The new GST return system will be implemented from October 2020.
The present return filing system (GSTR-1, 2A & 3B) will continue until September 2020.
*Subject to CBIC notification
As per the decision taken at the 37th GST Council Meeting, the new GST return system for all taxpayers and for all forms will be implemented from April 2020.
| Old Return-filing System | New Simplified Return System |
| Taxpayers considered small if turnover is up to Rs 1.5 crore in the preceding financial year, otherwise considered large taxpayers | Taxpayers considered small if turnover is up to Rs 5 crore in the preceding financial year, otherwise considered large taxpayers |
| Multiple return forms to be filed depending on the category of taxpayers, such as – GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7, etc | A single simplified main return form GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2 to be filed by all categories of taxpayers |
| Revenue invoices can be uploaded only at the time of filing of returns of outward supplies | A mechanism for the continuous upload of revenue invoices on a real-time basis |
| Input tax credit could be claimed on a self-declaration basis | Input tax credit can be claimed based on invoices uploaded by the supplier |
| Missing invoices and amendments, if any, could only be made in the return of the following tax period | Missing invoices and amendments, if any, can be made by filing an Amendment Return |
| Taxpayers have to file GST returns until their registration has been cancelled, even if an application for cancellation of registration has been submitted | Registration will now be suspended, in cases where a taxpayer has applied for cancellation of registration, and returns will not need to be filed for this period |
The New GST Return System has been launched on a trial basis from July 2019, and the full-fledged system will be put into place from April 2020 (earlier: October 2019). This transition plan will be carried out in a phased manner. The trial phase will be for users to familiarise themselves with the annexure forms of the new return system.
The transition plan that was previously announced was as follows:
From July to September, during the trial phase, taxpayers will continue to file their GSTR-1 and GSTR-3B returns as per the current system in place. From October 2019, GST ANX-1 will need to be filed by large taxpayers, which will replace the GSTR-1 return. However, GSTR-3B will still need to be filed up to November 2019. In the case of small taxpayers. they will need to pay taxes using PMT-08, which will replace their GSTR-3B return.
From December 2019, large taxpayers will have to start filing GST RET-01, the main return under the new return system. For small taxpayers, their first GST RET-01 will need to be filed for the quarter of October-December 2019.
To know more about the transition into the New Return System, click here.
The GST Network (GSTN) has introduced an interactive web-based prototype of the Offline Tool
A taxpayer will be able to analyse and experience the practical aspects of the simplified GST returns with this prototype. A user can then share feedback or suggestions with the GSTN.
These are some of the changes introduced in the new return system-
There are several terms introduced in the new return system, with regard to the upload of invoices–
Whenever a supplier has not uploaded an invoice or a debit note, and a recipient claims ITC, it will be termed as “missing invoices”. When ITC is availed on missing invoices by a recipient, and these missing invoices do not get uploaded by the supplier within the stipulated time frame, then the ITC availed with respect to such debit notes/invoices will be recovered from the recipient.
A recipient will have the option to lock in an invoice, if he agrees with the details reported in that invoice. If there is a huge volume of invoices, it may not be practical to lock in individual invoices, and in such cases, deemed locking of invoices will be done on those invoices uploaded which are neither rejected nor have been kept as pending by recipient.
An invoice on which ITC has already been availed by a recipient will be considered a locked invoice, and will not be open for amendments. In case an amendment needs to be made to a particular invoice, the supplier will have to issue a debit or a credit note. An incorrectly locked invoice can be unlocked by the recipient online, subject to a reversal of ITC claim made, and an online confirmation thereafter.
An invoice which has been uploaded by a supplier, however one of the following scenarios applies to that invoice:
An invoice in such cases will be marked pending by the recipient, and no ITC will be availed by a recipient on these pending voices.
When the recipient’s GSTIN is filled incorrectly by the supplier, the invoice will be visible for a taxpayer who is not the receiver of such supplies. As ITC will not be eligible to be taken on these invoices, the recipient will need to reject these invoices. To make the task of rejecting invoices hassle-free, the matching IT tool will have the option to create a recipient/seller master list via which the correct GSTIN can be identified.
Availing of ITC will depend on uploading of invoices or debit notes by the supplier, within the stipulated time frame. An invoice uploaded by the supplier within the 10th of the following month will be visible continuously for the recipient. The taxes payable thereafter which can be claimed as ITC will be posted in the ITC table of the recipient’s return before the 11th of the following month. These invoices will be available for availing ITC in the return which is filed by the recipient. Invoices that are uploaded by the supplier after the 10th of the following month will get posted in the concerned field of the recipient’s return of the subsequent month, however, the viewing facility will be on a continuous basis.
Under the new return system, a taxpayer will be allowed to file two amendment returns for each tax period. A taxpayer will also be allowed to make payment through an amendment return, which in turn will help the taxpayer in saving on his interest liability. In case ITC is available in the taxpayer’s electronic credit ledger (ECL), it can be utilised for paying the liability in the amendment return. The amendment of a missing invoice which is reported later by a supplier can be done via an amendment return of the concerned tax period to which the invoice belongs.