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July 24, 2020

Government dumps new GST Return System

by Mahesh Mara in GST, GST Circular Notification

Government dumps new GST Return System

The government plans to improve existing GST return filing system and dumps the new GST Return System. The new system was supposed to be launched on 1 October this year. Yogendra Garg, Principal Commissioner, GST Policy at CBIC, while speaking at a webinar hosted by Assocham, said that the move is aimed at making compliance much easier.

What was the new GST Return System?

  • In the 31st GST Council Meet, it was decided that a New Return System under GST would be introduced for taxpayers. This return system would contain simplified return forms, for ease of filing across taxpayers registered under GST.
  • Taxpayers would be considered small if turnover is up to Rs 5 crore in the preceding financial year, whereas previously taxpayers were considered small if turnover is up to Rs 1.5 crore in the preceding financial year.
  • 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 instead of 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 mechanism for the continuous upload of revenue invoices on a real-time basis was to be implemented
  • Input tax credit can be claimed based on invoices uploaded by the supplier instead of self-declaration basis
  • Missing invoices and amendments, if any, could be made by filing an Amendment Return
  • Registration would be suspended, in cases where a taxpayer has applied for cancellation of registration, and returns would not be needed to be filed for this period

Improvements in the Current System

The GST Network and the IT support of the GST regime is working on modifying and improving the current returns and will soon announce an advanced version of the existing system. Given below are the expected improvements:-

  • New form GSTR 2B will be introduced, which like the GSTR 2A will have details of purchases of the company or business with added information on input tax credits.
  • Existing GSTR 1 form, which captures sales-related information, will be more detailed.
  • Form GSTR 3B, which gives the tax computation, will be auto-populated.
  • New features likely to be added in the new improved version of the existing return system include matching tool for comparison of GSTR 2A with purchase register, communication channel between buyer and seller, and an improved comparison table of tax liability and input tax credit (ITC) after incorporating ITC on IGST paid on imports.
  • GSTN is also looking to reduce error on part of taxpayers by improving the process of linking GSTR1 with GSTR3B and GSTR2A data with GSTR3B for flow of ITC.
  • E-invoicing, a form of electronically-authenticated invoices will be implemented from 1 October only for businesses with turnover of Rs 500 crore or more. Earlier, it was planned to implement e-invoicing for businesses with turnover of Rs 100 crore or more in a year.

Now the Government plans to implement the above mentioned improvements in the existing system instead of implementing the new Return System. The current improvised system is said to be come into effect soon.

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