New Simplified GST Return Filing Model

As per the decision taken at the 39th GST Council Meeting, the revised date for implementing the new GST return system is 1^st October 2020. The new GST return framework aims to simplify the return filing complexities by introducing the different types of returns for different business.

Under the new GST return model, set of new return forms are designed for small taxpayers and they are free to choose a GST return form which suits the most. In order the ensure the businesses get ample time to experience and understand the new return system, it is planned in a phased manner.

Phase I – Current system of filing returns

This is the current system of filing return and it will continue until the proposed returns are implemented:

GSTR 1 – Monthly Returns for those whose turnover is more than INR 1.5 Crores
GSTR 1 – Quarterly Returns for those whose turnover is less than INR 1.5 Crores
GSTR 3B – Monthly Summary Return to be submitted by 20th of the next month

Phase II – Prototype of new GST return

During this stage, a prototype of the new GST returns is made available to businesses to get a hands-on experience before the launch of the new return filing system. This is trail functionality and it is already enabled in the GST portal.

The trial functionality is a web-based interactive prototype, and these are actual mock-up of the new return filing tool. Using the trail functionality, the users can enter the data, navigate from page to page and use all functionality such as drop-down menus, invoice upload, upload of purchase register for matching with the system created inward supplies etc.

If you are yet to experience the trail functionality, we would recommend you to get your hand into it.

Phase III – Introduction of new GST return

In this phase, the new GST returns will be introduced, and all the registered businesses should file the returns as per the new framework. The new GST return system is expected to be introduced from 1^st April,2020.

GST Returns – current vs. new GST returns

All the current GST returns which are in place i.e. GSTR 1, GSTR 2A and GSTR 3B will no longer be in existence. In place of these, a taxable business will need to file one or few of the following returns/annexures/declarations:

Monthly Returns – To be filled by taxpayers whose turnover is more than INR 5 Crores i.e. Large Taxpayers (excluding Composition Dealers, ISD, NRR, TDS and TCS)
Quarterly Returns – To be filled by taxpayers whose turnover is less than INR 5 Crores i.e. Small Taxpayers
- Sahaj – For taxpayers making only B2C outward supplies
- Sugam – For taxpayers making both B2C and B2B outward supplies
- Quarterly Returns – For taxpayers making B2C, B2B and other supplies

To know more read ‘New GST Return Forms’

New GST return filing model

The GST return system consists of one main return, to be filed on a quarterly/monthly basis supported by two main annexures.

Main return: Unlike the current system which requires you to file multiple returns forms, the new GST return system comes with the concept of single return supported by outward supplies annexure and inward supplies annexure. Based on the return type opted, businesses are required to file the main return using form applicable to them.
Form GST ANX- I: Form GST ANX-1 is an annexure of outward supplies and inward supplies attracting reverse charge.
Form GST ANX – II: It’s an annexure containing details of auto-drafted inward supplies as upload by your supplier.

Read ‘Types of New GST Return Forms and Annexures’ to know more.

Overview of types of new GST returns

Monthly returns

Form GST RET-1 is main return form to be used for filing returns

Monthly filing along with the payment by 20th of the subsequent month
Outward supplies annexure (Form GST ANX-I) to be submitted before filing the monthly returns
24 / 7 upload of invoice during the month
Invoice uploaded by the Supplier will be auto-populated in the form of Inward Supplies Annexure (Form GST ANX-II)
Based on outward supplies annexure and Inward supplies Annexure, the details will be auto-populated in the monthly return
Real-time viewing facility of invoice uploaded by the supplier
Concept of reporting missing invoices by the recipient within the next 2 tax periods. This is to allow the recipient to follow up and get the missing invoice uploaded from the supplier
Provision to Lock, Reject and Mark the invoice as pending

Sahaj (B2C)

Form GST RET-2 is return form applicable for business option Sahaj returns

Quarterly filing with self-assessed monthly payment by 20th of the subsequent month (1st and 2nd month of the quarter) via Payment Declaration challan Form GST PMT-08

Outward supplies details in Form GST ANX-1 are required at summary level – POS and Tax Rate-wise
Invoice uploaded by the Supplier will be auto-populated in inward supplies annexure (Form GST ANX-II) and ITC will be available to the extent details shown in Form GST ANX-II
No concept of claiming ITC missing invoices

Know more about the Sahaj Return form and return filing cycle

Sugam (B2C + B2B)

Form RET-03 is the main return to be filed by the business opting Sugam

Quarterly filing with self-assessed monthly payment by 20th of the subsequent month (1st and 2nd month of the quarter) via Payment Declaration challan Form GST PMT-08
Form GST ANX-I to be submitted before filing Sugam returns
Based on Form GST ANX-1, outward supplies section in Sugam will be auto-populated
24 / 7 upload of B2B invoices during the quarter
Supplies other than B2B and B2C cannot be made through Annexure
Invoice uploaded by the supplier will be auto-populated in the form of Inward Supplies Annexure and ITC will be available on the same
No concept of availing ITC on missing invoices
Optional to report HSN at the invoice level

Quarterly Returns (B2C + B2B + all other supplies)

The return form and filing process are similar to monthly return except for the periodicity of return filing. Here, the main return form will be same as of monthly return i..e Form GST RET-01
Quarterly filing with self-assessed monthly payment by 20th of the subsequent month (1st and 2nd month of the quarter) via Payment Declaration challan Form GST PMT-08

Form GST ANX-I to be submitted before filing Sugam returns
Based on Form GST ANX-1, outward supplies section in Sugam will be auto-populated
24 / 7 upload of B2B invoices during the quarter
Supplies other than B2B and B2C cannot be made through Annexure
Invoice uploaded by the supplier will be auto-populated in the Form GST ANX-II and ITC will be available on the same
Businesses will be allowed to avail provisional ITC missing invoices and report the missing the invoice after 2 tax period

GST invoice management options

Missing invoice – Can be exercised by the recipient for invoices or debit notes which have not been uploaded by the supplier on which the recipient has availed input tax credit. Applicable only for business filing Form GST RET-1.
Pending invoice – Can be exercised by the recipient for invoices uploaded by the supplier in all those cases where the recipient is doubtful to avail ITC or it is restricted avail in the same month in certain situations.
Reject invoice – Can be exercised by the recipient for invoices which are filed by the supplier, but containing the wrong GSTIN
Viewing invoice - Invoices uploaded by the supplier will be visible to the recipient. The screen where it shall be visible to the recipient is called "viewing facility". This is also called as Inward Supplies Annexure (Form GST ANX-1)
Locking invoice – To indicate handshake between the recipient and the supplier. Acceptance of entering the transaction reported in the invoice. Once the invoice is locked, the supplier will not be able to alter the invoice
Deemed locking of invoice - Invoices which are uploaded by the supplier which are either not rejected or not kept pending by the recipient are deemed to be locked on the filing of return

GST return amendment options

Amendment of GST returns – Amendment returns allowed for each tax period
Amendment of GST invoices - Only when input tax credit has not been availed and the invoice has not been reported as locked by the recipient

Things to remember about new & simplified GST returns

Introduction of different types of returns based on turnover and type of supplies made
Single GST Return with the concept of Annexures
Profile based returns format based on the nature of supplies
24/7 upload of invoices into GST Portal
Real-time viewing facility of invoices uploaded by the suppliers
Amendment Returns concept introduced
ITC allowed only on the invoice uploaded by the supplier for Sahaj and Sugam returns
No automatic reversal of ITC on missing Invoice – ratification period of 2 months available
Filing of Nil Returns through SMS
Return Filing Status of the supplier can be viewed by the recipient in the portal