What to file under new GST returns system?

The introduction of the New Returns System under the Goods and Services Tax is less than a month away and taxpayers will be happy to know that the new returns system does away with a majority of the N number of forms that taxpayers are currently required to submit while filing their GST returns.

Under the current GST filing system, taxpayers are required to file a number of forms that can be cumbersome and has proven to lead to erroneous filing. Depending on the taxpayer category, taxpayers are expected to file GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7 etc. But this will not be the case under the GST New Returns System. Under the simplified new system, taxpayers will be required to file a simplified main return form viz.GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2. Let us deep dive into GST RET-1 in detail.

GST RET 1

The main return form has been named GST RET-1 and it will contain fields for all supplies made, input tax credit availed, and the payment of taxes, along with interest, if any. It can be divided into 9 broad fields.

• GSTIN
  • The taxpayer will be required to fill in their Goods and Services Tax Identification number
• Basic details
  • The next field requires the taxpayer to fill in their basic details like their name and the name of the business, but if the taxpayer has input the correct GSTIN, this field will be auto-populated.
• Summary of outward supplies
  • Under this section, the taxpayer will be required to provide a summary of all outward supplies under their business including details of outward supplies, details of inward supplies that attract a reverse charge, debit/credit notes issued, advances received/adjusted and other reduction in liabilities, details of of supplies having no liability and total value and tax liability.
• Summary of inward supplies
  • This field will require the taxpayer to fill in details of all purchases in order to claim Input Tax Credit. This is an important field as all details from this field will be auto populated into GST ANX-1 or Annexure of Outward Supplies and and GST ANX-2 or Annexure of inward supplies.
• Tax deducted and collected at source (TDS and TCS)
  • Amounts will be credited in the electronic cash ledger based on returns filed by TDS deductors in Form GSTR -7 and TCS collectors in Form GSTR-8.
• Interest and late liability fee
  • If the taxpayer is late in filing their return, the system will automatically calculate the fee amount and the interest using their GSTIN.
• Tax payment
  • Taxpayers will be required to make the tax liability payment in cash after utilizing their ITC. Additionally, any payment of interest or penalty will be required to be made in cash.
• Refund claimed from electronic cash ledger
  • This field will be auto populated once the TDS and TCS amounts are credited in the electronic cash ledger.
• Final verification
  • The final step in filing GST returns under the New Return System, the taxpayer will be required to verify that all information provided is factually correct.

Who needs to file GST RET-1?

The new return form, GST RET-1 will need to be filed by taxpayers making business to consumer supplies, business to business supplies, inward supplies that attract a reverse charge mechanism, and supplies through e-commerce operators.

When should taxpayers file GST RET-1?

Under the Goods and Services Tax, taxpayers are classified as small or large depending on their business turnover in the preceding financial year. Under the current GST return forms, taxpayers having a turnover up to Rs.1.5 crore in the preceding financial year will be considered as small taxpayers. This slab is being raised under the GST new returns system. Under this new system, taxpayers having an annual turnover up to Rs. 5 crores will be considered as small taxpayers. Any turnover above this amount will now be classified under large taxpayers. Large taxpayers will be required to file a monthly return while small taxpayers will be required to file their return on a quarterly basis.

This form will also contain two annexure forms namely GST ANX-1 or Annexure of Outward Supplies and GST ANX-2 or Annexure of inward supplies.

GST ANX-1

Using this annexure, the taxpayer can report details of all outward supplies, inward supplies liable to reverse charge, and import of goods and services that will need to be reported invoice-wise (except for B2C supplies) on a real-time basis.

GST ANX-2

Using this annexure, the taxpayer will be able to report details of all inward supplies. Like we mentioned before, these details will be auto-populated from the details uploaded by the suppliers in their GST ANX-1.

GST RET-2 (Sahaj Quarterly)

Taxpayers who have a turnover of up to Rs.5 Crore in the preceding financial year and have only B2C supplies. Additionally, the returns should be filed based on FORM GST ANX-1 and FORM GST ANX-2 quarterly, but tax should be paid monthly through FORM GST PMT-08. Taxpayers who opt to file under the Sahaj Quarterly scheme can declare outward supply under B2C category and inward supplies attracting reverse charge only. E-commerce operators are ineligible to file under Sahaj.

FORM GST RET-3 (Sugam Quarterly)

Taxpayers who have a turnover of up to Rs.5 Crore in the preceding financial year and who have B2C and B2B supplies.  The returns should be filed based on FORM GST ANX-1 and FORM GST ANX-2 quarterly, but tax should be paid monthly through FORM GST PMT-08. Taxpayers who opt to file under the Sugam Quarterly scheme can declare outward supply under B2C & B2B category and inward supplies attracting reverse charge only. E-commerce operators are ineligible to file under Sugam.

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
• Features of the new GST returns system
• Changes under 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