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August 10, 2020

GST Returns with new features to be launched next month

by Mahesh Mara in GST, GST Circular Notification

GST Returns with new features to be launched next month

GST assessees in the country, numbering 1.2 crore, will have an improved form to file returns from September. Besides, the GST portal’s capacity to accept returns would be enhanced to a near double level.

Government planned to improve existing GST return filing system and dump 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.

However, in July 2020, the government planned to improve existing GST return filing system and dump 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 was aimed at making compliance much easier.

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.

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GST Portal upgraded to handle 3 lakh users

The portal of GST Network (GSTN), which provides the technology backbone for the goods and services tax, is managed by Infosys. In the 39th meeting of the GST Council, held on March 14, Infosys Chairman Nandan Nilekani made a detailed presentation to the GST Council for the transition into a better GST Network system and the requirement of hardware to enhance capacity for addressing the system-related issues that are being faced by taxpayers in the IT system.

Taxpayers were unable to access GST Return filing system before the deadline ran out. Taxpayers were complaining about the continuous inconvenience they faced while filing GST Returns. Frequent technical glitches of the GST Network website is become a big cause of inconvenience for taxpayers and other compliances continue to get affected due to these tech snags.

Being aware of all these issues, the GSTN network was scaled up to handle more than double the current load from August 2020. Enhancement of the capacity of the GSTN common portal will lead to handling 3 lakh taxpayers at any single point of time (increased from 1.5 lakh currently). 

A Group of States’ Finance Ministers under the chairmanship of Bihar Deputy Chief Minister and Finance Minister Sushil Kumar Modi met through video conferencing and took stock of the progress made on improving returns filing and e-invoicing

Prime Minister Narendra Modi informed that:-

  • The capacity to file returns on GST portal has been enhanced to 3 lakh while capacity of gateway will be 5 lakh at a point of time
  • Now there will be complete linkage of GSTR 1, GSTR 2B and GSTR 3B. While GSTR 1 denotes liability, GSTR 2A will help in knowing GSTR 1 filing date, filing status of GSTR 3B, amendment of invoices and date of cancellation of suppliers’ registration. GSTR 2B, on the other hand, shows possible credit. GSTR 3B indicates actual tax payment.
  • This will put a complete check on liability mismatch and greater check on Input Tax Credit (ITC) mismatch.
  • Talking about e-invoices, Modi said that there are 48,000 assessees based on GSTN number and 7,500 assesses based on PAN have been recognised to be covered under e invoicing system.
  • These assessees are just 0.1% of total taxpayer base but contribute nearly 45% of total collection.
  • The effort is to bring more and more assessees under e-invoicing trough reduction in threshold.
  • He said mails are being sent to the identified assessees for implementation of e-invoicing from October 1, 2020.

What is this new system?

  • Under the new system, taxpayers will continue to use their own Accounting/Billing/Enterprise Resource Planning systems.
  • However, invoices will not be reported to Invoice Registration Portal. This system is mainly for Business-to-Business (B2B) model.
  • More than 125 accounting and billing software providing entities have enrolled with GSTN.
  • They have integrated and tested their software. Now changes, as proposed in the July 31 notification, will be incorporated by billing software agencies in next 4-6 weeks.

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