A year after the Goods and Services Tax (GST) Council approved the initial blueprint for a simplified returns filing system, the GST Network (GSTN) on Wednesday released a prototype of the proposed new return, which will be officially launched later this year.
The prototype of offline tool of new return is an interactive demo for stakeholders to see various functionalities and give their feedback on the same, before it goes live. “It is an interactive prototype, which allows users to navigate from page to page and use functionality such as drop down menus, invoice upload, upload of purchase register for matching with system created inward supplies etc,” it said.
In the proposed system of new GST return filing, a normal taxpayer would have to file form GST RET-1 (Normal) or Form GST RET-2 (Sahaj) or Form GST RET-3 (Sugam) on either monthly or quarterly basis. Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2) will be filed as part of these returns. All the outward supplies will be detailed in GST ANX-1 while GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers’ GST ANX-1.
Suppliers will have to file a detailed return in form GST RET-1. Businesses which make supplies to only consumers (B2C) have to file return form ‘Sahaj’. It includes details of outward supplies and inward supplies attracting reverse charge as well as summary of inward supplies for claiming input tax credit (ITC). Businesses with supplies to both businesses (B2B) and consumers (B2C) have to file returns form ‘Sugam’, which would include summary of supplies made and tax liability, summary of inward supplies for claiming ITC, along with details of interest due and tax payment.
GSTN said stakeholders can share their comments on ‘email@example.com’. Since it is a demo tool and not the real tool, users can enter data but it will not be saved.
EY India tax partner Abhishek Jain said, “With this prototype being released, implementation of the new simplified returns is expected to be a reality soon. The companies would now need to ensure appropriate modifications are executed to their ERPs, business processes, etc. for culling out information to be disclosed and eligibility of input tax credits …”
The new return filing format will replace current requirement of filing final sales return GSTR-1 and summary sales return GSTR-3B. After approval for initial plan for simplified returns in May last year, the GST Council in July last year had decided that simplified GST return forms — Sahaj and Sugam — would be rolled out on a pilot basis from April 1, 2019, while mandatory filing across India would kick in from July. The pilot project, however, got delayed and is now expected to be introduced on a trial basis from July.
The new system under GST will be different from the existing system as it proposes an ‘Upload–Lock–Pay’ model for most taxpayers, wherein invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer for availing input tax credit. Input tax credit will be dependent on uploading of invoices by supplier within prescribed time limit, unlike current system where one avails ITC on a provisional basis.