Under the Goods and Services Tax (GST), the government has announced a transition plan for taxpayers to adapt to new simpler return forms. To ease this transition process and encourage familiarization, the new form will be available on a trial basis from July to September. In its 31st meeting, the GST Council had decided that a new GST return system will be introduced for taxpayers.

An official statement from the Finance Ministry said that in May 2019, the Goods and Services Tax Network (GSTN) had shared a prototype of the offline tool. It also noted that the look and feel of the offline tool would be similar to that of the online portal.

New GST return

There are three major components of the new return – one main return called Form GST RET-1 and two annexures which are Form GST ANX-1 and Form GST ANX-2. In order to be familiar with the prototype, from July 2019, users have been able to upload invoices using the Form GST ANX-1 offline tool on a trial basis. In addition, under the trial program, they would also be able to view and download the inward supply of invoices using the Form GST ANX-2 offline tool.

A very large part of tax base constitutes of small taxpayers who only deal with purchases and sales in the domestic market. They often have B2B purchases only and supplies to either as B2B or both B2B and B2C. Hence, two simpler quarterly returns are proposed for them named Sahaj for B2B outward supplies and Sugam for both B2B and B2C outward supplies.

The summary of inward supply invoices would also be viewable on the common portal online. From August 2019, the taxpayers would be able to import their purchase register into the offline tool and find mismatches by comparing it with the downloaded inward supply invoices.

The statement stated that for three months – from July to September 2019 – the new return system (ANX-1 and ANX-2 only) would be available on a trial basis for taxpayers to make themselves familiar. This trial would not have any impact at the back end of tax liability or input tax credit (ITC) of the taxpayer, the statement further added.

During this period, a taxpayer will continue to fulfill his/her compliances by filing Form GSTR-1 and Form GSTR-3B. This means taxpayers would continue to file their outward supply details in Form GSTR-1 on a monthly or quarterly basis and return in GSTR-3B on monthly basis. Non-filing of any of these returns will attract penal provisions under the GST Act.

From October 2019 onwards, Form GST ANX-1 will be compulsory which will replace Form GSTR-1. The large taxpayers whose aggregate annual turnover is over ₹ 5 Crore in the previous financial year will upload their monthly Form GST ANX-1 from October 2019 onwards. However, small taxpayers with turnover up to ₹ 5 Crore will file the first quarterly Form GST ANX-1 in January 2020 for the quarter October to December 2019.

The statement also noted that from October 2019 onwards, both large and small taxpayers will be able to upload invoices in Form GST ANX-1. It added that Form GST ANX-2 can be viewed simultaneously during this period but no action will be allowed.

For October and November 2019, large taxpayers would continue to file their monthly return Form GSTR-3B. They would file their first return Form GST RET-01 for the month of December 2019, by 20th January 2020.

On the other hand, the small taxpayers would stop filing Form GSTR-3B and would file Form GST PMT-08 from October 2019 onwards. They would file their first Form GST RET-01 for the quarter of October 2019 to December 2019 from 20th January 2020.

From January 2020, Form GSTR-3B will be completely phased out and all taxpayers will be filing Form GST RET-01. Furthermore, the government will separately issue instructions for filing and processing of refund applications.

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October 2020