Release of New GST Return Format and its key features by CBIC

GST Council in its 27th meeting held on 4th May, 2018 had approved the basic principles of GST return design. Now in its 28th meeting held on 21st July, 2018, GST Council approved the key features and new format of the GST returns. 

Some of the Key features are as follows:

PART-A (Key Features of Monthly Return)

• Monthly returns will have to be filed by all taxpayers except a few select categories such as ISD, small taxpayers, composition dealer, Non -resident registered person and persons liable to deduct TDS and to collect tax. The due date for filing of return by  such large taxpayers shall be 20th of the next month, similar to the due date of GSTR-3B return in the current structure.
• Supplier will have the facility for continuous uploading of invoices anytime during the month and such uploaded invoices shall be continuously visible to the recipient. This “viewing facility” will further enable the recipient to see return filing status of the supplier post the due date of filing the return.
• The proposed structure will function as follows: 
  • The registered person can avail the Input Tax Credit in respect of all Inward invoices which are uploaded before 10th of every month.
  • In respect of invoices uploaded by the supplier after 10th of the every month, ITC in respect of same will be available in the next month though viewing will be continuous.
  • Therefore, after the 11th of the next month the recipient shall be able to accept, reject or keep pending a particular invoice but the maximum limit of eligible input tax credit will be based on the invoices uploaded by the supplier upto 10th of the subsequent month. 
  • Taxpayers who have no purchases, no output tax liability and no input tax credit to avail in any quarter of the financial year shall file one NIL return for the entire quarter. In month one and two of the quarter, such taxpayer shall report NIL transaction by sending a SMS. Facility for filing quarterly return shall also be available by an SMS.
• In cases where the return will not be filed after uploading of the invoices, it shall be treated as self-admitted liability by the supplier and in such case recovery proceedings shall be initiated against the supplier after allowing a reasonable time for filing the return and paying taxes.
• Only invoices or debit notes uploaded by supplier shall be valid document for availing ITC by recipient.
  • Reporting of Missing invoices by recipient can be delayed upto 2 tax periods to allow him to follow-up with supplier and get the missing invoice reported by the supplier.
  • Thus, input tax credit shall inter-alia be dependent on uploading of invoices or debit notes by the supplier either before or after filing of the return, within the prescribed time limit.
• The Liability declared by supplier in the return shall be discharged in full at the time of filing of return. In case of any default, recovery shall be first made from the supplier. Only in exceptional circumstances, like missing taxpayer, closure of business by the supplier or supplier not having adequate assets or in cases of connivance between recipient and the supplier, etc. recovery of input tax credit from the recipient shall be made through a due process of service of notice and issue of order.
• Facility for locking of invoice by the recipient shall be available before filing of the return by him indicating acceptance of entering into transaction reported in the invoice.
• Where the GSTIN of the recipient is wrongly filled by the supplier, the invoice would appear on the viewing facility of a taxpayer who is not the recipient of such supplies and therefore input tax credit is not admissible to him. Recipient shall report such invoices as rejected invoice.
• In respect of Pending invoices which have been uploaded by the supplier but for which one of the three situations exist – 
  • The supply has not been received by the recipient
  • Where the recipient is of the view that the invoice needs amendment. 
  • Where recipient is not able to decide whether to take input tax credit for the time being. 
• Pending invoices shall be reported by the recipient and no input tax credit shall be availed by the recipient on such pending invoices. To reduce the number of pending invoices which needs to be reported, a simplification in the procedure for availing input tax credit shall be carried out.
• Table for reporting supplies with tax liability at various tax rates shall not capture HSN but would continue to capture supplies at different tax rates.
• Facility to file two amendment returns for each tax period within the time period specified in Section 39(9) of CGST Act 2017 is provided.
• Amendment of missing invoices reported later by the supplier shall be carried out through the amendment return of the relevant tax period to which the invoice pertains. Therefore, it would be advisable to report all the invoices and then avail the facility for amending return so that invoices reported late can also be amended through the amendment return.
• Higher late fee may be prescribed in case of change in liability of more than 10% through an amendment return.
• Separate reporting of Invoices/ Supplies in the Annual return on which the recipient does not intend to take input tax credit, which are kept pending or rejected.

PART-B (Key Features of Quarterly Return)

• Taxpayers who have a turnover upto Rs. 5 Crore in the last financial year (hereinafter are referred to as Small taxpayers) shall have facility to file quarterly return with monthly payment of taxes on self-declaration basis. This facility shall be optional and small taxpayer can also file monthly return like a large taxpayer. 
• Option for filing monthly or quarterly return shall be taken at the beginning of the year and thereafter they would continue to file the return during the year as per the option selected.
• The small taxpayers shall have option to file 1 of 3 months – quarterly return, sahaj (B2C supplies) or sugam (B2C + B2B supplies).
• The small taxpayers would be made available a payment declaration form to make the payment in which self-assessed liability and input tax credit on self-declared basis shall be declared. It shall only allow full payment of the liability arising out of uploaded invoices.

Disclaimer

The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.