written by Khatabook | June 30, 2021

New GST Returns: An Overview

The GST return forms for taxpayers have been revised at the GST 31st Council Meeting in December 2018. The GST New Return System has brought simplified forms for easy filing to all GST taxpayers. Now only 1 return, namely GST RET-1 with two annexures - GST ANX-2 and GST ANX-1, needs to be filed every month within the GST due dates. The turnover limit of Rs. 1.5 Crores for those under the Composition Scheme has been increased to Rs. 5 Crores. They can also opt to file quarterly returns under the New Return Scheme.    

New GST Returns 

The main GST form for filing returns will be the GST RET-1. It contains all supplies, input tax credit and the tax payments with interest details. The form has 2 other forms, GST ANX-2 and GST ANX-1, as annexure.

  • GST ANX-1 will contain all Outward Supplies details and reports outward supplies, reverse charge on inward supplies, details services or goods imported etc., bill wise and real-time. B2C supplies are not included.
  • GST ANX-2 is the new form to report Inward Supplies, with most details auto-populated from the GST ANX-1 uploaded regularly by the suppliers. The supply recipient can use the real-time details from the auto-populated documents.

The Old GST Return Vs New GST Return System

Old GST Return System

GST New Return System

Definition of small taxpayer limited to Rs 1.5 crore in previous FY turnover with those above this limit being treated as large taxpayers.

The new system treats all taxpayers who have an annual turnover of below 5 crores in the previous FY as small taxpayers. Large taxpayers are those with turnover is higher than this limit.

The older system called for multiple return forms based on taxpayer categories like the GSTR-1, GSTR-7, GSTR-6, GSTR-5, GSTR-4, etc.

The new system has a main GST new return format which has been simplified and called the GST RET-1. The return has two forms annexed GST ANX-1 and GST ANX-2, which are mandatory for all GST taxpayers.

Businesses filed the outward supplies returns before the invoices could be uploaded and limited to the returns' filing time.  

The new system provides real-time and continuous revenue invoices upload features. 

Self-declaration of the input tax credit was the basis of claiming the credit.

The new system relies on the supplier invoices uploaded to automatically provide input tax credit which businesses can now claim on a real-time basis. 

You could file amendments, missing invoices etc., only in the next return. 

Amendments and invoices that are missing can easily be included through an Amendment Return.

Taxpayers needed to file GST returns pending cancellation of GST registration and until an official closure report is issued.

Suspension of the registration happens on an application to cancel the registration of a taxpayer. No returns need to be filed in the waiting period for completing cancellation procedures.

Moving to the New GST Return

From July 2019, the government tried out the GST New Return System in phases. During this period, i.e. July-Sept 2020, small taxpayers had to file GSTR-3B and GSTR within the GST return due dates. Large taxpayers had to file the GST ANX-1 from October, and GSTR-3B was to be filed all the way till November. Small assessees paid GST tax in PMT-08, which replaces the older GSTR3B. 

Offline Demo of New GST Return Utility Tool:

The GSTN or GST Network Portal has a new web-based Offline Tool to prepare and file returns under the new GST system. The tool helps businesses fill in the form easily. They can use several functionalities like invoice upload, drop-down menu selection options, inward supplies, purchases etc., to verify the auto-populated inward supplies. It also allows the assesses to provide feedback. It makes the tool more effective and offers a user-friendly experience.

Also Read: A Guide to Filing GST Annual Returns (GSTR-9)

New GST return System Changes:

Changes in the new return system:

  • Inward supplies are now reported by the recipients in GST ANX-1 while declaring all RCM liable supplies at the GSTIN level.
  • HSN or Harmonized System of Nomenclature code is used to submit document level details using the turnover as the reporting basis. Hence a separate HSN summary form is no longer required.
  • You no longer need to file B2B supplies under RCM (Reverse Charge Mechanism) in GST ANX-1 as done previously in the older GST return forms. However, GST RET-1 will still need the total amount.
  • The user can retrieve the HSN code from the GST ANX-2, where the suppliers have to mention their HSN code.
  • The supplies regarded as B2C-L is completely removed. Instead, small taxpayers with turnover up to Rs. 5 crores can file quarterly returns, unlike the previous limit of Rs. 1.5 crores.
  • Businesses can file the invoice level reports to report any missing invoices. This means missing invoices corresponding to unloaded invoices of the T 2 period can now be reported and uploaded.

New GST Return System Invoices Upload

Several new terms and procedures are part of the invoice upload process. 

Missing invoices:

If a supplier does not upload the debit note or invoice, the recipient of the goods can claim an ITC. The invoice or note will be termed a missing invoice. The supplier has to file and upload the invoice details within a specific timeframe. Otherwise, a failure to do so makes the recipient liable for ITC recovery on the missing invoices.  Thus, once the recipient claims ITC, you will have to report the missing invoices of the supplier, failing which the credited ITC can be recovered from the recipient under the new GST rules. 

Invoice locking:

The receiver of supplies can lock in an invoice, meaning that the recipient agrees with the invoice details reported. However, since the volumes of the invoice are generally large, it is difficult to verify all invoices at short notice to file the GST new forms. Thus, rather than locking individual each invoice, you can use the option to deem the invoices to be locked. These invoices are uploaded by the recipient as neither pending nor rejected by the recipient of the goods.

Invoice unlocking:

Whenever an ITC is claimed on any invoice by the recipient, the invoice itself becomes a locked new GST returns invoice that they cannot amend. If any invoice is improperly or mistakenly reported, you can change the locked invoice. However, the supplier needs to produce and report the credit/debit note and reduce the ITC claim to unlock the invoices. This reversal of the locked status of any invoice is always followed by a confirmation report of the ITC claim reversal.

Pending invoices:

Sometimes for various reasons, invoices are kept as pending invoices. Such invoices have been supplier uploaded, but one or more of the following could be present for particular reasons. Invoice defects in the GST new returns may be due to

  • The recipient not receiving the supplies.
  • The invoice appears to require an amendment asked by the recipient.
  • The ITC is not availed by the recipient temporarily for various reasons.

Such invoices are also known as pending invoices and form a batch of invoices with no ITC claims made against them.

 Rejected invoices:

Suppose the supplier makes an error in entering the GSTIN of the recipient in the new GST return formatThe recipient is not allowed to claim ITC on such invoices

  • The recipient of a wrongly marked invoice must immediately be rejected and reported.  To ensure hassle-free rejection and reporting of such rejected invoices, businesses can use a matching IT tool to create a master list of recipients of goods.
  •  The seller master list is compared to identify and correct the invoice with the right GSTIN number. 

ITC- Input Tax Credit Claims in the New GST Return System

ITC claims and availing of credits depends on the supplier uploading the debit notes or invoices by the 10th of the next month. The recipient can view and track such invoices. 

  • When the supplier does not issue a corrected invoice or credit/debit note, the recipient of the goods is liable to pay for it and claim an ITC refund.  The claims are reflected in the ITC table of the recipient who files such an inclusive report by the 11th of the subsequent month in which such an invoice is reported.
  • Note that the invoice can be viewed by both the supplier and recipient continuously. The supplier should act on it before the 10th of the next month, failing which the recipient can file these invoices with an ITC claim in the return on the 11th of the next month of having received such an invoice. It will reflect in the recipient’s ITC claim after that. 
  • All invoices uploaded after the 10th of the month by any supplier are posted to the recipient’s return for the next month. 

Amendment of Returns under the New GST Return System:

The new system also allows an assessee/taxpayer to make 2 amended returns in each tax period. The taxpayers can use the amended return when making such payment, so they don't incur any liability in terms of interest and late fees. 

  • The ECL or Electronic Cash Ledger reflects the ITC credits in the relevant GST forms and claims used when making payments with an amended return. You can amend missing invoices by reporting such invoices in the following period via the amendment return.
  • Note that invoice amendment is not possible if an acknowledgement by the recipient is present or the invoice is locked. 
  • To change any value specified in an invoice that is locked, you will need the credit/debit note from the supplier. 
  • The supplier can ask for the recipient’s help in unlocking such an invoice that you can then correct through an amendment return. 
  • Do note that it is possible to amend the invoice for GST only as long as there is no ITC claim against the invoice from the recipient’s side.

Also Read: The GST Amendment Act 2018 Explained

Conclusion

In conclusion, the GST act and returns under the new GSTR system are user-friendly and helpful to taxpayers. There’s a lot of GST return format videos to help you quickly understand the various aspects of the new GST returns

FAQs

Can I file Form RET-1 through SMS?

You can file Form RET-1 through an SMS only in case of a nil return. 

What is the source of auto-populated details in my From RET-1?

The information you have submitted earlier in Form ANX-1 and Form ANX-2 is auto-populated into Form RET-1.

What is Form ANX-1A?

Form ANX-1A is used to make amendments to details previously uploaded in Form ANX-1.

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