The GST Council in its 28th meeting held on 21 July 2018 had approved the key features and a new format of GST returns. Now, the GST Council has released the salient features of the new return format and the business process for information of trade and industry and other stakeholders.
Return filing process
- Outward
Supplies
- Facility for continuous uploading of invoices by the supplier and viewing of such invoices by the recipient on the GST common portal.
- These would be auto populated as 'Annexure of outward supplies' in the main return.
- Inward Supplies and
ITC
- Annexure of inward supplies - To be auto drafted based on invoices uploaded by suppliers.
- Credit mechanism:
- Recipient to avail Input Tax Credit (ITC) only on the basis of invoices uploaded by supplier.
- ITC pertaining to invoices uploaded by supplier by tenth of the subsequent month to be available in the same month. Invoices uploaded by the supplier after the tenth of the subsequent month shall be available to the recipient only in the return of the next month. For example, if an invoice of April 2018 is uploaded by the supplier on 11 May 2018, the recipient can claim ITC available in respect of such invoice in its return for the month of May 2018 and not of April 2018 resulting in working capital blockage.
- Provisional ITC in transition
phase
- The ITC availment mechanism would be relaxed in the transition phase of six months after the new system of return filing is implemented.
- In the transition phase, the recipient would be able to avail provisional ITC on self-declaration basis even in respect of invoices not uploaded by the supplier by the tenth of the next month.
- A 'missing invoice' facility would be available for this purpose. Reporting of 'missing invoices' can be delayed by the recipient for up to two tax periods to allow him time to follow up and get the missing invoices uploaded from the supplier.
- Main return
A monthly return for all registered persons to be called as "monthly return" in form GSTR to be filed by 20th of the subsequent month. Most of the details of outward and inward supplies to be auto-populated. Certain fields would be required to be entered manually by the taxpayer such as:
- Advances;
- Exempt and non-GST supply;
- ITC reversal; and
- Amount of tax, interest or late fee.
Key issues and recommended action vis-à-vis the current compliance system
Comments | Recommended action for businesses |
Annexure of supplies to main return | |
This annexure is similar to the current GSTR-1. The key deviations from GSTR-1 are:
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Annexure of inward supplies | |
This annexure would be auto-drafted on the basis of invoices
uploaded by the suppliers, as stated above. The key deviations from existing system are:
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Main Return (Form GSTR) | |
The main return would be mostly auto drafted. The key deviations from existing system are:
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Other key points
The new return filing procedure has certain additional key aspects such as:
- Amended return filing facility;
- Offline IT tool to be provided by the government for matching of invoices;
- Nil return filing facility through SMS;
- Small taxpayer (annualized turnover for year 2017-18 up to INR 50 million) can opt for quarterly filing with monthly payment of taxes - Forms SUGAM and SAHAJ.
SKP's CommentsThe GST council has undoubtedly proposed a major overhaul of the compliances under the GST regime. It is imperative for businesses to undertake systemic changes, undertake business impact/ readiness analysis to ensure readiness. Vendor-customer relationships would have to be strengthened in view of their inter-dependency in determining GST liability. Systems should be put in place to ensure smooth and timely compliances. |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.