GST Authority to hold nation wide consultation on new return forms on December 7

Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) administration to hold a special filing demonstration session for new return system. This exercise is aimed to get the feedback before the new filing mechanism comes into effect from April 1, 2020.

Till date, there are over 1.20 crore tax assesses and each one of them has to file return either on monthly or quarterly basis, based on their turnover. It is mandatory as per the law.

“Select assesses along with their accountants will be invited in each of the circle (of Central Board of Indirect Taxes & Custom) on December 7,” Revenue Secretary Ajay B Pandey told reporters here.

Pandey said that there is no problem with regards to the basic filing of returns.

However, there are issues related to certain entries where some amendments have been made, issue of credit note or debit note, matching of input tax credit (ITC) for buyer filing monthly return and seller filing quarterly return and demand to produce physical invoice by tax officials even details mentioned in GST Return Form 2A. There was also a suggestion to further ease co-relation of various forms.

He said that many measures have already been initiated to resolve many of these issues. He has also stated that there is no bar on the assessees who wish to filee their returns on a quarterly basis or on a monthly basis.

The initiatives would help businesses to get ITC benefits without any hassles.

New Filing System

Pandey informed that the new GST return forms are now available on the portal for trial. As of now, nearly 85000 new forms have been filed on a pilot basis. These assesses are also filing existing forms as required by the law.

70.22 per cent of the assessees, having an annual turnover of less than 5 crore and engaged in B2C (business to consumer), B2B (business to business) as well as reverse charge mechanism-based supply activities can opt for quarterly filing of return. This form is called ‘SUGAM’ (RET-3). This is according to the turnover-wise distribution based on GSTR 3B (existing return form) filed during 2018-19.

About 28 per cent of the assessees, with an annual turnover of less than 5 crore and are engaged in B2C as well as reverse charge-based supply activities. They can opt for ‘SAHAJ’ form (RET-2). All other assessees (engaged in foreign trade or SEZ-based activities) will have to file RET-1. They will be required to file the returns on a quarterly basis but payment of tax dues on monthly basis through a form called PMT-08.

Over 7 per cent assessees with annual turnover of more than 5 crore. They will have to file the return on a monthly basis through RET-1. These assessees are a small in number, but in terms of overall tax payment they contribute nearly 85 per cent. Under the new system, these assessees will have to file their returns by the 20th of the next month, which means a majority of the collection will be with the Government by that date. For other assessees, the filing date is the 25th of next month.

Under the present system, one can present two different figures in GSTR 1 (showing liability) and GSTR 3 B (showing tax payment) as they are not linked automatically. Hence, one could show higher liability, claim higher input tax credit and pay less tax. However, this will be not be possible under new system.Through the RET-1/2/3, the taxpayer pays the auto-populated liability (from ANX-1) by utilising cash and ITC (auto-populated through ANX-2) both. Also, only the creator of the form will be able to amend the details.