Changes under the new GST returns system

The New Return System under the Goods and Services Tax is due to be rolled out in October 2020, and it promises to make the filing of GST returns (that have been extremely cumbersome so far) a breeze. What are the changes that make this new system simple, convenient and efficient? Let's find out.

HSN Code to replace HSN summary
HSN code stands for Harmonized System of Nomenclature and has been a globally accepted system for over 30 years. It is a 6 digit uniform code that classifies over 5000 products. Under the current returns system, taxpayers are required to use an HSN summary viz. a summary of all the products and services that they have sold under that filing period. Under the New Returns System, this summary will be replaced by the HSN code. This HSN code will help classify the taxpayer slab on the basis of turnover. Taxpayers can also acquire their HSN code from the GST ANX-2 (from where a supplier is required to declare their HSN code).

File returns through SMS
As a large number of taxpayers are dependent on the services of a chartered accountant to file their GST returns even when they are filing zero returns, the GST network has announced that taxpayers filing zero returns can do so using an SMS based system. The filing of the returns will still be mandatory, but the filling can be done using text messaging which will be validated using a one time password.

Reduced number of forms
One of the most challenging aspects of the current return filing system is the requirement of filing multiple forms. This system will be eradicated with the introduction of the new return system under GST. Taxpayers will only be required to fill one 9 step form called GST RET-1. This form will also have two annexures, namely ANX-1 for outward supplies and ANX-2 for inward supplies.

Changes in form fields
Apart from the reduction in the number of return forms, there will be several changes made to the form fields. For instance, under B2B supplies that are liable to a reverse charge mechanism, the taxpayer need not show the same in GST ANX-1. They will just need to declare the aggregate amount in the new return form.

Changes in frequency of filing
Taxpayers having a turnover up to Rs. 5 crores in the preceding financial year will be considered as small taxpayers and will be required to file their returns every quarter. Any turnover above this amount of Rs. 5 crores will now be classified under large taxpayers who will be required to file their returns every month.

Introducing the amendment return
Under the GST new return system, taxpayers will have the facility to amend a return, once filed. Under the current system, once a return is filed, it cannot be amended, and any errors or certification can only be made by making an amendment to those invoices in the following month's return. Under the new return system, the taxpayer will be able to file GST RET-1A as an amendment to the original return submission.

The new return system is expected to make the filing of GST returns convenient, simple and highly efficient for both taxpayers as well as tax authorities.

To help you understand the new GST returns, we have broken down the system in a few essential topics, each answering the most critical questions around the New Returns under GST.

• GST 2.0 - Introduction to New GST Returns
• What to file under new GST returns system
• Features of the new GST returns system
• New GST returns vs old GST returns
• Uploading invoices under the new GST returns system
• New GST Return Offline Tool
• Timeline for New GST Return