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New and Simplified GST Returns Released: Pilot Starts from April 1, 2019

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New and Simplified GST Returns Released: Pilot Starts from April 1, 2019

GST, the biggest tax reform in the country, will undergo another major revamp w.e.f.  April 1, 2019. While the 27th GST Council Meeting approved Simplified Returns, the 28th GST Council Meet laid down the rules on Return Simplification. After this, return forms: GSTR 2 and GSTR 3 were suspended due to their complex structure and GSTR 1 and GSTR 3B were retained.
The transition to new simplified forms was divided in 3 phases, last being avilability of Simplified Returns on the portal, and few  days back, the Simplified Returns were released on the GSTN portal. The pilot starts from April 1, 2019 which shall be made mandatory from July 1, 2019.

Simplified Return Forms
In an attempt to simplify Taxation for Small Taxpayers, the GST council decided upon implementation of new and simplified tax returns, namely,

  • Normal Return - FORM GST RET-1 (Shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices)
    • Monthly Normal
    • Quarterly Normal
  • Sahaj Return – FORM GST RET-2 ( Quarterly)
Outward supply under B2C category and inward supplies attracting reverse charge only •
  • Sugam Return – FORM GST RET-3 ( Quarterly)
Outward supply under B2C and B2B category and inward supplies attracting reverse charge only

These tax returns are being introduced to free the small taxpayers from the hassles of taxation, thereby helping them to focus on the growth of their business.

FAQs

Who are small taxpayer in GST Regime?
Business owners with an annual turnover up to Rs.5 crores are considered as Small Taxpayers.

What is the periodicity of these return forms?
The periodicity of filing return will be deemed to be monthly for all taxpayers unless quarterly filing of the return is opted for.

Can a newly registered taxpayer opt in to file Sahaj or Sugam return forms?
For a newly registered taxpayer, turnover will be considered as zero and hence he/she will have the option to file monthly, Sahaj, Sugam or Quarterly (Normal) return.

Can I change the periodicity of my return filings?
Change in the periodicity of the return filing (from quarterly to monthly and vice versa) would be allowed only once at the time of filing the first return by a taxpayer. However, if a Taxpayer is filing his return as Sahaj, he can switch over to Sugam or Quarterly (Normal) return more than once in a financial year.

Points to be noted:

For a person opting for Sahaj/Sugam,

  • Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52.
  • Such taxpayers shall not take credit on missing invoices and shall not be allowed to make any other type of inward or outward supplies.
  • Such taxpayers may make nil rated, exempted or Non-GST supplies, which need not be declared in the said return.
  • Taxpayers opting to file monthly return or Quarterly (Normal) return shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices.

 What are the advantages of the Simplified Return Forms?

  • The taxpayer shall be able to upload invoices to the GST Portal 24x7.
  • The recipient would be able to accept or reject the invoice in real-time.
  • Filing of Nil returns can be done via SMS
  • The recipient will get credit during a tax period on the basis of the details of documents uploaded by the supplier up to the 10th of the month following the month for which the return is being filed for. Such credit can be availed i.e. credited to the ledger of the recipient only on filing of his (i.e. recipient’s) return. There may be the following two scenarios:
  1. For monthly basis: The recipient shall be eligible to take credit in his return based on the documents uploaded by the supplier up to the 10th day of the filing, irrespective of whether the supplier files his return on the monthly or quarterly basis.
  2. For quarterly basis (Normal, Sahaj or Sugam): The recipient shall be eligible to take credit in his return based on the documents uploaded by the supplier up to the 10th day of the filing month, irrespective of whether the supplier files his return on monthly or quarterly basis.

It is being anticipated that these return forms shall greatly simplify the taxation system in India, reduce the tax burden from businesses and help eliminate tax evasion in the country. For further updates on the simplified tax return forms, keep an eye on the IRIS Blog.

Read the comparative analysis of the current and upcoming taxation scenarios here.

For any queries, feel free to connect with us at support@irisgst.com

About Manoj Jain

Manoj

Manoj Jain, a CA and CS, has been working with IRIS for over 8 years and is currently one of the key subject matter experts for IRIS’ GST compliance offerings. He also has been guiding the clients for GST law related matters. Before GST he was handling US compliance analyzing US financial statements and reviewing XBRL filings for US and India market. He enjoys listening to music and traveling.

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