New GST return forms – Normal, Sahaj and Sugam.
New GST Return Filing System
Old system of filing GST
GST returns in the country changed on 21st July 2018 in order to simplify the different types of establishments and also to introduce new GST return forms.
New GST return forms:
- Normal – Businesses and individuals who make B2B, B2C, and other outward supplies.
- Sahaj – for taxpayers making B2B, B2C and other outward supplies.
- Sugam – This is applicable to taxpayers making B2B and B2C outbound supplies.
Difference between old system and new system
- Previously, GSTR-1 could only be viewed in GSTR-2A after it was filed; now, with the new filing system, it is possible to view it and file it simultaneously.
- The HSN code summary was previously reported separately, but is now included with the invoice when using the new system.
- Income Tax Credit was reported in GSTR-3B in the old system, but in the new system, it is reported in GST ANX-1.
- Formerly, tax liability had to be reported in GSTR-3B, but now it is reported in PMT-08, monthly.
- In the old systems, documents such as invoice, debit note, credit note, vouchers and challans had to be added while they are no longer required.
Important changes in the new GST forms
Small taxpayers will benefit from the new GST forms as they no longer need to file multiple forms. Instead, a single form (GST RET-01) must be filled monthly with supporting inward and outward annexures and can be viewed in real time if necessary. Missing invoices can be uploaded within two months.
Transition plan
To ensure a smooth transition from the previous version to the new one ”at the GST 31st Council Meeting in December 2018’’ it was decided that a new return filing system would be introduced to help ease the process of filing returns for taxpayers.
The transition plan is as follows:
- As of 2019 May, a beta version of the online tool was shared as an offline tool with the same look and feel.
- There are 5 sections: one main return and four annexures (Form GST ANX-1, Form GST ANX-2, Form GST ANX-1A, and PMT-08).
- As part of testing, taxpayers will have the option of uploading GST ANX-1 using the offline tool as of July 2019. Using the GST ANX-2 offline tool, taxpayers can import their purchase list and match it to inward supply invoices to find discrepancies, and using this tool on test will be able to download inward supply invoices as well.
- In the months of 2019 July and September, taxpayers must continue to use form GSTR-1 AND GSTR-3B, but the ANX-1 and ANX-2 annexures will be available for trial.
- Form GSTR-1 will be replaced with Form GST ANX-1 from October 2019. The requirement will apply to companies with aggregate annual revenues of over Rs. 5 crore. For those with an aggregate annual turnover in the previous financial year of up to Rs. 5 crore it will be done in January 2020. Both can upload invoices and other documents in Form GST ANX-1 from October 2019. This is not the case for Form GST ANX-2, however, as this form can only be viewed during this period.
- Large taxpayers are to continue filing Form GSTR-3B for October and November 2019. For the month of December 2019, by the 20th of January, 2020 they must file their first Form GSTR-1. Small taxpayers, on the other hand, must stop filing Form GSTR-3B and start filing Form GST PMT-08 in October 2019. They can start filing their first Form GSTR-1 for the quarter of October to December 2019, from the 20th of January, 2020.
- All taxpayers must begin filing Form GST RET-01 by the start of January 2020. Form GSTR-3B must go eliminated.
ITC Claim under the new GST return filing system
- Forms RET-1 or RET-2 or RET-3, supported by two annexures -ANX-1 and ANX-2 are used to file GST returns. ANX-2 is most important as the taxpayer can use these annexures to accept, reject or mark invoices as pending, for ITC claims. Invoices can be applied continuously by the supplier and the recipient may view it at any time and can be viewed in the portal under the “viewing facility” section and post the 10th date of the month and required action can be taken whether credit is to be accepted, rejected or postponed to a later period.
- The credit accepted is to be filed by the recipient after it is found in the respective section and will be fixed and no changes can be made later. If there is a large number of invoices, all the invoices will be accepted except those invoices which are marked as pending/rejected.
- If an invoice is uploaded but tax has not been paid, there shall not be any automatic reversal of input tax credit at the recipient’s end.
- A situation wherein failure of payment of tax on supply, it shall be recovered from the one supplying. In cases of a taxpayer gone missing, liquidation of business by the supplier or supplier not having required assets or if input claimed by the recipient was in an illegal way, etc it can be claimed separately.
Invoice upload and processing
- The buyer can upload invoices at any time of the month to qualify for input tax credit.
- Upon uploading the invoices, the buyer can view and lock them at any time.
- The buyer does not have to upload their purchase invoice.
- A certain amount of tax default will prevent sellers from uploading invoices for input tax credit.
Invoicing for B2B Dealers
- The system will calculate your tax liability automatically after all supply invoices have been filled.
- These require a 4-digit or higher HSN number.
Conditions to choose / Opt GST Return types
CONDITIONS | NORMAL (RET1) MONTHLY | NORMAL (RET1) QUARTERLY | SAHAJ (RET2) | SUGAM (RET3) |
Filing Period | Monthly | Quarterly | Quarterly | Quarterly |
Turnover above 5Cr | Yes | No | No | No |
Turnover below 5Cr with only B2C transactions | Yes | Yes | Yes | No |
Turnover below 5Cr with only B2C and B2B transactions | Yes | Yes | No | Yes |
Turnover below 5Cr with B2C, B2B, export transactions | Yes | Yes | No | No |
Allow inward transactions with RCM | Yes | Yes | Yes | Yes |
E-commerce transactions | Yes | Yes | No | No |
ITC against missing invoices | Yes | Yes | No | No |
Nil, Non-GST, Exempted transactions | Yes | Yes | Yes | Yes |
HSN Code (6 Digits) | Mandatory | Optional | Optional | Optional |
