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GSTN has released the Prototype of Simplified GST Return Filing System. Highlights of the proposed system are as follows:

√ Three Forms: Suppliers making B2B Supplies only: GST RET-1 (Normal) Suppliers making B2C Supplies only: GST RET-2 (Sahaj) Suppliers making B2C & B2B Supplies both: GST RET-3 (Sugam)

√ Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2) will be part of these returns.

√ All the outward supplies will be detailed in GST ANX-1

√ GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers’ GST ANX-1. The new return filing format would replace the current requirement of filing final sales return GSTR-1; and summary sales return GSTR-3B.

Let us discuss & understand the revised GST Return Mechanism in details.

Revised GST Return Mechanism

1. Uploaded GST Invoice

Any invoice uploaded by the supplier on the portal is “Uploaded Invoice”. For the recipient the uploaded invoice is a valid document to avail input tax credit. Under the new return mechanism supplier can continuously upload invoices and respective recipient can check the uploaded invoice through new ‘Viewing Facility’ provided on the portal; this would help both suppliers & recipients to have better control on invoice uploading, tracking & validation of invoices.

2. Accepted or Locked GST Invoice

Once the supplier uploads the invoices, the recipient can mark the invoices as “accepted” which means that the recipients confirm the contents & accuracy of the invoices. Once after viewing are called “Accepted” or “Locked” Invoices.

Though if the recipient does not explicitly “accept/Lock” the invoice but at the same time does not mark as “Rejected” or “Pending”, the same invoice shall be treated as “Accepted” by default. Once the recipient explicitly “Accept /Lock” the invoice or file the return for the relevant tax period, the supplier cannot “Amend” the same unless the recipient reverse the ITC and unlock the invoice.

3. Rejected GST invoice

If for any reason the suppler uploads any invoice & the recipient for any reason refuses to accept the invoice e.g. wrong GSTIN mentioned by the supplier is incorrect or invoice doesn’t pertain to that recipient and the recipient “View” the invoice in their account, he can “Reject” the invoice. Every recipient is advised to reject incorrect/irrelevant invoices on real time basis to help the supplier correct uploading of invoices which would help the recipient too.

4. Missing GST Invoices

There may be invoices which have been received by the recipient & ITC is claimed but the supplier doesn’t upload the same either by omission or otherwise, such invoices are “Missing Invoices”. The supplier can report such missing invoices in the return for any subsequent tax period but with applicable interest or penalty.

5. Pending GST Invoice

Any uploaded invoices the suppler if marked “Pending” by the recipient is a pending invoice. A recipient can do this if of the content is to be rectified by the supplier, if material is still under transit, or for some reason is undecided about the ITC for the same.                                               

6. Amended GST Invoice

If the supplier has uploaded any invoice but for any reason wants to rectify/amend the same, he can do it. The supplier can amend any invoice only if neither the recipient has claimed ITC on it nor he has accepted/locked it.

Any invoice, once locked cannot be amended. Any changes to such locked invoices would be made through a Debit Note or Credit Note only.

7. Amendment of GST Returns

If any taxpayer has made some mistake in the regular return, he can file an “Amendment Return”, two (2) amendment returns are allowed for each tax period.

Any Amendment Return is allowed till the due date for furnishing return of September of the subsequent financial year or date of filing of the annual return for the relevant financial year, whichever is earlier.

8. Monthly GST Returns

All Taxpayers having annual turnover of more than Rs. 5 Crores (excluding Composition Dealers, ISD, NRR, TDS and TCS) in the last Financial Year have to file Monthly Return. The Due Date to file monthly return would be 20th day of the subsequent month.

9. Quarterly GST Returns

Following taxpayers would have to file monthly GST Return:

  • Taxpayers having annual turnover upto Rs. 5 Cr. In the last Financial Year have been given the option to file Quarterly Return, though if they wish they can continue to file returns on monthly basis.
  • Composition Dealers
  • Non-Resident Registered Person (NRR)
  • Input Service Distributors (ISD)
  • Person liable for TDS and TCS under GST.

10. Monthly GST Returns Process

  • The supplier can continuously upload invoices and respective recipient can check the uploaded invoice through new viewing facility.
  • Most of the fields in the return are auto populated; invoices uploaded by 10th day of the subsequent month would be posted to main return of the supplier. By 11th of the next month, invoices uploaded by the Supplier will be auto-populated in Inward Supplies Annexure and ITC will be available on the same.
  • The recipient would be able to claim ITC only on the invoices uploaded by the supplier, so matching concept has now been made applicable. Though in the transitional period of first 6 month, ITC can be claimed on self-declaration basis. Also, the recipient would provide the detail of pending invoices in the return but would not be able to claim ITC on pending invoices.
  • If the supplier wants to rectify/amend any uploaded invoice or wants to the upload the missing invoices, he can do it along with interest and penalty wherever applicable through the amendment return of the tax period which such wrong or missing Invoices pertain to.

11. Reporting of Import-Export

  • Now the taxpayers have to furnish details of shipping bills in the main return via a separate table and such details can be furnished either at the time of furnishing the return or even after that. If the taxpayer furnishes the details of shipping bills furnishing the return, it would not be deemed to be Amendment Return.
  • Importers can claim ITC on imports and supplies from SEZ on self-declaration basis without waiting for submission of such credit from ICEGATE to Inward Supplies Annexure.
  • In case exporter needs to furnish any revised details of shipping bills, they can do it through a separate amendment facility.

12. Other Salient Features 

  • Now after the due of the return, the recipient can check whether the supplier has filed his return or not and also if the supplier has deposited the tax or not. In the interest of the recipients, a supplier in default can be barred from uploading of invoices or to upload the invoices up to a specified threshold limit only.
  • Filing of Nil Returns (no purchase and no sale) by sending SMS is now available. Taxpayers on monthly return mode would file.
  • Profile based return format based on the type of supplies is now provided. Taxpayers can create their profile based on nature of supplies made and received, accordingly the fields of information which a taxpayer would be shown and would be required to fill in the return would depend on their profile.
  • Now the document summary is not required to be furnished.
  • To ensure better compliance by taxpayers, a higher amount of late fee may be made applicable if on filing of an Amendment Return, the change in liability is in excess of 10%.

Disclaimer: The information contained in this article is provided for informational purposes only & is not intended to constitute a complete analysis of all tax considerations, hence it should not be construed as legal advice at all on the subject matter.  No recipients of content from the Site, clients or otherwise, should act or refrain from acting on the basis of any content included in the article without seeking the appropriate legal or other professional advice on the particular facts and circumstances.

Author Bio

Alok is the Co-Founder of "Finance Optima" a name synonymous with bespoke high quality, path-breaking, innovations & trendsetting services in finance , taxation, Investment & Management domain. He is a qualified Chartered Accountant and seasoned finance professional with the experience of c View Full Profile

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May 2024