New GST Returns – Overview, Forms, Invoices, ITC, Amendments, Offline Tool
1. What is the New GST Return System?
In the 31st GST Council Meet, it was decided that a New Return System under GST would be introduced for taxpayers. This return system will contain simplified return forms, for ease of filing across taxpayers registered under GST. Under this New Return System, there will be one main return GST RET-1 and 2 annexures GST ANX-1i and GST ANX-2. This return will need to be filed on a monthly basis, except for small taxpayers who can opt to file the same quarterly. Small taxpayers are taxpayers with a turnover up to Rs 5 crore in the preceding financial year.In the 31st GST Council Meet, it was decided that a New Return System under GST would be introduced for taxpayers. This return system will contain simplified return forms, for ease of filing across taxpayers registered under GST. Under this New Return System, there will be one main return GST RET-1 and 2 annexures GST ANX-1
This return will need to be filed on a monthly basis, except for small taxpayers who can opt to file the same quarterly. Small taxpayers are taxpayers with a turnover up to Rs 5 crore in the preceding financial year.
2. Forms to be filed under the New GST Return System
The main return GST RET-1 will contain details of all supplies made, input tax credit availed, and the payment of taxes, along with interest, if any. This return will contain two annexure forms namely GST ANX-1 and GST ANX-2. GST ANX-1 (Annexure of Outward Supplies) is for reporting details of all outward supplies, inward supplies liable to reverse charge, and 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 (Annexure of Inward Supplies) will report details of all inward supplies. Most of these details will be auto-drafted from the details uploaded by 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.
2. Forms to be filed under the New GST Return System
|Old Return-filing System||New Simplified Return System|
Taxpayers considered small if turnover is up to Rs 1.5 crore in the preceding financial year, otherwise considered large taxpayers
Taxpayers considered small if turnover is up to Rs 5 crore in the preceding financial year, otherwise considered large taxpayers
Revenue invoices can be uploaded only at the time of filing of returns of outward supplies
A mechanism for the continuous upload of revenue invoices on a real-time basis
Input tax credit could be claimed on a self-declaration basis
Input tax credit can be claimed based on invoices uploaded by the supplier
Missing invoices and amendments, if any, could only be made in the return of the following tax period
Missing invoices and amendments, if any, can be made by filing an Amendment Return
Taxpayers have to file GST returns until their registration has been cancelled, even if an application for cancellation of registration has been submitted
Registration will now be suspended, in cases where a taxpayer has applied for cancellation of registration, and returns will not need to be filed for this period
4. Transition plan to the New GST Return System
The New GST Return System has been launched on a trial basis from July 2019, and the full-fledged system will be put into place from April 2020 (earlier: October 2019). This ransition plan will be carried out in a phased manner. The trial phase will be for users to familiarise themselves with the annexure forms of the new return system.
The transition plan that was previously announced was as follows:
From July to September, during the trial phase, taxpayers will continue to file their GSTR-1 and GSTR-3B returns as per the current system in place. From October 2019, GST ANX-1 will need to be filed by large taxpayers, which will replace the GSTR-1 return. However, GSTR-3B will still need to be filed up to November 2019. In the case of small taxpayers. they will need to pay taxes using PMT-08, which will replace their GSTR-3B return.
From December 2019, large taxpayers will have to start filing GST RET-01, the main return under the new return system. For small taxpayers, their first GST RET-01 will need to be filed for the quarter of October-December 2019.
5. Offline Demo Tool Prototype
The GST Network (GSTN) has introduced an interactive web-based prototype of the Offline Tool
of the new return system. With this demo version of the prototype, a taxpayer will be able to navigate across different pages. This prototype will also allow a user to experience various functionalities such as drop-down menus, upload of invoices, upload of the purchase for verifying with inward supplies (system-created), etc.
A taxpayer will be able to analyse and experience the practical aspects of the simplified GST returns with this prototype. A user can then share feedback or suggestions with the GSTN.
6. Important Changes introduced in the New GST Return System
These are some of the changes introduced in the new return system-
- Harmonized System of Nomenclature (HSN) code will be needed in order to submit details at a document level (on the basis of turnover) versus a separate HSN summary.
- A user will also get HSN via his GST ANX-2, wherever a supplier was supposed to declare the HSN code.
- B2B supplies, liable to reverse charge mechanism need not be shown by the supplier in the GST ANX-1, however, the aggregate figure will need to be shown in GST RET-1.
- Inward supplies which are liable to RCM has to be declared in GST ANX-1 at the GSTIN level, by the recipient of supplies.
- The concept of B2C-L has been removed. The turnover limit for quarterly filers (small taxpayers) will be considered as Rs 5 crore versus the present limit of Rs 1.5 crore.
- A recipient can report missing invoices at an invoice level (that is when a supplier has not uploaded an invoice in T+2 period).
7. Upload of Invoices under the New GST Return System
Whenever a supplier has not uploaded an invoice or a debit note, and a recipient claims ITC, 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 by the supplier within the stipulated time frame, then the ITC availed with respect to such debit notes/invoices will be recovered from the recipient.
Locking of invoices:
A recipient will have the option to lock in an invoice, if he agrees with the details reported in that invoice. If there is a huge volume of invoices, it may not be practical to lock in individual invoices, and in such cases, deemed locking of invoices will be done on those invoices uploaded which are neither rejected nor have been kept as pending by recipient.
Unlocking of the invoices:
An invoice on which ITC has already been availed by a recipient will be considered a locked invoice, and will not be open for amendments. In case an amendment needs to be made to a particular invoice, the supplier will have to issue a debit or a credit note. An incorrectly locked invoice can be unlocked by the recipient online, subject to a reversal of ITC claim made, and an online confirmation thereafter.
An invoice which has been uploaded by a supplier, however one of the following scenarios 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 unsure 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 by a recipient on these pending voices.
When the recipient’s GSTIN is filled incorrectly by the supplier, the invoice will be visible for a taxpayer who is not the receiver 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 option to create a recipient/seller master list via which the correct GSTIN can be identified.
8. Input Tax Credit (ITC) under the New GST Return System
Availing of ITC will depend on uploading of invoices or debit notes by the supplier, within the stipulated time frame. An invoice uploaded by the supplier within the 10th of the following month will be visible continuously 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 11th of the following month. These invoices will be available for availing ITC in the return which is filed by the recipient. Invoices that are uploaded by the supplier after the 10th of the following month will get posted in the concerned field of the recipient’s return of the subsequent month, however, the viewing facility will be on a continuous basis.
9. Amendment Returns under the New GST Return System
Under the new return system, a taxpayer will be allowed to file two amendment returns for each 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 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 by a supplier can be done via an amendment return of the concerned tax period to which the invoice belongs.
In case a recipient has acknowledged and locked an invoice, amendment of that invoice will not be allowed. To amend any specific value of a locked invoice, either a supplier will have to raise a debit/credit note, or a supplier can seek the help of the recipient in unlocking the invoice so that he will be able to make an amendment by filing an amendment return. Amendment of a GST invoice will be allowed only if