New GST Returns And Offline Tools – Explained

The GST Council, on its 37th meeting with members, has announced that new regulations will be implemented with regard to filing GST Returns. In this article, we will talk about the crucial pointers a taxpayer desires to note when it comes to the new GST returns. An overview of the key terms and tactics that are distinguishing under the new GST returns are explained here.

Overview of New GST Returns Regulations

In the 37th GST Council meeting, it was decided that a new return filing system under GST would be introduced for taxpayers. This return system will include simplified return forms, for ease of filing among taxpayers registered under GST. Under this new return system, there will be one most important return GST RET-1, and two annexures GST ANX-1 and GST ANX-2, respectively. This return will need to be filed on a monthly basis, besides small taxpayers who can decide to file the same quarterly. Small taxpayers are taxpayers with a turnover up to Rs. 5 crores in the preceding financial year.

Important Changes brought in the New GST Return System

The following are some of the changes that have been introduced in the new GST return system:

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

(ii) A person will also get HSN by means of his GST ANX-2, anywhere a supplier used to be supposed to declare the HSN code.

(iii) B2B supplies, in charge to reverse cost mechanism need not be proven by way of the provider in the GST ANX-1, however, the aggregate figure will need to be proven in GST RET-1.

(iv) Inward components which are responsible to RCM has to be declared in GST ANX-1 at the GSTIN level, by means of the recipient of supplies.

(v) The idea of B2C-L has been removed. The turnover limit for quarterly filers (small taxpayers) will be regarded as Rs. 5 crores versus the current restrict of Rs. 1.5 crores.

(vi) A recipient can document lacking invoices at an invoice stage (that is when a provider has now not uploaded an invoice in T+2 period).

Differences Between the Current and New GST Return Systems

The following are a few key differences between the present GST return system and the new GST return system.

Current GST Return System

  • Taxpayers viewed small if turnover is up to Rs. 1.5 crores in the previous financial year, in any other case considered massive taxpayers.
  • Multiple return types to be filed relying on the category of taxpayers, such as GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7, etc.
  • Revenue invoices can be uploaded only at the time of filing of returns of outward supplies.
  • Input tax credit could be claimed on a self-declaration basis.
  • Missing invoices and amendments, if any, should only be made in the return of the following tax duration.
  • Taxpayers have to file GST returns until their registration has been cancelled, even if an application for cancellation of registration has been submitted.

New GST Return System

  • Taxpayers regarded small if turnover is up to Rs 5 crore in the previous monetary year, in any other case considered massive taxpayers.
  • A single simplified predominant return shape GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2 to be filed by means of all classes of taxpayers.
  • A mechanism for the non-stop add of income invoices on a real-time basis.
  • Input tax credit can be claimed based totally on invoices uploaded by means of the supplier.
  • Missing invoices and amendments, if any, can be made by way of submitting an Amendment Return.
  • Registration will now be suspended, in instances the place a taxpayer has utilized for cancellation of registration, and returns will no longer want to be filed for this period.

Forms Needed to be Filed under the New GST Return System

The main return GST RET-1 will include details of all substances made, input tax credit availed, and the payment of taxes, along with interest, if any. This return will incorporate two annexure forms, particularly GST ANX-1 and GST ANX-2, respectively. GST ANX-1 (Annexure of Outward Supplies) is for reporting details of all outward supplies, inward supplies dependable to reverse charge, and import of goods and services, that will need to be suggested invoice-wise (except for B2C supplies) on a real-time basis. GST ANX-2 (Annexure of Inward Supplies) will file important points of all inward supplies. Most of these important points will be auto-drafted from the small print uploaded by means of 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.

Invoices Required to be Uploaded under the New GST Return System

There are several terms brought in the new return system, with regard to the uploading of some important invoices. These are given as follows:

(a) Missing invoices: If a supplier does not upload an invoice or a debit note, and the recipient claims ITC, then it will be termed as “missing invoices”. When ITC is availed on missing invoices by a recipient and these missing invoices do not get uploaded through the supplier within the stipulated time frame, then the ITC availed with respect to such debit notes/invoices will be recovered from the recipient.

(b) Locking of invoices: A recipient will have the alternative to lock in an invoice, if he/she concurs with the important points reported in that invoice. If there is a big volume of invoices, it may also not be sensible to lock in individual invoices, and in such cases, deemed locking of invoices will be executed on those invoices uploaded which are neither rejected nor have been saved as pending by the recipient.

(c) Unlocking of invoices: An invoice on which ITC has already been availed by means of a recipient will be regarded a locked invoice, and will not be open for amendments. In case an amendment needs to be made to a specific invoice, the dealer will have to problem a debit or a savings note. An incorrectly locked consignment can be unlocked by the recipient online, issue to a reversal of ITC declare made, and an online confirmation thereafter.

(d) Pending invoices: An invoice that has been uploaded by a supplier, then again one of the following eventualities applies to that invoice:

  • The recipient has not received the supply.
  • The recipient is of the opinion that there is a need for an amendment in the invoice.
  • The recipient is not sure about availing ITC for the time being

An invoice in such cases will be marked pending by the recipient, and no ITC will be availed via a recipient on these pending voices.

(e) Rejected invoices: When the recipient’s GSTIN is filled incorrectly by the supplier, the invoice will be seen for a taxpayer who is not the recipient of such supplies. As ITC will not be eligible to be taken on these invoices, the recipient will need to reject these invoices. To make the task of rejecting invoices hassle-free, the matching IT tool will have the alternative to create a recipient/seller master listing by which the right GSTIN can be identified.

Amendments under the New GST Return System

Under the new return system, a taxpayer will be allowed to file two amendment returns for every tax period. A taxpayer will also be allowed to make payment through an amendment return, which in turn will help the taxpayer in saving on his/her interest liability. In case ITC is available in the taxpayer’s electronic credit ledger (ECL), it can be utilised for paying the liability in the amendment return. The amendment of a missing invoice which is reported later through a supplier can be done with the aid of an amendment return of the concerned tax period to which the invoice belongs.

In case a recipient has taken into consideration and locked an invoice, amendment of that invoice will not be allowed. To amend any specific value of a locked invoice, either a dealer/supplier will have to increase a debit/credit note, or a supplier can seek the help of the recipient in unlocking the invoice so that he/she will be able to make modifications by filing an amendment return. Amendment of a GST invoice will be allowed solely if ITC has not yet been availed by the recipient.

Input Tax Credit (ITC) under the New GST Return System

Availing of ITC will depend on importing of invoices or debit notes through the supplier, within the stipulated time frame. An invoice uploaded by the supplier within the tenth of the following month will be visible constantly for the recipient. The taxes payable thereafter which can be claimed as ITC will be posted in the ITC table of the recipient’s return before the eleventh of the following month. These invoices will be reachable for availing ITC in the return which is filed through the recipient. Invoices that are uploaded by way of the supplier after the 10th of the following month will get posted in the involved area of the recipient’s return of the subsequent month, however, the viewing facility will be on a non-stop basis.

Offline Tool for New GST Return

The Goods and Services Tax Network (GSTN) has introduced an interactive web-based prototype of the Offline Tool for the new GST return system. With this demo model of the prototype, a taxpayer will be able to navigate through different pages. This prototype will also allow a taxpayer to explore various functionalities such as drop-down menus, uploading invoices, uploading purchase for verifying with inward supplies (generated by the system), etc.

A taxpayer will be able to analyze and experience the practical aspects of the simplified GST returns with this prototype. A taxpayer can then share feedback or pointers with the GSTN. The new return system will substitute GSTR-3B and GSTR-1. This uncomplicated prototype will provide taxpayers a sense of how the system will seem like. Stakeholders can also share their remarks on the prototype before it goes live.

The purpose of this prototype is to:

  • obtain suggestions and feedback from the users.
  • familiarise the users with the new return system.
  • assist in the implementation of simplified GST return filing.

How will the New GST Return System Function?

As per the new GST return system of filing returns, a regular taxpayer will need to file the Form GST RET-1 (Normal) or Form GST RET-2 (Sahaj) or Form GST RET-3 (Sugam), both on a monthly or a quarterly basis. A taxpayer will need to file an Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2) as a part of these returns.

GST ANX-1 will encompass all outward supplies, while GST ANX-2 will incorporate all inward supplies. All details concerning the inward supplies will be auto-populated from GST ANX-1, which had been filed by the supplier.

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