15 Up-and-Coming Trends About GST Return Filing

1. What is the New GST Return System?

In the 31st GST Council Meet, it was decided that a New Return System under GST would be introduced for taxpayers. This return system will contain simplified return forms, for ease of filing across taxpayers registered under GST. Under this New Return System, there will be one main return GST RET-1 and 2 annexures GST ANX-1 and GST ANX-2. This return will need to be filed on a monthly basis, except for small taxpayers who can opt to file the same quarterly. Small taxpayers are taxpayers with a turnover of Rs 5 crore in the preceding financial year.

2. Forms to be filed under the New GST Return System

The main return GST RET-1 will contain details of all supplies made, input tax credit availed, and the payment of taxes, along with interest, if any. This return will contain two annexure forms namely GST ANX-1 and GST ANX-2. GST ANX-1 (Annexure of Outward Supplies) is for reporting details of all outward supplies, inward supplies liable to reverse charge, and import of goods and services, that will need to be reported invoice-wise (except for B2C supplies) on a real-time basis. 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. 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.

3. Differences between Current Vs New GST Return Systems

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

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

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

The I tax credit could be claimed on a self-declaration basis Input tax credit can be claimed based on invoices uploaded by the supplier

Missing invoices and amendments, if any, could only be made in the return of the following tax period Missing invoices and amendments, if any, can be made by filing an Amendment Return

Taxpayers have to file GST returns until their registration has been canceled, 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

4. Transition plan to the New GST Return System

The New GST Return System has been launched on a trial basis from July 2019, and the full-fledged system will be put into place from April 2020 (earlier: October 2019). This transition plan will be carried out in a phased manner. The trial phase will be for users to familiarise themselves with the annexure forms of the new return system.

The transition plan that was previously announced was as follows:

From July to September, during the trial phase, taxpayers will continue to file their GSTR-1 and GSTR-3B returns as per the current system in place. From October 2019, GST ANX-1 will need to be filed by large taxpayers, which will replace the GSTR-1 return. However, GSTR-3B will still need to be filed up to November 2019. In the case of small taxpayers. they will need to pay taxes using PMT-08, which will replace their GSTR-3B return.

From December 2019, large taxpayers will have to start filing GST RET-01, the main return under the new return system. For small taxpayers, their first GST RET-01 will need to be filed for the quarter of October-December 2019.

To know more about the transition into the New Return System, click here.

5. Offline Demo Tool

The GST Network (GSTN) has introduced an interactive web-based prototype of the Offline Tool

of the new return system. With this demo version of the prototype, a taxpayer will be able to navigate across different pages. This prototype will also allow a user to experience various functionalities such as drop-down menus, upload of invoices, upload of the purchase for verifying with inward supplies (system-created), etc.

A taxpayer will be able to analyze and experience the practical aspects of the simplified GST returns with this prototype. A user can then share feedback or suggestions with the GSTN.

Click to know more on preparing GST ANX-1 and taking action on GST ANX-2 on the offline tool prototypes.

6. Important Changes introduced in the New GST Return System

These are some of the changes introduced in the new return system-

Harmonized System of Nomenclature (HSN) code will be needed in order to submit details at a document level (on the basis of turnover) versus a separate HSN summary.

A user will also get HSN via his GST ANX-2, wherever a supplier was supposed to declare the HSN code.

B2B supplies, liable to reverse charge mechanism need not be shown by the supplier in the GST ANX-1, however, the aggregate figure will need to be shown in GST RET-1.

Inward supplies that are liable to RCM has to be declared in GST ANX-1 at the GSTIN level, by the recipient of supplies.

The concept of B2C-L has been removed. The turnover limit for quarterly filers (small taxpayers) will be considered as Rs 5 crore versus the present limit of Rs 1.5 crore.

A recipient can report missing invoices at an invoice level (that is when a supplier has not uploaded an invoice in T+2 period).