year and Tax Period and then click on Proceed.
- A screen will pop-up with various functionalities available in the Offline Tool.
- Click on Prepare Offline in order to fill in the details for GST ANX-1.
Step 2: Import data using excel or CSV files:
- Import Data either through filled information/details in Excel or CSV file
- Upon successful import of file, the details will be auto populated in respective tables
Step 3: View Summary:
- Click View Summary to view the imported data.
- Select the document type such as invoice from the drop-down menu to view the summary of imported details.
- The entries populated in the table are for viewing only and no new entries can be made as the summary will not get updated as new data is not saved.
Step 4: Prepare table wise details:
- Select the Table for which the user wants to view, edit or enter the details.
Step 5: View draft return:
- Click the VIEW DRAFT RETURN to view draft Return FORM GST RET-1.
- Offline tool will auto fill the details in this draft return, based on the details imported to various tables and these details will be non- editable.
4(B). GST ANX – 2
Process of Filling GST Anx – 2
Step 1 Import Purchase Register:
- Select the relevant GSTIN from the drop-down menu from the offline tool. All the profiles added into the offline tool will be displayed here.
- To download the JSON File from the GST portal, a user needs to open a browser and go to www.gst.gov.in.
- Open the offline tool and click on ‘Open Downloaded JSON File’ under Annexure of Inward Supplies (GST ANX-2) and Import the JSON File in it.
- Fill the Purchase Register in Template & Import the same in the offline tool.
Step 2 Matching Result:
- Click on the ‘Matching Tool’ tile on the dashboard. An option to import an Excel/CSV file will be available.
- Select the relevant file with purchase register details and click on ‘Open’. A User has 3 Options to take action:
(i) Remove Purchase Register
(ii) View Purchase Register
(iii) Match
Step 3 Refine Matching :
- Once the matching has been done, and the results are displayed, action can be taken in the GST ANX-2.
- Select the table on which action needs to be taken, such as ‘Table 3A – Supplies received from registered persons (B2B)’.
- To view the summary of documents which have been accepted, rejected or kept pending, click on ‘Table Summary’.
Step 4 Invoice Wise Accept, Reject and Pending :
- The matching result can be viewed, along with the reasons, and actions can be taken, such as-
Accept – If the details in the GST ANX-2 are correct,
Reject – If the details in the GST ANX-2 are not correct,
When the recipient’s GSTIN is filled incorrectly by the supplier, the invoice will be visible for a taxpayer who is not the receiver of such supplies. As ITC will not be eligible to be taken on these invoices, the recipient will need to reject these invoices.
Pending – If the details cannot be confirmed at the present.
An invoice which has been uploaded by a supplier, however one of the following scenarios applies to that invoice:
I. The recipient has not received the supply
II. The recipient is of the opinion that there is a need for an amendment in the invoice
III. The recipient is unsure about availing ITC for the time being
An invoice in such cases will be marked pending by the recipient, and no ITC will be availed by a recipient on these pending voices.
- Click on ‘Confirm’ once action has been taken, in order to confirm the same. Click on ‘Reset’ in order to reset the actions that have been taken.
Step 5 Create JSON and Upload:
- Once the return is ready, click on ‘Generate JSON File to Upload’ on the main dashboard.
- The JSON file will be generated and downloaded, and will usually get saved in the ‘Downloads’ folder of the user’s system.
- Once downloaded, the JSON file needs to be uploaded to the GST portal.
Conclusion
These proposed changes initially faces teething troubles but later down the process is expected to be streamlined. It is a good step by the government to introduce new returns with additional features but alongwith transparent process, simplification is required. However, only time will tell if the new returns are actually making the life of taxpayers easy.
