Since the time of inception, Goods and Services Tax (GST) has been evolving to suit the needs of the society and ease the process of paying tax and filing returns for the taxpayers. As a part of this evolution, it was decided to introduce a New Return System under GST which consists of simplified return forms, for the taxpayers in the 31st GST Council Meet. GST New Return online version and Offline Tool has been introduced in Beta/ Trial phase to familiarize the stakeholders and taxpayers with its operations and functions and to receive feedback from them to improvise the proposed system.
At this point, it is vital and inevitable for us to build a better understanding on this New Return System under GST to avoid non-compliance and huge penalties that comes along with it.
What is the New Return System under GST?
The New Return System under GST has been introduced for taxpayers to provide them with simplified user-friendly return forms which shall replace the existing return system. This return system also provides for details such as invoice upload, upload of purchase register for matching with a system-created inward supplies.
The New Return System consists of three kinds of forms: Form GST RET-1 (Normal Return), Form GST RET-2 (Sahaj Return) and Form GST RET-3 (Sugam Return). All these forms have two annexures GST ANX-1 and GST ANX-2. This return system has already been made applicable in Beta/ Trial phase from the second quarter of Financial Year 2019-20 and shall be implemented from April 2020. However, E-commerce operators are not eligible to file Sahaj Return as well as Sugam Return.
Form GST RET-1 (Normal Return)
Form GST RET-1 or Normal Return shall be filed, mandatorily by the taxpayers whose aggregate turnover has been above Rs. 5 crore in the previous financial year on monthly basis and optionally by the taxpayers whose aggregate turnover has been upto Rs. 5 Crore in the previous financial year, based on Form GST ANX-1 and Form GST ANX-2. This return has to be filed by the 20th of the month succeeding to the taxable month or quarter. However, tax has to be paid on monthly basis through Form GST PMT-08.
Form GST RET-2 (Sahaj Return)
Form GST RET-2 or Sahaj Return can be filed optionally based on Form GST ANX-1 and Form GST ANX-2 on quarterly basis, by the taxpayers whose aggregate turnover was up to Rs. 5 Crore in the preceding financial year and have supplies only to consumers and unregistered persons (B2C supplies). However, tax has to be paid on monthly basis through Form GST PMT-08.
Taxpayers opting to file Sahaj Return have an option to declare outward supply under B2C category and inward supplies attracting reverse charge.
Form GST RET-3 (Sugam Return)
Form GST RET-3 or Sugam Return can also be filed optionally based on Form GST ANX-1 and Form GST ANX-2 on quarterly basis, by the taxpayers whose aggregate turnover was up to Rs. 5 Crore in the preceding financial year and have made supplies to consumers and un-registered persons (B2C) and to registered persons (B2B). However, the tax has to be paid on a monthly basis through Form GST PMT-08.
GST ANX-1 is the Annexure of Supplies has features for uploading the details of outward supplies (sale), imports (goods and services), and inward supplies (purchase) attracting reverse charge, etc. any time during the month till filing of return.
GST ANX-2 is the Annexure of Inward Supplies in which user can take action on the details auto-populated from the suppliers GST ANX-1, which is made available to them on real-time basis. It also contains details auto-populated from Form GSTR-5 (Non-resident foreign taxpayer) and Form GSTR-6 (Return by Input Service Distributor). Further, a facility has been provided to match GST ANX-2 with the purchase register.
The taxpayers shall upload details of outward supplies in Form GST ANX-1, from which details will be auto-populated in Form GST ANX-2. Action shall be taken by the taxpayer in the details auto-populated in Form GST ANX-2 by accepting or rejecting the entries. Thereafter, Form GST RET-1 or Form GST RET-2 or Form GST RET-3 shall be filed by the taxpayers in which some details will be auto-populated but some have to be filled manually.
The New Return System does remove various hardships faced by the taxpayers while filing returns in the existing system and to focus mainly on invoice level matching of transactions. The possibility of errors and manual filling of details have been minimized as most of the details in the Return Form gets auto-populated from the details filed in previous steps (Annexures) and the facility to upload and view invoices on a real-time basis. Also, the suppliers have to be cautious while uploading invoices in Form GST ANX-1, as uploading erroneous invoice or not uploading invoice at all will lead to additional work for both supplier and recipient.
However, this New Return System is only in Beta phase and various changes and improvements can be expected on its actual deployment based on the feedback and comments received from the stakeholders.
Link for details of new return system: https://dashret.gst.gov.in/dashret/trial
Page for login to file returns: https://services.gst.gov.in/services/login
Sonia S Chandran, B.A.LLB., LLM.