In a bid to simplify the GST compliance, the GST Council has proposed the new GST returns expected to be introduced from 1^st October,2020.  Considering the diversity of businesses operating in the country, different returns forms supported with annexure are proposed as a part new return framework.

while the idea of different returns for different business aims at simplifying the GST compliance, businesses are recommended to carefully asses the business profile, their vendors, supply type etc. and accordingly choose the one which suits the most.

Having said there are different returns, the immediate question which comes to mind is what are the returns that are available on the GST shelf? Which return should I shop on the GST portal?

Let’s understand the different returns forms and annexures introduced in the new GST returns.

Return forms and Annexure in new GST Returns

Form	Description	Action
Form GST ANX- I	Form GST ANX-1 is an annexure of outward supplies and inward supplies attracting reverse charge.	You need to upload details of outward supplies along with purchases attracting reverse charge in FORM GST ANX – 1
Form GST ANX – II	It’s an annexure containing details of auto-drafted inward supplies.	Form GST ANX-II is an auto-populated annexure containing the details of document uploaded by your supplier on a real-time basis. Here you can either accept, modify or reject the invoice uploaded by your counterpart (seller) for confirming the ITC.
Form RET-1 (Monthly)	Form RET-1 is a monthly return to be filed by the businesses having aggregate turnover over more than 5 Crores in a financial year.	Business needs to file the monthly return by 20th of the subsequent month.
Form RET-2	Form RET-2 is a quarterly return applicable for business opting Sahaj returns (Up to 5 Crores)	Business need to file the monthly return by 25th of the subsequent month following the quarter-end
Form RET-03	Form RET-02 is a quarterly return applicable for business opting Sugam returns (up to 5 Crores)	Business need to file the monthly return by 25th of the subsequent month following the quarter-end
Form RET-1(Quarterly)	This is similar to monthly return but applicable for business having aggregate turnover up to 5 crores.	Business need to file the monthly return by 25th of the subsequent month following the quarter-end

As detailed in the above table, the main return will be supported by the annexures. Every return is supported by two annexures, one for reporting the outward supplies (liability) and the other one for inward supplies (ITC).

Among the main returns, you need to choose and file only one return which is suitable for your business profile.  Choosing the right GST return is key for simplification and assessing your business profile inline with new return types is must. This because each return form has its own implication on the Input tax credit.

The new GST returns proposed to be introduced on 1^st October,2020, aims to drastically reduce the complexities attached to GST compliance in the current day. In order to allow businesses to get used to new returns, a trail functionality has been enabled on the GST common portal.

The prototype of new GST returns will enable the businesses to experience and learn the new functionality before it goes live. Before you get your hands into the prototype of new GST returns, it is recommended to know few key aspects of new GST returns.

Here are the key highlights of all-new simplified GST return which will come into effect from 1^st April, 2020.

Classification of Taxpayers

Under the new GST return framework, the taxpayers are classified into small Taxpayers and large taxpayers. Small taxpayers are those having annual turnover up to 5Cr in previous financial year and taxpayers having a turnover of more than 5 Cr in a previous financial year are treated as large taxpayers.

This change will widen the small taxpayer’s bracket eligible for quarterly returns from the existing threshold of 1.5 Cr. The increased threshold will ensure that around 90% of businesses will benefit the simpler compliance under the new GST return framework.

Single GST Return

Single GST return is introduced with the concept of outward annexure (Form GST ANX-1) and inward annexure (Form GST ANX-II). In outward annexure, the businesses are required to admit the liability by furnishing the outward supplies and inward supplies attracting reverse charge. In-turn, these details will be auto-populated into your main return.

On the other hand, inward annexure will capture the details of purchases for claiming the input tax credit. This annexure will be auto-populated based on the invoices uploaded by your supplier. Like Form GST Anx-1, these details too will be auto-populated into main GST return.

The new GST return framework will significantly reduce the efforts and time required for filing returns as most of the details required are auto-populated into the main returns.

Different Types of New GST Returns

Based on the size the businesses, the type of supplies, customers you deal and the geography, the GST council has designed different type of GST Returns. Sahaj, Sugam and quarterly normal returns are the quarterly return available for small taxpayers. Monthly return (Form GST RET-1) for larger taxpayers.
The returns are so simple that it requires only fewer details basis the business profile and the compliance requirements in relation to ITC are very minimum. It is expected that the cost of compliance will be less.

Profile Based Returns Format

Instead of having a common GST return format for all, the council has designed different type of GST returns considering the diversity of business operations. This comes with the option to personalize the return format based on the supplies you make.

As a result, only the relevant information will be shown based on the business profile. For example, a small manufacturer or trader, buying and selling locally may need to file a return consisting of only fewer information.

Continuous Upload of Invoice

The new GST return is provisioned for continuous uploading of invoices by the supplier anytime during the month. At the end of the filing period, these invoices will be auto-populated in the return.

By just uploading the Invoices, most of your work-related return filing is done and at the end of the return period, it becomes so simple that you can validate with your tax expert and file the return.

Viewing facility of Invoices     

Based on the invoices uploaded by your supplier, the real-time viewing facility of invoices is made available to the buyer. This achieved by auto-populating the details of the invoices uploaded by the supplier into the inward supplies’ annexure known as Form GST ANX-II. This also comes with an option for looking of invoice.

This will help you to verify and lock the invoice to confirm the eligible ITC. Locking of invoice will ensure that invoices uploaded by your supplier is correct and the invoice will be locked for further modification by the supplier. Thus, the risk of ITC loss in a certain business situation is mitigated.

Amendment of Returns and invoice

The concept of revised returns to be introduced and you will be allowed to revise return for any tax period. Returns will be revised either by filing amendment returns or reporting of missing invoice.  Provision to revise the current returns (GSTR-1 and GSTR-3B) is not available.

Also, amendment (editing) of invoice by the supplier is provisioned in the new GST return framework. The supplier can edit only if the invoice has not been locked by the recipient. If it is already locked, unless it is reset/unlocked by the recipient, the details cannot be edited by the supplier.

No Automatic Reversal of ITC

No automatic reversal of input tax credit at the recipient’s end in the case of default in the payment of tax by the supplier. In such situations, recovery efforts will be first made from the supplier.

ITC on Missing Invoice

Invoices or debit notes which have not been uploaded by the supplier, the recipient is allowed to avail input tax credit (ITC) on a provisional basis in the same month and a window of 2 tax period are allowed to report such missing invoice.

The facility of availing ITC and reporting is allowed for Larger taxpayers (Monthly returns) and small taxpayers filing RET-1 (quarterly normal return). In other words, businesses who have opted Sahaj return and Sugam return will not be allowed avail ITC on the missing invoice.

The Sahaj return is a quarterly GST return to be filed by 20th of the subsequent quarter. The businesses whose turnover in the previous financial year is up to 5 Crores and engaged in making outward supplies only to B2C i.e. end consumers or unregistered businesses can opt to file GST Sahaj return. The form to be filed by businesses opting Sahaj is Form RET-2

Though the Sahaj return in form RET-2 filing is on a quarterly basis, the payment of GST needs to be made on monthly basis using the payment declaration form known as Form GST PMT-08. The businesses need to determine the tax liability and Input tax credit on the self-assessed basis and accordingly remit it through Form GST PMT-08

Let’s understand the complete Sahaj return filing Cycle.

How to file Sahaj Return in Form RET-2

The details of outward supplies in GST Sahaj form are required only at a summary level. This is because, GST Sahaj is applicable only if you are making B2C supplies and your customer (the buyer) will not be in a position to claim ITC on the supplies made by you.

The GST Sahaj return filing cycle through Form RET-02 is explained with an illustration.

We have considered the April-June, 2019 to explain the GST Sahaj return filing cycle. In the above illustration:

• The taxpayer makes the self-assessed payment for the month of April, 2019 and May, 2019 using Payment Declaration Form GST PMT-08
• On completion of the quarter April to June, 2019, GST Sahaj return needs to be filed by 20th of July 2019 with the payment of Tax
•  The taxpayer needs to furnish the consolidated outward supplies details at rate-wise (5%, 12% etc.) and place of supply-wise in Form GST ANX-1. This, in turn, gets auto-populated into the Sahaj return Form GST RET-2
• Input Tax credit details will be auto populated in Sahaj return form RET-2
• As illustrated, as and when the invoices are uploaded by the supplier, details of ITC will be auto-captured in inward supplies annexure ‘ANX-02’ and which in turn gets auto-populated in GST Sahaj return form.
• Remember, Sahaj returns forms will not have a concept of claiming and reporting ITC on missing invoices which supplier has not uploaded. You can claim the ITC only to the extent of invoice uploaded by the supplier
• Once the required details are furnished in GST Sahaj return, the next step is to make payment
• The tax payment here includes:
  • Tax payable for supplies made during 3rd month of the quarter
  • Adjustment due to the difference in tax paid on the self-assessed basis in the first and second month versus the outward supplies’ details declared in the Sahaj return.
  • Adjustment due to ITC claimed on self-assessed basis versus the auto-populated ITC available in inward supplies annexure.
• Once the tax payment is done, you can submit and file the GST Sahaj returns.

Conclusion

For businesses, the Sahaj return filing cycle is very simple. All you have to do is the self-assessed monthly payment and mention the consolidated details of outward supplies in annexure -1. The rest of the details are auto-populated in Sahaj return. The businesses can leverage on simplification only when they carefully assess their businesses profile and choose the one which is suitable.