GST Council Introduce New GST Return System

GST Council Introduce New GST Return System

The Finance Ministry recently has unveiled a guide for the execution of the new GST return system. It has likewise set up a transition mechanism. Organizations would most likely utilize the new return filing forms under Goods and Services Tax (GST) on a trial basis for three months starting from July. The government has stated the transition plan for the new tax return filing system.

The Goods and Services Tax (GST) council in its 31st meeting decided that a new GST return system would be introduced towards facilitating the taxpayers. So as to ease the transition towards the new return system, a transition plan was worked out.

The new mechanism would be utilized on a trial basis from July to September. For the large taxpayers (those whose total annual turnover in the past financial was above 5 crores), Form GST ANX would replace GSTR 1 from October. Small taxpayers (with a total annual turnover in the past financial up to 5 crores) who file on a quarterly basis would have to use this in January for the October-December quarter.

Form GST RET-1 would replace GSTR-3B; it will be compulsory from January for each and every taxpayer.

In May 2019 a prototype of the offline tool has been shared on the common portal for giving the look and feel of the tool towards the users. The look and feel of the offline tool shall be the same as that of the online portal. Taxpayers might be aware that there are 3 main components to the new return, one main return (FORM GST RET-1) and two annexures (FORM GST ANX-1 and FORM GST ANX-2).

From July 2019, users shall be able to upload invoices utilizing the FORM GST ANX-1 offline tool on trial basis for familiarisation. Furthermore, users shall likewise be able to view as well as download, the inward supply of invoices using the FORM GST ANX-2 offline tool under the trial program. The summary of inward supply invoices shall also be available for view on the common portal online. Furthermore, from August 2019, users could import their purchase register in the offline tool and match it with the downloaded inward supply invoices to spot mismatches.

Between July to September 2019 (for three months), the new return system (ANX-1 and ANX-2 just) would be available for trial for taxpayers to make themselves familiar. This trial would have no effect at the back end on the tax liability or input tax credit of the taxpayer. During this period, taxpayers would continue towards fulfilling their compliances by filing FORM GSTR-1and FORM GSTR-3B i.e. taxpayers would continue towards filing their outward supply details in FORM GSTR-1 on a monthly/quarterly basis and return in FORM GSTR-3B on monthly basis. Non-filing of these returns would attract penal provisions under the GST Act.

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From October 2019 onwards, FORM GST ANX-1 would be made compulsory and FORM GSTR-1 shall be replaced by FORM GST ANX-1. The large taxpayers (that is, those taxpayers whose total annual turnover in the past financial year was over Rs. 5 Crore) would upload their monthly FORM GST ANX-1 from October 2019 onwards. However, the first compulsory quarterly FORM GST ANX-1 to be uploaded by small taxpayers (with a total annual turnover in the past financial year upto Rs. 5 Crore) would be due only in January 2020 for the quarter October to December 2019. It might be noted that invoices etc. could be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October 2019 onwards. FORM GST ANX-2 might be viewed simultaneously during this period but no action would be allowed on such FORM GST ANX-2.

For October and November 2019, large taxpayers shall continue to file FORM GSTR-3B on monthly basis. They will file their first FORM GST RET-01 for the month of December 2019 by 20th January 2020. The small taxpayers will stop filing FORM GSTR-3B and would start filing FORM GST PMT-08 from October 2019 onwards. They are required to file their first FORM GST-RET-01 for the quarter of October 2019 to December 2019 from 20th January 2020.

From January 2020 onwards, each and every taxpayer will be filing FORM GST RET-01 as well as FORM GSTR-3B shall be completely phased out.

Separate guidelines will be issued for filing as well as the processing of refund applications between October to December 2019.

However, a few parts of the transition plan require transparency. It is uncertain whether ITC credit would be matched for ANX-2 or GSTR-2 in the intervening time frame between July to September. Be that as it may, users are required to upload GST ANX-1 reflecting their outward liability, imports as well as internal supplies attracting a reverse charge. In light of GST ANX-1, filed by all, organizations would probably be able to download details of auto-drafted internal supplies in GST ANX-2. The trade would be required to acknowledge, reject or keep in pending the ITC on internal supplies. After completion of GST ANX-2, an auto-populated return in GST RET-1 would be generated. Every one of the activities should be done on a monthly basis.


eStartIndia Team

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