In 2019 The goods and service tax networks introduced an offline tool of New GST Return. This will help taxpayers in understanding and experiencing the current and upcoming returns system. This is an immersive, web-based New Return Framework prototype that helps taxpayers to browse through the new system’s multiple websites, providing them with first-hand experience and building their hopes about what is in store in the upcoming years. The Goods and Services Levy, India’s most important indirect tax overhaul, is on the road to an overall revamp of the New Returns System. 

GST was implemented in India in 2017 though Its implementation was not smooth. After the implementation of GST India faced inflation. To relax the taxpayers, the GST council introduced the New Return System under GST. This new return system has simple return forms for the ease of the taxpayers who are registered under GST. There will be one main return of GST RET-1 and two annexes of GST ANX-1 and GST ANX-2 under this New Return Scheme. With the exception of small taxpayers (turnover up to Rs. 5 crores) who can want to file on the same quarterly basis, this return will need to be filed on a monthly basis.

Why Do We Need New Return System

The New Returns process is created, keeping in mind the process of reconciliation at its heart. This new system was launched to encourage transparency, efficiency and it will allow faster account reconciliation. It would also help minimize tax avoidance, thus curbing the loss of revenue. This new return system will be profile-based. This means that the current GST return format would use a profiling algorithm to show only those fields of information that are important to the profile of the taxpayer. Taxpayers will have to upload invoices on a continuous and real-time basis. As these are simple forms this will lower the compliance cost of the companies. 

How Will Offline Tool Help

The Offline Tool helps users to browse through the new returns portal prototype and to explore and appreciate the functionality that will be provided under the New Return Framework GST. Taxpayers will be able to share the feedback by obtaining the first-hand experience of the prototype. Feedback will assist the tax network for products and services to fix possible glitches. The new return method, i.e. the offline GST tool, would remove the need for several forms to be filed and include a simpler return form. In order to replace GSTR-3B, GSTR-1, a new type has been designed. Using the new offline tool taxpayers can go through the new return form and understand how it occupies fields with all return forms and substitutes the new forms.

Forms To Be Submitted

GST RET 1 Form: The key return form is called GST RET-1 and will include fields for all products obtained, the production tax credit used, and the payment of taxes, including interest if any. It can be split into the following categories, i.e. 

  • GSTIN
  • Basic details
  • Summary of outward and inward supplies
  • Amount of TDS and TCS
  • Interest on late liability fee
  • Tax payment
  • Refund claimed from electronic cash ledger
  • Final verification

GST RET-2 Form (Sahaj): Taxpayers whose turnover is more than 5 crore in the last financial year and who are involved in the supplies to consumers and unregistered persons may opt to file the following return form. This form has the following fields.

  • GUSTIN
  • Basic stuff, including the taxpayer’s name, legitimate trade name, etc.
  • Summary of external suppliers and internal supplies that attract a reverse charge
  • Summary of inward supplies for claiming ITC
  • Sum of TDS/TCS credit in electronic cash register earned
  • Interest and late fee liability
  • Tax payment
  • Refund claimed from electronic cash ledger
  • Final verification

GST RET-3 Form (Sugam): Small taxpayers with a turnover of up to Rs 5 crores engaged in both B2B and B2C supplies will elect to file their quarterly returns using the GSTR SUGAM method. This form has the following fields.

  • GSTIN
  • Specific facts, including the taxpayer’s name, the legal name of the company, etc.
  • Summary of external supplies and internal supplies which attract a reverse charge
  • Summary of inward supplies for claiming ITC
  • Sum of credit earned from TDS/TCS in electronic cash ledger
  • Interest and late fee liability
  • Tax payment
  • Refund claimed from electronic cash ledger
  • Final verification

As per the new GST filing system the taxpayers will be classified on the basis of the turnover in the previous financial year and accordingly have to file GST RET 1 Form, GST RET-2 Form (Sahaj), GST RET-3 Form (Sugam) on a monthly or quarterly basis. Taxpayers will have to file Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2) as a part of these returns.

Features Of New GST Return System 

Unlike the government’s previous attempt where it didn’t allow taxpayers to understand the filing of return. The new return system has been designed for the convenience of taxpayers while filing their GST Returns conveniently. Here are some of the features of the New Return system under goods and service tax. 

  1. Monthly and Quarterly Filing Of GST Returns: The filing date and the turnover is based on the turnover of the taxpayer. GST will be calculated based on the reported turnover in the preceding financial year. If a taxpayer has turnover below Rs. 5 crores in the previous financial year. They will be required to file their returns every quarter, while others will file their returns every month with a turnover above Rs. 5 crores. Filing will have to be done before the 20th of every month and will not be applicable to composition dealers. Via an SMS platform, taxpayers who do not have a production tax liability may record Null transactions.
  2. Real-Time Uploading And Viewing Of Invoices: Taxpayers who have uploaded invoices by the 10th of every month will be able to enjoy an auto-population facility under the liability table. Suppliers can upload the invoices anytime and buyers can view the receipt for deeming as accepted, rejected, or pending. 
  3. Reporting of Missing Invoice: The recipient can report the missing invoices in case if the supplier is unable to upload the invoice within the stipulated period of time and it will be granted a delay of up to two tax periods to follow up with the suppliers and missing invoices can be uploaded. 
  4. Amendment Return Facility: erroneous submissions can be rectified in the subsequent month under the current return system. Taxpayers can file an amendment return that is limited to two amendments for each tax period. Payment will be authorized by the restoration of the provision, as it would help save interest liability. 
  5. Declaring Exports: Taxpayers will be required to fill in the details of the shipping bill under the field for details on the export of goods. It is their decision to determine whether, at the time of filing the return or after, they fill in these details. Filling of shipping details at a later date will not be considered as the filing of an amendment return.
  6. Payment Of Tax: If the taxpayer falls in the category of taxpayer, any liability amount declared in the return shall be discharged completely at the time of filling the main return by the supplier it is similar to what is filed under GSTR 3B currently. However, in the first and second months of each year, major taxpayers will be allowed to use a payment disclosure form, and the ITC will report them on a self-assessment basis.

When should Taxpayers File GST RET-1?

Under GST taxpayers are classified as small or large taxpayers depending on their turnover in the preceding financial year. Taxpayers with a turnover of up to Rs.1.5 crore in the previous financial year would be counted as minor taxpayers under the new GST return forms. Though the slab has been raised under the GST new return system. In this new arrangement, taxpayers with an annual turnover of up to Rs. 5 crores will be called small taxpayers. Any turnover that is above Rs. 5 Crore will be considered as a large taxpayer. Big taxpayers will have to file a monthly report, and tiny taxpayers will have to file a quarterly return.

  • GST ANX-1: Taxpayer can report details of all outward supplies, inward supplies that are liable to reverse charge, and import of goods and services that will not be reported invoice wise (Except B2C supplies). 
  • GST ANX-2: The taxpayer would be able to disclose details of all internal supplies using this appendix. These data will be auto-populated from the information posted by the suppliers in their GST ANX-1 as we described earlier.
  • GST RET-2 (Sahaj Quarterly): Taxpayers who have a turnover of up to Rs. 5 Crore in the preceding financial year and have only B2Csupplies. 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 choose to file under the Sahaj Quarterly scheme may report only reverse charges for outward supply under the B2C group and inward supplies.
  • FORM GST RET-3 (Sugam Quarterly): Taxpayers who have a turnover of upto Rs. 5 Crore In the preceding financial year and who have B2C and B2B Supplies. Returns should be filed on the basis of FORM GST ANX-1 and FORM GST ANX-2 on a quarterly basis, provided that the tax is charged on a monthly basis via FORM GST PMT-08. Taxpayers who choose to file under the Sugam Quarterly scheme can declare outward supply under the category of B2C & B2B and inward supplies that attract reverse charge only. Under Sugam, e-commerce operators are ineligible to register.

Why Should You Try Offline Tool

It is strongly recommended that taxpayers attempt to familiarise themselves with the current system by using the GST New Return System prototype. In addition to familiarisation, taxpayers who have had first-hand knowledge of the implementation will provide tax officials with input, which in turn will smooth out any bugs that could arise before the new return method is formally launched. You can save data, download, and upload a JSON File and error rectification is available in the new return system. 

Benefits Of GST Offline Tool

  • Facilitates daily upload of B2B Invoice details and other records. 
  • The GSTR-1 Excel worksheet can be used to prepare GSTR-1 data without connecting to the internet in offline mode.
  • The Java offline tool transforms the excel worksheet data into an acceptable format for the GST Portal.
  • Some measurements and confirmation are often done by the offline method to eliminate mistakes in the planning of returns.
  • It is also possible to import performance produced from accounting software into the offline tool.

Points To Remember

  1. Filing Of GST RET-1: GST RET-1 is the main return that is filed along with GST ANX-1 and GST ANX-2 under the New GST Return System.
  2. Declaration Of Excess Tax Collected: There can be times when excess tax can be collected from the recipients by the supplier. Such an excess volume of tax collected can be declared under some other obligation in Table 3A, point 8.
  3. Auto Population of Information Pertaining to Records Denial or Credit Reversal: Invoice documentation refused or held pending by the receiver in GST ANX-2 are auto-populated under points 1 and 2 in Table 4A. These accounts are net of notes for debit or credit.
  4. Interest & Late Fees: The system shall compute the interest and late fees charged to a taxpayer on account of late filing of the return, making late payment of taxes, uploading preceding tax period’s invoices, etc.
  5. Payment Of Tax: In order to make tax contributions, the applicant must first use the ITC. The taxpayer may then either use ITC under the same head or cross-use ITC from other heads in compliance with the terms of the Act and the rules laid down thereunder.
  6. Utilization Of ITC: The payment table in the form would indicate that ITC should be used. Taxpayers may, however, make modifications to the proposed usage of the ITC.
  7. Checking Balance Amount In Ledgers: Before completing the transfer itself, the taxpayer is permitted to display the balance sum available in electronic cash and in the electronic credit ledger.

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