GST Council Recommendations for New Returns Design | Tally Solutions

GST COUNCIL RECOMMENDATIONS FOR FILING OF NEW RETURN DESIGN


  • 1. 27 th Council Meeting and the gist of GST Council Recommendations
  • 2. Emphasis on three stage transition process to new return filing system
  • 3. Key elements of New return filing schema
  • 4. Possible revision in due dates based on the GST Council recommendations

1. 27 TH COUNCIL MEETING AND THE GIST OF GST COUNCIL RECOMMENDATIONS

In the 27th council meeting, the council agreed on principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification.

2. EMPHASIS ON THREE STAGE TRANSITION PROCESS TO NEW RETURN FILING SYSTEM

A three-stage transition process include:

Phase 1:
  • The first stage in transition shall be to continue the present system of filing of return GSTR 3B and GSTR 1 for a period of six months.
  • To continue the suspension of GSTR 2 and GSTR 3 return.
  • Stage 1 shall not last for period exceeding 6 months, by which time the new Return filing software will be ready in it’s place.
Phase 2 :
  • The new return will have facility for invoice-wise data upload.
  • The GST council recommendations here also stressed on the fact that the new Return will also have the facility for claiming input tax credit on self declaration basis, as in case of GSTR 3B now.
  • The GST council recommendations also made a statement to tax payers that during this transition process, they will be constantly fed with information about gap between credit available to them as per invoices uploaded by their sellers and the provisional credit being claimed by them.
  • But also the GST council’s recommendations on new Return filing schema gave a warning in kind that after the end of the phase 2, the facility of provisional credit will get withdrawn and input tax credit will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods.

3. KEY ELEMENTS OF NEW RETURN FILING SCHEMA

  • One monthly return:
    • Every registered taxable person shall file only one monthly return with exception to composition taxable person
    • The turn over based criteria for determining periodicity of returns shall continue in the new return schema as well so as to manage the load on the IT system
    • Composition taxable person’s having nil transaction shall have the facility to file quarterly return under the new return schema
  • Unilateral flow of invoices:
    • There will be one-way flow in invoices uploaded by the seller on anytime basis during the month which would be the valid document to avail input tax credit by the buyer
    • All the uploaded invoices during the month would be made visible for the buyers
    • No need for uploading purchase invoices
    • All B2B invoices shall carry information regarding HSN at four-digit level or more to achieve uniformity in the reporting system
  • Crispier IT interface and simple design:
    • For every B2B invoice wise level details furnished by the taxpayer, the system will automatically calculate the tax liability on it
    • And the new return schema will also be capable to calculate the Input tax credit based on the information furnished by the sellers
    • Taxpayer shall be also given user friendly IT interface and offline IT tool to upload the invoices
  • New Return schema don’t entertain auto reversal of credit:
    • The new return schema doesn’t have the provision for reversal of input tax credit from buyer on non-payment of tax by the seller
    • Instead after the implementation of new schema, any default in payment of tax by the seller would be recovered from the seller only
    • However, reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc.
  • New set of principles for recovery and reversal:
    • Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order
    • The process would be online and automated to reduce the human interface
  • A check on supplier:
    • Any invoice unloaded by the seller to pass the input tax credit, who has defaulted in payment of tax above the threshold amount as may be prescribed then in respect of such invoice, the credit will be blocked to him so as to avoid the misuse of input tax credit facility
    • Proposed usage of Analytical tools to identify such transactions at the earliest and prevent loss of revenue

4. POSSIBLE REVISION IN DUE DATES BASED ON THE GST COUNCIL RECOMMENDATIONS

GSTR 3b filing date
  • Going by the new schema proposed by the GST council GSTR 3B would continue for period of 6 months
  • And the GSTR 3B filing date to continue to be as 20th of following month for all types of tax payers.
GSTR 1 filing date
  • Going by the new schema proposed by the GST council gstr 1 would continue for period of 6 months
  • And the due dates for GSTR 1 filing date to continue to be as
    • For tax payers turnover exceeding Rs. 1.5 crores:
      • i) For the month of July. – 11 th of August 2018
      • ii) For the month of August. - 11 th of September 2018
    • For tax-payers turnover not exceeding Rs. 1.5 crores or up to 1.5 crores:
      • i) For the quarter (July to September) - October 31 st 2018
      • ii) For the quarter (April to June). -. July 31 st 2018


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