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Transition Plan to the New GST Return by the Ministry of Finance

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As per the decision taken on 20 September 2019 at the 37th GST Council Meeting, the implementation of the new GST return system for all taxpayers and for all forms stands deferred to April 2020.

 

The New GST Return System has been launched on a trial basis from July 2019 onwards, with the full-fledged system proposed to be put in place from April 2020. 

Overview of the New GST Return system

Under the New GST Return System, there is one main return proposed, called FORM GST RET-1, which will contain details of all supplies made, input tax credit availed, and payment of taxes, along with interest, if any. This return will have two annexures called FORM GST ANX-1 and FORM GST ANX-2. FORM GST ANX-1 (Annexure of Supplies) will have details of all outward supplies, inward supplies that are liable to reverse charge, and import of goods and services, that needs to be reported invoice-wise (except B2C supplies) on a real-time basis. FORM GST ANX-2 (Annexure of Inward Supplies) will contain details of all inward supplies, and will allow the recipient of supplies to take action on the auto-drafted documents uploaded by the supplier, which will be available to them on a real-time basis.

Currently, regular taxpayers are filing two returns called GSTR-1, which contains details of all outward supplies made; and GSTR-3B which is a monthly self-declaration of outward supplies, input tax credit availed and taxes paid.

What is the frequency of filing the new GST Returns?

The frequency of filing FORM GST RET-1 will be monthly, except in the case of small taxpayers (taxpayers with turnover up to Rs 5 crore in the previous FY), who can opt for the quarterly filing of returns. However, tax will need to be paid monthly in FORM GST PMT-08 by those taxpayers who have opted to file their returns quarterly.

Previous Timeline for transition to the New GST Return System

From July 2019, the new return system has been launched on a trial basis where, at present, the offline tool prototype GST ANX-1 is available for suppliers to upload invoices, and for the recipient of supplies to view and download the invoices of inward supply in the offline tool prototype GST ANX-2. This contains a specimen of the screen which will be made available once the actual offline tool gets launched on the GST Portal.

From July to September 2019, there will be a trial period for users familiarise themselves with the annexure forms of the New Return System i.e. FORM GST ANX-1 and FORM GST ANX-2. However, during this period, all taxpayers will continue to file their GSTR-1 and GSTR-3B returns.

From October 2019, FORM GST ANX-1 will need to be compulsorily filed by large taxpayers (annual turnover more than Rs 5 Crore), and this will replace the GSTR-1 return. In the case of Small taxpayers, they will need to file FORM GST PMT-08, which is the form for the self-declaration and payment of taxes.  Large taxpayers will continue filing their GSTR-3B returns for October and November 2019. 

For the month of December 2019, Large taxpayers will need to start filing FORM GST RET-01, which is the main return of the New Return System, and this needs to be filed by the 20th of January 2020. And for the Quarter October to December 2019, Small taxpayers will file their first FORM GST ANX-1 in January 2020.

Earlier announcement of month-wise applicability of New GST Returns:

The table below simplifies the transition plan into the New Return System:

new return system transition

* only view facility

How to migrate from present to new GST returns?

It is necessary for all businesses to keep track of all the invoices from now onwards to prevent incorrect claims while transitioning to new GST returns. It will then allow a seamless transition in April 2020.

Migration while Reporting of Sales

Included in Current GST?

Included in New GST ?

Required Actions and how ClearTax will Simplify these tasks

GSTR-1

GSTR -3B

ANX-1

RET-1

 Y

Y

N

N

Case of timely filing in which Enterprise has declared all docs in current regime.
Nothing to be done.

N

N

Y

          

         Y

Delayed filing use case where Enterprise has not included docs in both 1 and 3B

ClearTax will track the invoice and remind the user to upload it in ANX-1 which will be auto-populated in RET-1. Given delayed reporting of liability, Interest will be auto-calculated for declaring in RET-1.

Y

N

N

Y

Enterprise has uploaded invoices in GSTR-1, but not included in 3B.
ClearTax reminds the user to not upload it again in ANX-1. The tool calculates the liability to be declared in Section 3A (8) of RET-1 as it was not declared in 3B. Amount of interest due to delayed payment of liability will be auto-calculated by ClearTax.

N

Y

Y

Y

Since invoices were not declared in GSTR-1, ClearTax prompts to upload in ANX-1 which will be auto-populated in RET-1. 

Since liability already paid in 3B, ClearTax avoids double-payment of liability, via an auto-populated reversal in RET-1.

Migration while Reporting of Sales

Included in Current GST?

Included in New GST ?

Required Actions and how ClearTax will Simplify these tasks

GSTR-2A

GSTR -3B

ANX-2

RET-1

 Y

Y

N

N

Case of timely filing in which Enterprise has declared all docs in current regime.
Nothing to be done.

N

N

Y

    Y

Delayed filing use case where supplier has not uploaded in 2A and Enterprise has not 

claimed ITC in 3B.
Once it shows up in ANX-2, ClearTax will file through normal New GST process.

Y

N

N

Y

Case of missed claim of ITC in old regime. Invoice already present in GSTR-2A so will not show up in ANX-2. ClearTax tool will calculate and auto-populate the additional ITC to be claimed in section 4A (4) of RET-1 in the new regime.

N

Y

Y

Y

Case of missed claim of ITC in old regime. Invoice already present in GSTR-2A so will not show up in ANX-2. ClearTax tool will calculate and auto-populate the additional ITC to be claimed in section 4A (4) of RET-1 in the new regime.

To know more about the issues or challenges pertaining to the implementation of new GST returns and how the taxpayers must be geared up to face them, read our article on Issues in the New GST Return System

Here are the Advantages and Disadvantages of the New Return System under GST.

View how your ANX-1 would look like as ClearTax will help you transition to new GST returns and will be your insurance against all future changes.