New GST Return System in India

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New GST Return System

In the 31^st GST council meeting in December 2018, it was decided that a new return system under GST will be introduced. This system is applicable from 1^st April 2020. However, in the 39^th GST council meeting held on 14^th March 2020, the new return system was deferred from 1^st April 2020 to 1^st 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 financial year or the actual date of furnishing 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-1

Form ANX-2

1. Contains details of supply + other income liable to be taxed under GST
2. To be filed by supplier
3. To be filed any time before 10^th of month (can file daily, weekly, fortnightly, monthly)
4. 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 supply

1. Contains details of purchases
2. Auto-populated on filing Form ANX-1 by supplier on real-time basis
3. 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-

Particulars	Retailer (all transactions are B2C) up to turnover 3 crores	Wholesaler (all transactions are B2B) up to turnover 3 crores.	Any supplier with turnover greater than 5 crores	Exporter with turnover less than 5 crores
1. Which return is applicable?	Form GST RET-2	Form GST RET-3	Taxpayer needs to compulsorily file return under Form GST RET-1 on monthly basis	Taxpayer can file return under Form GST RET-1 on quarterly basis
2. 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-1	Can switch to GST RET-2 only once a year or taxpayer can switch to form GST RET-1 without any restrictions on number of times	No	No
3. When should taxpayer file Form ANX-1?	10^th day of the next month	10^th day of the next month	10^th day of the next month	10^th day of the next month
4. 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 20^th of the next month.	Before 25 days from the end of the quarter.
5. How can taxpayer make the payment?	Form GST PMT-08	Form GST PMT-08	Not applicable	Form GST PMT-08
6. By when can taxpayer make payment?	By 20^th of next month	By 20^th of the next month	Not applicable	By 20^th of the next month
7. By when will taxpayer file in GST return?	25 days from the end of the quarter	25 days from the end of the quarter	20^th of the next month	25 days from the end of the quarter
8. Can taxpayer claim ITC if supplier has not filed ANX-1?	No	No	Yes, taxpayer can claim credit on provisional basis for T+2 months	Yes, taxpayer can claim credit on provisional basis for T+5 months

Comparison of return system under GST-

Old Return System under GST	New Return System under GST
1. Taxpayers considered small if turnover is up to Rs. 1.5 crores in the preceding financial year	1. Taxpayers considered small if turnover is up to Rs. 5 crores in the preceding financial year
2. 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 portal
3. 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 supplies
4. ITC bifurcation not required in returns	4. Bifurcation of ITC is compulsory in returns: a. ITC on services b. ITC on capital assets c. ITC on inputs
5. 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 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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