What Is The New Gst Return System?
On the 31st GST Council Meeting, the council members decided to introduce a new GST return filing system. Under this new filing system all the GST return forms are going to be replaced by new GST return forms which are very simplified return forms. This is a benefit for taxpayers to avoid the confusion like which form to be chosen and under whom. TallyBear is an emerging financial service provider in India, providing services on GST, TDS, and financial accounting for Individuals, SMEs, MSMEs etc.
In the new GST return filing system there will be a single form applicable to all named GST RET-1. Along with that the two returns are GST RET-2 and GST-RET-3. These are being used by the small taxpayers having turnover upto Rs 5 Crore. With this main return there are two annexures called GST ANX-1 and GST ANX-2.
Forms to be filed under the New GST Return System
GST RET-1
GST RET-1 is one of the main forms. It is applicable to all taxpayers. GST RET-1 will contain details of all supplies made, input tax credit availed, and the payment of taxes, along with interest, if any.
The return contains two annexes which are GST ANX-1 and GST ANX-2.
GST ANX-1
- It contains
- Outwards supplies
- Inward supplies liable to reverse charge
- 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
It contains
- Inward supplies
- Auto-drafted from the details uploaded by the suppliers in their GST ANX-1
- The recipient of supplies will accept these auto-drafted documents, which will be available to them on a real-time basis.
Itc Under New System
In the old system taxpayers are eligible to claim the input tax credit as per their self-assessment. But there is an accountable change in ITC claiming under the new system. It is dependent upon the invoices uploaded by the suppliers and which are reflected in their GST ANX-2.
An invoice uploaded within 10th of the following month will be available to the recipient for claiming Input Tax Credit. If the supplier uploads the invoice of a month after 10th of the succeeding month then that invoice is available to the recipient for claiming Input Tax credit in the succeeding month only. So the recipients should be careful and should check in their portal whether each purchase invoice is uploaded by their supplier within the 10th of the next month.
Offline Demo Tool Prototype
The introduction of an interactive web-based prototype of the Offline Tool of the new return system by GSTN (GST Network) a taxpayer will be able to navigate across different pages. With the help of this demo version of the prototype, it is possible for a user to experience different functions like drop-down menus, upload of invoices, upload of the purchase for checking inward supplies (system-created), etc.
The practical aspects of the simplified GST returns with this prototype can be experienced and analyzed by the taxpayers.
Changes In The New Gst Return System
Some of the changes introduced in the new return system are listed below-
- There will be a requirement for HSN or Harmonized System of Nomenclature code so as to submit information at a document level (on the basis of turnover) versus a separate HSN summary.
- Through a user’s GST ANX-2A he will get HSN, anywhere a supplier was meant to declare the HSN code.
- B2B supplies, liable to reverse charge mechanism, do not need to be shown by the supplier in the GST ANX-1, but the aggregate figure should be shown in GST RET-1.
- Inward supplies which are liable to RCM have to be shown in GST ANX-1 at the GSTIN level, by the recipient of supplies.
- Idea of B2C-L has been barred. In the case of small taxpayers, the turnover limit will be considered as Rs 5 crore versus the present limit of Rs 1.5 crore.
Upload Of Invoices
Many terms have been introduced in the new return system
1. Missing invoices
This term is given when a supplier has not uploaded an invoice or a debit note, and a recipient claims ITC, then it is termed “missing invoices”. When ITC is claimed on missing invoices by a recipient, and these invoices which are missing do not get uploaded by the supplier within the given time period, then the ITC availed with respect to such debit notes/invoices will be recovered from the recipient.
2. Locking of invoices
Here the recipient has the choice to lock in an invoice, if he consents with the data reported in that invoice. It may not be practical to lock in individual invoices, if there is a massive amount of invoices. So when such matters arrive, deemed locking of invoices will be applied on such invoices uploaded which are neither rejected nor have been kept as pending by the recipient.
By the recipient online, an incorrectly locked invoice can be unlocked, dependent on a reversal of ITC claim made, and thereafter an online confirmation.
3. Pending invoices
An invoice in cases like given below will be marked as pending by the recipient:
- The supply has not been received by the recipient
- When the recipient is of the option that there is a requirement for an amendment in the invoice
- When the recipient is not sure about availing ITC for the time being No ITC will be availed by a recipient on these pending invoices.
4. Rejected invoices
If the supplier fills the recipient’s GSTIN incorrectly, the invoice will be noticeable for a taxpayer who is not the receiver of such supplies. The recipient will need to reject these invoices as ITC will not be appropriate to be taken on these invoices.
Amendment Returns
For each tax period, a taxpayer can file two amendment returns in this new system. A taxpayer will also get the benefit to make payment through an amendment return, which successively will serve the taxpayer in saving on his interest liability. If ITC is accessible in the taxpayer’s ECL (electronic credit ledger), it can be used for paying the liability in the amendment return. Amendment of a missing invoice which is noted in due course by a supplier can be settled through an amendment return of the particular tax period to which the invoice belongs.
If a recipient has recognized and locked an invoice, the amendment of that invoice will not be permitted. Either a supplier will have to raise a debit/credit note, or a supplier can request the aid of the recipient in unlocking the invoice to amend any particular value of a locked invoice. By doing this he will be able to make an amendment by filing an amendment return. Amendment of a GST invoice will be permitted only if ITC has not yet been availed by the recipient.
