GST Return filing formats

This week, government released new GST Return filing formats.

Key highlights

– Taxpayers with turnover less than Rs 5 crores are Small Taxpayers (based on turnover of FY 2017-18)

– Small taxpayers to pay taxes monthly via a single page GST PMT Form and file returns quarterly.

– Small taxpayers to file one of these – SUGAM, SAHAJ or QUARTERLY RETURN; Sugam is for B2C suppliers, Sahaj is for B2B suppliers

– Quarterly Return is for all types of supplies – including B2C, B2B, Exports, SEZ etc.

– Supplier can upload invoices anytime and such uploaded invoices shall be continuously visible. To the Recipient/Buyer Only uploaded invoices will be a valid document for availing Input tax credit

– Invoices uploaded by supplier at 10th of the succeeding month shall be auto populated. In the ‘Liability Table’ of the return of the Supplier it is being uploaded.

– Recipient to claim credit based on invoices uploaded by Supplier

– Taxpayers with turnover of less than Rs 5 crore are likely to benefit from filing fewer returns, about 5 returns in a year. Besides, ineligible ITC is only required to be reported in Annual Return. This will reduce the effort of small taxpayers.

However, ITC can only be claimed basis invoice uploaded and it is essential buyer and supplier are able to properly reconcile invoices, as claiming and providing ITC is essential to smooth running of business and can have an impact on working capital needs.

In the transition phase of six months, after the new system of return is implemented, the recipient can avail ITC on ‘Self Declaration’ basis even on the invoices NOT uploaded by the supplier by 10th of the next month. This will be a critical phase to test and understand reconciliation. While the government has made efforts to reduce compliance and reporting efforts by reducing the number of tax returns to be filed – taxpayers will have to continue to match and reconcile to make sure they are able to claim, as well as offer credit seamlessly.