The GST council in 31st meeting recommended the introduction and implementation of a new GST return system. The council made a recommendation to implement this new system in a phased manner from October 2019 to facilitate taxpayers. The new GST return system will have three main components – one Main Return (FORM GST RET-1) two Annexure, i.e. Form GST ANX- 1 and Form GST ANX-2.

In this blog, we will discuss in detail what these new return forms are, the difference between the existing and new returns, implementation schedule of new returns since these will be implemented in a phased manner and the intended benefits of the new return forms. We will begin by a tabular presentation about returns under the existing scheme.

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Existing Scheme of Returns

GSTR-1 GSTR-2A Cash Ledger GSTR-3B
GSTR-1 reports liability. Invoice level liability gets declared in GSTR-1. It is the Monthly/Quarterly return that should be filed by every registered dealer. It contains details of the outward supplies, i.e. sales. It has to file monthly by 11th of next month except in case of small taxpayers with turnover up to 1.5 crores in the preceding financial year, who can file the same on a quarterly basis. Information on the ITC is reflected in GSTR-2A. The suppliers GSTR-1 invoices get populated into GSTR-2A of the recipient. The recipient can avail and utilize this ITC for tax payment. The taxpayer creates a challan on the portal, and deposit cash and this cash payment by the taxpayer gets populated in the electronic cash ledger of the taxpayer GSTR-3B is the consolidated summary of return of inward and outward supplies. Through GSTR-3B, the taxpayer self declares his tax liability and ITC and pays his tax by utilizing cash and ITC both

New GST Returns

From October 2019 onwards, the current Form GSTR-1 will be replaced by new return FORM GST ANX-1. Details of the documents uploaded by the corresponding supplier(s) will be auto-populated in FORM GST ANX-2. Now below is a tabular presentation of the returns under the new system.

GST ANX-1 GST ANX-2 Form GST RET-1 Form GST RET-2 (SAHAJ Quarterly) Form GST RET-3 (SAHAJ Quarterly)
GST Anx-1 just like GSTR-1 reports the invoice level liability and is uploaded on the portal. The important details that need to be declared in Form GST ANX-1 are Outward Supplies, Inward supplies attracting reverse charge and details of Import of Goods and Services GST ANX-2 shows the Information on ITC. The Suppliers ANX-1 invoices get auto-populated in ANX-2 of the recipient. The recipient can accept/reject or keep the invoices pending, but he cannot edit the invoices as in earlier Return regime. Accepted documents shall not be available for amendment at the corresponding supplier’s end. The Taxpayers whose turnover in the preceding FY was above Rs. 5 crores will be required to monthly return by 20th of next month and those with aggregate turnover up to Rs. 5 crores can file this return by 25th of the month succeeding quarter. RET-1 needs to be filed based on Form GST ANX-1 and Form GST ANX-2 Taxpayers whose turnover in preceding FY up to Rs. 5 crores and have only B2C supplies and inward supplies attracting reverse charge can file this return. Taxpayers whose turnover in preceding FY up to Rs. 5 crores and have only B2C, B2B supplies and inward supplies attracting reverse charge can file this return.

A large taxpayer with previous financial year turnover more than 5 crores will upload their monthly Form GST ANX-1 from October 2019 onwards. However Small taxpayers whose turnover in the previous financial year was up to 5 crores will upload their first Quarterly FORM GST ANX-1 only in January 2020 for Quarter Oct-Dec 2019.

The Large Taxpayer will file their First GST RET-1 for the month of December 2019 by 20th January 2020. The Small Taxpayer opting to file FORM GST RET-1 on a quarterly basis and will file their first FORM GST RET-1 for Quarter Oct 2019 to Dec 2019 by 20th January 2020.

Implementation in New GST Return System

  • Under the new return system, there will be auto-population of key details in returns.
  • HSN will be captured at the invoice unlike in the earlier GST return system.
  • Consolidated Credit/Debit Note details can be given under the new return system.
  • There will be no requirement for the separate filing of GST ANX-1 and GST ANX-2. They are deemed to be filed on the filing of GST RET1/2/3.
  • There will be unidirectional flow of invoices and recipient will not be allowed to amend the invoices and the same can only be accepted or rejected at the recipient’s end but cannot be amended by him.
  • There would be capturing of place of supply at document level which shall ensure smooth settlement of IGST.
  • There will be provision for the amendment of the return under the new GST return system.

GSTN has released the trial version of New Return Offline Tool with Form GST ANX-1, Form GST ANX-2 (with a matching tool built-in) and a template for Purchase Register which can be used to import data for purchase register.

We have tried to present the New GST Return System in a summarised manner. Please share the blog with your friends also. If you have any doubt at any point please ask in the comment box. We will be more than happy to respond.

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