Draft GST Simplified Returns & Key Features

The GST Council in its 28^th GST Council Meeting held on July 21, 2018 under the Chairmanship of Shri Piyush Goyal, Union Minister for Railways, Coal, Finance & Corporate Affairs has approved the new return formats. The Council had earlier approved the basic principles of GST return design and directed the law committee to finalize the return formats and changes in law.

In pursuance thereof, the CBIC has placed Note on draft GST simplified returns and return formats in public domain on July 30, 2018 for perusal and feedback of stakeholders.

Some of the key features of the monthly returns have been summarized as under:

Monthly returns and due-dates: Monthly return shall be filed by all taxpayers excluding some exceptions (like small taxpayers, composition dealer etc.) and return filing dates shall be staggered based on turnover of taxpayer reported in last year i.e 2017-18, annualised for the full year. Further, the due date for filing monthly return shall be 20^th of next month;

Continuous uploading of invoices: There will be facility for continuous uploading of outward supply invoices by suppliers. On the basis of the same, outward liability shall be auto-populated in the main return of the supplier. After the due date for the filing of return is over, the recipient shall also be able to see the return filing status of the supplier and thus be aware whether the tax liability on purchases made by him has been discharged by the supplier or not. Post 11^th of succeeding month, recipient shall be able to view these invoices uploaded by supplier and perform the following actions:

• • Locking of invoices: A mechanism for locking of invoices shall be introduced where in the invoices uploaded by the supplier is accepted by the recipient. Further, the invoices which are not rejected or not kept pending by the recipient shall be deemed locked. Wrongly locked invoice can be unlocked by recipient subject to ITC reversal and online confirmation for the same.
  • Rejection of invoices Wherein GSTIN has been wrongly filled by suppliers, recipient to report these invoices as rejected
  • Pending invoices: Invoices uploaded by supplier may be kept pending for following reasons:
    • Supply has not been received by the recipient;
    • Recipient is of the view that invoice needs to be amended;
    • Recipient is unable to decide whether to take ITC for the time being;

ITC availment: During first 6 month of implementation of new return system, recipient will be able to avail credit on self-assessment basis. Post that recipient will be eligible to take credit only against invoices uploaded by the supplier upto 10^th of the succeeding month. Invoices uploaded post 11^th of succeeding month by supplier shall be available to the recipient in the succeeding month for credit purposes. For example, if an invoice pertaining to the month of April 2018 is uploaded by the supplier by 10^th May 2018, then the recipient would be eligible to take ITC in the month of April itself provided goods or services have been received by the recipient before filing of a return. However, in case the invoice was uploaded by supplier on 12^th May 2018, the recipient would be eligible to take credit in the month of May 2018.

Self-admitted liability: Cases where no return is filed after uploading of the invoices by the supplier, it shall be treated as self-admitted liability by the supplier and recovery proceedings shall be initiated against him post allowing reasonable time for filing of the return and payment of tax.

Recovery of input tax credit: There shall not be any automatic reversal of input tax credit at the recipient s end where tax has not been paid by the supplier. In case of default in payment of tax by the supplier, recovery shall be first made from the supplier and in some exceptional circumstances like missing taxpayer, closure of business by the supplier or supplier not having adequate assets or in cases of connivance between recipient and the supplier, etc. recovery of input tax credit from the recipient shall be made through a due process of service of notice and issue of order.

ITC in case of Imports: The recipient shall be eligible to take ITC on imports or supplies from SEZ on the basis of self-declaration till the time data starts flowing from ICEGATE or SEZ online.

Unidirectional flow of documents: Input tax credit shall be available to the recipient only on the basis of invoices uploaded by the supplier. In case the ITC is taken against an invoice which has not been uploaded by the supplier (i.e. missing invoices), the credit shall be recovered from the recipient.

Missing invoice reporting: Basis the information uploaded by the recipient regarding missing invoices, the supplier shall be updated for such transactions. Missing invoices to be reported by supplier for any tax period by return filing date of next two tax periods along with applicable interest/ penalty. Taxpayers filing quarterly returns shall report missing invoices in the next quarter

Amendment of invoices/ missing invoices: Amendment of invoices can be done by the supplier till the time an invoice is not locked in the system and ITC has not been claimed. In case the invoice is locked in the system, the change can be incorporated using a credit note/debit note. Further, amendment of missing invoices reported by supplier at later stage shall be carried out through amendment return of relevant tax period to which the invoice pertains.

Return Format: Main return format shall have two main tables, one for reporting outward supplies and the other for availing input tax credit. Details relating to shipping bill against exports can be filled either at the time of filling of return or after that at supplier s option.

Brief instructions to Annexure of supplies to main return :

• • Reverse charge supplies will be reported only by recipient and not by supplier. Such supplies shall be reported GSTIN wise (wherever applicable) and net of credit and debit notes.
  • HSN code shall be reported by all taxpayers at least at four digit level for goods and atleast six digit level for services. Further, the table for reporting supplies with the tax liability at various tax rates shall not capture HSN but would continue to capture supplies at different tax rates as is the present practice. The details of HSN for inward supplies and outward supplies shall be captured in a separate summary table in the regular monthly return.
  • Invoices of any preceding period not uploaded earlier can also be uploaded during the current month. The liability on such invoices will be paid during the current month but these invoices will be clubbed with the respective tax period(s) after filing of return of the current month.
  • Tax amount shall be computed by system based on taxable value and tax rate. The tax amount so computed will not be editable except in case of credit/ debit notes issued.

Amendment of Returns: In order to overcome the human error in the GST returns, a new facility shall be introduced to file two amendment returns for each tax period within the time period specified in Section 39(9) of CGST Act. Further, tax payer would be allowed to make payment of amended tax liability along with the amendment return. This would save the interest liability of the tax payers. In case of negative liability same can be carried forward in regular return of next tax period.

Higher late fee for amendment return: A higher late fees shall be attracted in case where the change in liability is more than 10% through the amendment return.

Monthly Accounting: The tax payers and tax officers shall have an access to the single screen to view the following for a tax period:

• • All reported liabilities
  • Liabilities from missing invoices
  • Liabilities as per amendment return

Transmission of data to ICEGATE: Shipping bill data on exports to be transmitted to ICEGATE. Subsequent amendment (if any) to be carried out through a separate facility on common portal and not through amendment return

Reporting of ineligible ITC: Recipient would be required to report the details pertaining to ITC on ineligible inputs, which have been kept as pending/rejected, separately in the Annual return

Quarterly Returns

• • Taxpayers having turnover up to INR 5 Cr. in the last financial year shall be considered small taxpayers. These small taxpayers shall have option of filing quarterly return with monthly payment of taxes on self-declaration basis. Such option to file monthly or quarterly return shall be taken at the beginning of the year. Such option can be changed only once during the year and that too at the beginning of any quarter;
  • Small taxpayers shall have the option to file one of the three forms – Quarterly return, Sahaj or Sugam;
  • Sahaj is for only B2C outward supplies and Sugam is where both B2B and B2C outward supplies are present;
  • These are similar to the monthly returns except the fact that there would not be any compliance in relation to missing and pending invoices , non GST supplies , exempt or nil rated supplies and the details of ITC on capital goods ;
  • However, above information will be required to be furnished in annual return;
  • Liability shall be paid on monthly basis thereby providing the payment declaration form wherein liability and ITC shall be declared on self-assessed basis;
  • Small tax payers would also be given a facility to continuously upload invoices in normal course, so that the registered recipient could avail the ITC on the procurements made from such small taxpayers
  • Option to create profile in quarterly return shall also be available

Concept of Suspension of registration would be introduced. Return would not be required to be filed and invoice uploading shall not be allowed for the period between date of suspension and date of cancellation of registration

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