GST Council in it’s 31st meeting had proposed a new Return Scheme for tax payers whose implementation was to be done in phases and the implementation date was extended to 01-04-2020 in the 37th GST Council Meeting. This article aims at explaining What are the relevant return forms, How it is to be prepared and filed and When is the last dates for each forms.
The new return system aims at unidirectional flow of invoices through forms ANX 1 and ANX 2. ANX 1 form basically captures all the data of supplies on which tax is payable by the business including purchase/ expense liable to GST on reverse charge basis and the input eligible purchases which are not B2B GST purchase, at a single point. The main point is the provision to continuously upload B2B sale bills in ANX 1 over the month till 10th of next month as against uploading only after completion of month in GSTR 1 till now. The main advantage of the system is that continuously uploaded B2B bills can be viewed by the corresponding recipient/ purchaser on a nearly real time basis for acceptance, rejection or to keep as pending. So tension due to last minute mistakes seen in bills uploaded by seller can be avoided and bills uploaded can be corrected continuously till 10 th of next month. Thus through ANX 1 the GST liability of the business for the relevant tax period is determined and ANX 2 determines the input eligible for the relevant tax period.
A summary of the data in each table of ANX 1 and ANX 2 is auto populated to the Return GST RET 1 and few other data not having tax impact is also collected in the GST RET 1. Based on Liability on sales etc, input carried forward from previous month and input eligible for the month, net tax payable in cash is determined and paid through usual chalan and GST RET 1 is filed monthly. Also for persons having annual turnover below 5 crore an option to file GST RET 1 quarterly or to file simplified forms GST RET 2 ( SAHAJ) or GST RET 3 (SUGAM) is given subject to few conditions and restrictions. Also where a business opts for quarterly GST RET 1, 2 or 3, they have to file a simplified GST PMT 08 monthly showing Net Sales, Tax Payable, Input Eligible and Net Tax Paid in Cash which can be utilised to offset liability while filing quarterly GST RET 1.
While reviewing the ANX 2, if mistake is seen in an invoice, purchaser/ recipient can reject the invoice to sent it back to seller for amendment and the seller does necessary corrections and the invoice reappears for acceptance by receiver. Also mistakes in Tables other B2B bills of ANX 1 can be amended by filing ANX 1A for the month. Also any mistakes in other details given in GST RET 1 can be amended by filing GST RET 1A. Accordingly through the new system, government is shifting from procedure of “Correcting mistakes in current month return in Next Month returns” to “ Amending current month to correct mistakes”. Also if an invoice is not filed by seller, input of such invoice can be claimed as “ Missing Invoice Input “ subject to rule 36(4) restrictions by uploading bill details in GST RET 1 which will be updated to seller for acceptance.
|Normal (Quarterly)||Normal (Monthly)||Sahaj||Sugam|
|Applicable for individual making inward and outward supplies||Applicable for individual making inward and outward supplies||Individuals doing B2C supplies + Inward supplies (attracting RCM)||Individuals doing B2C+B2B supplies & Inward supplies (attracting RCM)|
|Credit (ITC) not allowed for missing invoice||Credit (ITC) allowed for missing invoice||Credit (ITC) not allowed for missing invoice||Credit (ITC) not allowed for missing invoice|
|Not allowed for e-commerce dealing who are deducting TCS u/s-52||Not allowed for e-commerce dealing who are deducting TCS u/s-52|
|No other types of outward/inward supplies allowed||No other types of outward/inward supplies allowed|
|Allowed for making NIL rated/exempted/non-GST supplies||Allowed for making NIL rated/exempted/non-GST supplies|
The ANX 1 and ANX 2 can be prepared either Online directly in the website or offline using Offline Utility similar to GSTR 1, GSTR 2 utility currently available. There is ANX 1 excel template to import details into utility in a single stretch and there is section wise csv files of each table to import details of only tables of our choice. An additional requirement is that for businesses with turnover above 5 crores, HSN of all items in the bills are to be added along with invoice and it is optional for turnover below 5 crores. No HSN Summary table is there unlike GSTR 1. We can continuously upload B2B sale bill details till next month 10th after which the invoices and liability is locked and we can view the input invoices for accepting till 20 th and summary details are auto populated in GST RET 1 and we can pay balance tax and file GST RET 1. There is no filing for ANX 1 or 2. The details in it are locked at the relevant due dates. The invoice rejected by recipient till 10th can be amended then and there and the tax payable will effect in that month GST RET 1. The invoices rejected after 10 th can be amended through ANX 1A. Interestingly in the existing return forms published in notification, Invoice and other document series is not being asked in return unlike GSTR 1. Also the type of return (GST RET 1, Sahaj, Sugam) option has to be chosen at the beginning of the year and changing form subsequently is subject to restrictions. Simply laying it out, we can change to a more complicated form any time in between a financial year ( eg. Shifting to Sugam from Sahaj is allowed), but we cannot opt for a simpler return in between a financial year ( eg. Shifting from GST RET 1 to Sugam is not allowed). The main problem in this scheme is if a seller does not file GST RET1 for 2 months / quarters, his customers will have to reverse the missing invoice input claimed monthly through GST RET 1.
While preparing ANX 2 offline, a json file of ANX 2 to be downloaded from GST site and opened through the Utility for accepting/ rejecting / keeping pending of the purchase invoices. Apart from this instead of GSTR 2A reconciliation being done now manually, the utility has a matching tool and a purchase register template to import purchase as per accounts and match it with bills appearing in ANX 2. There is option to fine tune the matching parameters and also bills fully and partially matched are displayed separately to enable us to correct bill details in accounts where necessary. The trial versions of GST ANX 1 is available in GST site for business to practice filing it on a test basis. The forms for ANX 2, ANX 1A, ANX 2A, GST PMT 08 and GST RET 1,2,3 are not yet fully available in GST site for businesses to practice preparing and filing of the same.
The ANX 1 form is to be uploaded by 10th of next month for monthly GST RET 1 filers and 23rd of next month for quarterly GST RET 1/2/3 filers. The ANX 2 invoice accepting should be completed and GST RET 1 filed within 20th if monthly return filing and 25th if quarterly return filing. Quarterly returns of GST RET 1,2,3 to be filed by 25th of next month following the quarter.
In the 39th GST Council Meeting held on 14-03-2020, the implementation date is further extended to October 2020 as existing returns were extended till September 2020. The opinions expressed are the personal understanding of the author and the intentions of GST department on the matter may vary. The author can be contacted at firstname.lastname@example.org
CEO, SNCO Group
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