Simplified GST Returns

Learn how the simplified GST return works

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Simplified GST returns

In an effort to simplify the filing process and increase tax compliance, the GST Council has approved a new return filing process. This filing process is expected to come into effect in six months. Here’s what you need to know about the new simplified GST returns.

Simplified Returns For Registered Taxpayers

  • All GST registered taxpayers except ISD providers, small taxpayers, composition dealers are expected to file one monthly returns.
  • The return will have two tables; one for reporting outward supplies and the other for availing input tax credit based on the invoices that the supplier uploads.
  • The taxpayer can create a profile according to the nature of supplies made and received. The fields that the taxpayer would need to fill in would be displayed according to the nature of his profile.
  • The date of filing will depend on the business’ turnover, in order to ease the load on the IT system.
  • Nil return filers or taxpayers who have made no purchase or sale will be able to file returns by sending an SMS.

Simplified Returns For Composition Dealers

  • Composition dealers and dealers who have zero transactions can file quarterly returns.

Simplified Returns For Small Taxpayers

  • Small taxpayers who have an annual turnover less than Rs.5 Crores have the option to do quarterly filing. This option will be available to small traders who make B2C or B2B and B2C supplies. The quarterly return will be similar to the main return with monthly payment facility.
  • The simplified returns for small taxpayers is called Sahaj and Sugam. This return will require fewer details than the regular return.

Uploading Invoices

  • The seller can upload invoices at any time of the month in order to allow the buyer to avail input tax credit.
  • The buyer can view and lock the invoices as and when the seller uploads them.
  • The buyer is not required to upload their purchase invoice.
  • Sellers who have defaulted on tax payments above a certain amount will be prevented from uploading invoices to avail input tax credit.

Invoicing for B2B Dealers

  • If you are a B2B dealer, you are required to fill out invoice-wise details of your supply while filing. Based on these and the invoices uploaded by your seller, the system will calculated your tax liability automatically.
  • Invoices related to B2B transactions need to have a 4-digit or higher HSN number.

Process of Tax Recovery

  • In cases where the seller has not paid their tax due, the buyer’s input tax credit will not be reversed automatically.
  • In exceptional cases like a missing dealer, closure of a supplier’s business, or suppliers having inadequate assets, the revenue tax authority will decide whether to reverse the buyer’s credits or not.

Information in the Return

  • The recovery or reversal of input tax credit will be done after the tax authority issues a notice and order. The entire process will be automated and handled online.

How will the transition to the simplified filing work?

The transition will be done in three stages:

Stage I

In this stage, there will be no change in the current filing system. The filing of GSTR3B and GSTR1 will continue. GSTR2 and GSTR3 will remain suspended. This stage will last until the new filing software is ready to use, which is expected to occur in six months.

Stage II

When the new filing system is ready, it will allow you to upload invoice-wise data and also claim input tax credit on a self-declaration basis similar to the current GSTR3B filing process. During this stage, you will be able to see the credits available to you based on the invoices that your sellers have uploaded and the provisional credits that you can claim. This stage will last for six months to allow everyone to adjust to the new system.

Stage III

Six months after Stage II begins, provisional credit will end. The input tax credit that you can avail will then be limited to the invoices uploaded by your sellers.