Introduction to new GST return system
The government has announced a simple GST filing regime for small taxpayers. This new returns will contain simplified GST returns forms for ease of filing. These returns would require lesser information to be declared as when compared to a regular taxpayer.
The GST Council has issued the following 3 new simplified GST Forms:
- Normal (GST RET-1)
- Sahaj (GST RET-2)
- Sugam (GST RET-3)
The Goods and Services Tax Network had already released a prototype of the offline tool in May, 2019 and will be implemented on a trial basis from July 2019 to September 2019.
Forms to be filed under the new GST Return System
Under the new filing system, the main return is proposed is to be filed is GST RET 1 return form. GST RET 1 will take place of the GSTR 3B and ANX 1 will take place of GSTR 1 return, both which are being filed under the current system.
GST RET-1 (Normal Return): GST RET-1 is the main return which will contain the following details:
- Details of all supplies made,
- Input tax credit availed, and
- The payment of taxes, along with interest, if any.
Note: The Form GST RET-1 will be filed on a monthly basis. However, the small taxpayers whose turnover of previous F.Y. is up to INR 5 crore can file this return on a quarterly basis. But in this case as well they will need to pay the taxes on a monthly basis in FORM GST PMT-08.
This return will contain two annexure forms namely GST ANX-1 and GST ANX-2.
GST ANX-1 (Annexure of Supplies): It will contain the following details:
- All outward supplies,
- Inward supplies liable to reverse charge, and
- Import of goods and services
Note: These details need to be reported invoice-wise (except for B2C supplies) on a real-time basis.
GST ANX-2 (Annexure of Inward Supplies): It will contain the following details all inward supplies.
However, most of these details will be auto-drafted from the details uploaded by the suppliers in their GST ANX-1. The recipient of supplies will be able to take action on these auto-drafted documents, which will be available to them on a real-time basis.
Sahaj (GST RET-2): The GST SAHAJ return (RET 2) can be filed by small taxpayers who have opted for quarterly GST return filing and only have B2C transactions.
Quarterly filing along with monthly payment by 20th of the subsequent month.
Sugam (GST RET-3): is a quarterly GST return form which will be filed by registered taxpayers whose annual turnover is up to INR 5 crore.
This form will be made available to only those small taxpayers engaged in both B2B (Business to Business – supplies to GST registered persons), and B2C (Business to Consumer – supplies to consumers and unregistered persons under GST) supplies in India.
The RET-3 form is required to be filed on a quarterly basis but the taxpayer has to pay tax monthly.
Comparison of GST forms i.e. Sahaj, Sugam, and Normal
| Normal (Quarterly) | Normal (Monthly) | GST Sahaj Return | GST Sugam Return |
| Applicable for individual making inward and outward supplies | Applicable for individual making inward and outward supplies | Applicable for individuals doing B2C supplies and Inward supplies (including RCM) | Applicable for individuals doing B2C, B2B supplies & Inward supplies (including RCM) |
| Input tax credit is not allowed for missing invoice | Input tax credit is allowed for missing invoice | Input tax credit is not allowed for missing invoice | Input tax credit is not allowed for missing invoice |
| – | – | Not allowed for e-commerce dealing who are deducting TCS u/s-52 | Not allowed for e-commerce dealing who are deducting TCS u/s-52 |
| – | – | Allowed for making NIL rated/exempted/non-GST supplies | Allowed for making NIL rated/exempted/non-GST supplies |
Differences between Current Vs New GST Return Systems
| Basis | Old GST Return-filing System | New Simplified GST Return System |
| Small Taxpayers | Taxpayers having turnover up to Rs. 1.5 crore in the preceding financial year are small taxpayers, otherwise considered large taxpayers | Taxpayers having turnover up to Rs. 5 crore in the preceding financial year are small taxpayers, otherwise considered large taxpayers. |
| Returns to be filed | Return forms to be filed depending on the category of taxpayers, such as – GSTR-3B, GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7 etc. | A single simplified main return form GST RET-1 along with 2 annexure GST ANX-1 and GST ANX-2. |
| Revenue Invoices | Revenue invoices can be uploaded only at the time of filing of returns of outward supplies. | Continuous upload of revenue invoices on a real-time basis will be available. |
| Input Tax Credit (ITC) | Input tax credit could be claimed on a self-declaration basis. | Input tax credit can be claimed based on invoices uploaded by the supplier. |
| Provisional Credit | The current system does not allow any provisional credit. | In cases when a supplier fails to upload invoices or file his return, the recipient will be able to claim ITC on a provisional basis, which will not exceed the 20% of the value mentioned. |
| Rectification in Return (if any) | Rectification, missing invoices and amendments could only be made in the return of the following tax period. | Missing invoices and amendments can be made by filing an Amendment Return. |
Points to be noted:
- The offline trial period for the new filing system will begin from July and will last till September 2019.
- In the trial period, the filing of GSTR-1 and GSTR-3B can be continued.
- After the trial period, from October to December, taxpayers whose total turnover exceeds INR 5 crores will have to file return under new filing system.
- From January 2020, all taxpayers will have to file the new GST returns (GST Sahaj Return and GST Sugam Return).
Contact EAdvisors regarding any query.
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