New GST Return System

Author: Incorp Advisory India

In the 31st GST council meeting in December 2018, it was decided that a new return system under GST will be introduced. This system is applicable from 1st April 2020. However, in the 39th GST Council meeting held on 14th March 2020, the new return system was deferred from 1st April 2020 to 1st October 2020. The flow of events under new returns system will be as under:

Focus area for Monthly Return Filers-Focus area for Quarterly Return Filers-

$(can file daily, weekly, fortnightly, monthly)

*amendment to Form GST ANX-1 can be filed before the due date for furnishing of return for the month of September following the end of a financial year or the actual date of furnishing the relevant annual return.

Important points to be noted in above flow of events:

  • The credit in respect of documents edited or uploaded shall be made available through the next open Form GST ANX-2 for the recipient.
  • The liability for such edited documents will be accounted for the tax period in which the documents have been uploaded by the supplier.
Applying for GST return got simpler-

Annexures forming part of New GST Return System (Form RET-1/2/3):

Form ANX-1Form ANX-21. Contains details of supply + other income liable to be taxed under GST

  1. To be filed by supplier
  2. To be filed any time before 10th of month (can file daily, weekly, fortnightly, monthly)
  3. Details to be filed

a. GSTIN of buyer

b. Document type, number, date, value

c. Total taxable value, head wise tax amount

d. Six-digit level of HSN code mandatory

e. Place of supply1. Contains details of purchases

  1. Auto-populated on filing Form ANX-1 by supplier on a real-time basis
  2. 3 options for buyer:

accept, reject, pending (If not selected, it will be deemed to be accepted)

4. If Form ANX-1 is not filed by the supplier, ITC can be claimed only in Form GST RET-1 on provisional basis

ITC on provisional basis can be allowed only till:

a. Monthly return filer: T+2 months

b. Quarterly return filer: T+5 months

(‘T’ – period for which tax return is being filed)

Applicability of new return system is as follows:

  • ITC will be allowed till T+2 months for monthly returns and T+5 months for quarterly returns on provisional basis.

#quarterly return for turnover below 5 crores.

Switching type of returns:

One can switch from the form under which they are filing returns:

  • are allowed to switch against one another any number of times in a year: GST RET-2 to GST RET- 3, GST RET-3 to GST RET- 1, GST RET-2 to GST RET- 1.
  • are allowed to switch against each other only once a year: GST RET- 3 to GST RET- 2, GST RET- 1 to GST RET- 2, GST RET 1 to GST RET- 3
FAQs for different business type-ParticularsRetailer

(all transactions are B2C) up to turnover 3 croresWholesaler

(all transactions are B2B) up to turnover 3 crores.Any supplier with turnover greater than 5 croresExporter

with turnover less than 5 crores1. Which return is applicable?Form GST RET-2Form GST RET-3Taxpayer needs to compulsorily file return under Form GST RET-1 on monthly basisTaxpayer can file return under Form GST RET-1 on a quarterly basis2. Can the return form type selected earlier be changed during FY 2020-21?Any number of times in a year to GST RET-3 or GST RET-1Can switch to GST RET-2 only once a year or taxpayer can switch to form GST RET-1 without any restrictions on number of timesNoNo3. When should taxpayer file Form ANX-1?10th day of the next month10th day of the next month10th day of the next month10th day of the next month4. Till when can taxpayer accept/ reject/ unlock Form ANX-2?Before 25 days from the end of the quarter.Before 25 days from the end of the quarter.Before 20th of the next month.Before 25 days from the end of the quarter.5. How can taxpayer make the payment?Form GST PMT-08Form GST PMT-08Not applicableForm GST PMT-086. By when can taxpayer make payment?By 20th of next monthBy 20th of the next monthNot applicableBy 20th of the next month7. By when will taxpayer file in GST return?25 days from the end of the quarter25 days from the end of the quarter20th of the next month25 days from the end of the quarter8. Can taxpayer claim ITC if supplier has not filed ANX-1?NoNoYes, taxpayer can claim credit on provisional basis for T+2 monthsYes, the taxpayer can claim the credit on a provisional basis for T+5 monthsComparison of return system under GST-Old Return System under GSTNew Return System under GST1. Taxpayers considered small if turnover is up to Rs. 1.5 crores in the preceding financial year1. Taxpayers considered small if turnover is up to Rs. 5 crores in the preceding financial year2. ITC to be availed but which are not uploaded by the suppliers in GSTR-1 shall not exceed 10% of "eligible credit" available.2. ITC available is restricted to the amount reflected in portal3. Relief was provided for mentioning HSN code on the invoice based on certain turnover limits.3. Six-digit level HSN code is mandatory for:

a. If turnover is greater than 5 crores

b. Export /Deemed export /Import / SEZ supplies4. ITC bifurcation not required in returns4. Bifurcation of ITC is compulsory in returns:

a. ITC on services

b. ITC on capital assets

c. ITC on inputs5. Interest was to be computed on suo moto and were liable to be paid in the returns filed.5. Interest will be calculated by system (auto-calculation on the portal).

Please note that new GST return forms for Composition taxpayers, Unique Identification Number (UIN) holder, Input Service Distributor (ISD) are yet to be notified.

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