CBIC issues Draft of ‘Simplified Formats of GST Returns’, as approved by GST Council
CBIC issues draft ‘Simplified Formats of GST Returns’, for comments by 31 Aug. 2018, in the public domain, based on key features of simplified GST Returns approved by the GST Council, incorporating a brief note on salient features of the new return formats and business processes for the information of trade, industry and other stakeholders, as under:
1. Key Features of Monthly Returns
2. Key Features of Quarterly Returns
3. Questionnaire for filing up Annexure of supplies to Main return
4. Annexure of Supplies to main return: Details of outward supplies, imports and inward supplies attracting reverse charge with instructions
5. GSTR: Main return with instructions
6. Annexure of Inward Supplies: Auto-populated from Annexure of supplies with instructions
7. Questionnaire for filing amendment to Annexure of supplies to Main return
8. Amendment to Annexure of Supplies: reported earlier along with instructions
9. GSTR –A: Amendment to main return with instructions
10. Option for choosing type of quarterly return
11. GST PMT—: Payment of self-assessed tax before filing return with instructions
12. GSTR – Sahaj: Return format for taxpayers making B2C supplies only with instructions
13. Annexure to Sugam: for reporting B2B supplies with instructions
14. GSTR – Sugam: Return format for taxpayers making B2C and B2B supplies only with instructions
15. GSTR-: Quarterly Return format for taxpayers filing quarterly return
Key features of Simplified Quarterly GST Returns/ Formats
1. Quarterly filing and monthly payments: It is proposed to provide facility for filing of quarterly return to small taxpayers, who had a turnover upto Rs. 5 Cr. in the last financial year. The turnover shall be calculated in the manner explained in para 1 of Part A above. However, they would still need to pay their taxes on monthly basis and avail input tax
credit on self-declaration basis to pay the monthly taxes.
2. Quarterly or monthly return: Option for filing monthly or quarterly return shall be taken from these small taxpayers at the beginning of the year and generally thereafter they would continue to file the return during the year as per the option selected. During the course of the year option to change from monthly to quarterly or vice-versa shall be allowed only once and at the beginning of any quarter. This is necessary to avoid confusion for the taxpayer and also to avoid complex validations in the IT system.
3. Options in quarterly return: Small taxpayers having turnover upto Rs. 5 Cr. would have option to file one of three forms, namely – Quarterly return, Sahaj or Sugam. Quarterly return shall be akin to the monthly except that it has been simplified and shall not have the compliance requirement in relation to
(i) Missing and pending invoices as small taxpayers do not use these procedures in their inventory management.
(ii) Supplies such as non-GST supply, exempted supply etc as they do not create any liability.
(iii) The details of input tax credit on capital goods credit shall also not be required to be filled.
This information shall be required to be filled in the Annual Return. Small taxpayers who would like to facility of missing and pending invoice may file monthly return.
4. Quarterly Return: Option to create profile in the quarterly return shall also be available. Sahaj and Sugam are predetermined profiles of the quarterly return.
5. Sahaj and Sugam Returns: Small taxpayers often have purchases only from the domestic market and sales in the domestic market i.e B2B purchases locally and supplies either as B2C or B2B+B2C. They constitute a very large part of the tax base and therefore two simplified quarterly returns are proposed for them respectively. They have been named as “Sahaj” (only B2C outward supplies) and “Sugam” (both B2B and B2C outward supplies). In effect, these returns are pre-determined profiles for small taxpayers using quarterly return.
6. Uploading of invoices: The recipients from these small taxpayers would need uploaded invoice for availing input tax credit and therefore the small taxpayers would be given facility to continuously upload invoices in the normal course. The invoices uploaded by 10th of the following month would be available as input tax credit to the recipient in the next month as is the case in case of purchases from large taxpayers.
7. Payment declaration form for payment of monthly taxes: These small taxpayers would continue to pay taxes on monthly basis and in the first and second month of every quarter, they would use a payment declaration form to make the payment. In the payment declaration form, self-assessed liability and input tax credit on self-declared basis shall be declared. To assist in tax payment and availing input tax credit, necessary liability arising out of uploaded invoices of outward liability and input tax credit flowing from viewing facility would be shown to the taxpayer. The payment declaration form shall only allow full payment of the liability arising out of uploaded invoices. Late payment of tax liability including that in first and second month of the quarter shall attract interest liability.
8. Lower compliance cost: The benefit of this simplification would be that the compliance cost for small taxpayers would come down as payment declaration form is not a return and minor errors in the same would not lead to initiation of any legal action.
9. HSN: HSN wise details would need to be provided at 4 digit level or more in the quarterly return.
10. Pending and missing invoices: Small businesses have only a few supplies to receive and therefore they track their purchases well and may not need credit on missing invoices. As the inventory size of these businesses is small they also do not need to keep invoices pending and generally avail credit forthwith. Therefore quarterly return shall not have the compliance requirement of missing and pending invoices as small businesses do not use these procedures in their inventory management.
ICAI submits 19 Suggestions on “CBIC’s Draft Simplified Formats/ Forms of GST Returns”
The ICAI has submitted 19 Suggestions to CBIC on ‘Draft Simplified Formats/ Forms of GST Returns’, for consideration while reviewing and finalising the formats of simplified GST returns, as recommended by the GST Council:
Key features of Monthly Return
1. Turnover figure to identify the type of taxpayer not be auto populated;
2. Term “Turnover” is not defined to identify small taxpayer;
3. Uploading date of invoices be considered instead of reflected date on the portal;
4. Online reporting mechanism to report situations where wrong credit claimed /credit note not accepted by recipient;
5. Need to provide 4 digit HSN is contrary to Notification no. 12/2017 (CT);
6. Pending invoice an exclusive definition;
7. Higher late fee not be imposed;
8. Supply side control on newly registered persons;
Key features of Quarterly Return
9. Options of pending and missing invoices is not available in quarterly return;
10. Multiple reporting of same invoice tax rate wise in Annexure of Supplies to main Return;
11. HSN wise summary in Annexure of Supplies to main Return;
GSTR Monthly Return
12. ‘Non-GST supply’ is nowhere defined;
13. Supplies uploaded by supplier on which credit already allowed be auto populated;
14. Non-reporting of inward supplies on which tax paid under RCM;
15. Missing Tax Invoice for monthly period;
16. Filing of Nil return by SMS;
17. Negative Liability Refund Facility, Refund of Erroneous excess Cash Payment of taxes;
18. Uploaded invoice as only condition for availing ITC; and
19. Other suggestions (on E-Signing of return, Cash ledger, etc.)