Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) organization to hold a special filing demonstration session for new return framework. This activity is expected to get the input before the new documenting system becomes effective from April 1, 2020.
As per the law it is mandatory to file return either on monthly or quarterly basis, based on their turnover.
The Finance Minister met tax assesses in five group to discuss and find ways to further simplify GST forms and make the existing filling process (GSTR 1, GSTR 3B, GSTR 9, GSTR 9c etc) more user friendly. Five bodies demonstrated in real time before the Finance Minister and Senior GST and GSTN officials, the various issues encountered during filling GST forms.
However, there are issues related to certain entries where some amendments have been made, issue of credit note or debit note, matching of input tax credit (ITC) for buyer filing monthly return and seller filing quarterly return and demand to produce physical invoice by tax officials even details mentioned in GST Return Form 2A. There was also a suggestion to further ease co-relation of various forms.
The activities would assist organizations with getting ITC benefits with no problems.
70.22 per cent of the assessees, having an annual turnover of less than ?5 crore and engaged in B2C (business to consumer), B2B (business to business) as well as reverse charge mechanism-based supply activities can opt for quarterly filing of return. This form is called ‘SUGAM’ (RET-3). This is according to the turnover-wise distribution based on GSTR 3B (existing return form) filed during 2018-19.
About 28 per cent of the assessees, with an annual turnover of less than ?5 crore and are engaged in B2C as well as reverse charge-based supply activities. They can opt for ‘SAHAJ’ form (RET-2). All other assessees (engaged in foreign trade or SEZ-based activities) will have to file RET-1. They will be required to file the returns on a quarterly basis but payment of tax dues on monthly basis through a form called PMT-08.
Over 7 per cent assessees with annual turnover of more than ?5 crore. They will have to file the return on a monthly basis through RET-1. These assessees are a small in number, but in terms of overall tax payment they contribute nearly 85 per cent. Under the new system, these assessees will have to file their returns by the 20th of the next month, which means a majority of the collection will be with the Government by that date. For other assessees, the filing date is the 25th of next month.
Under the present framework, one can display two unique figures in GSTR 1 (showing liability) and GSTR 3 B (showing tax payment) as they are not linked automatically. Thus, one could show higher liability,claim higher input tax credit and pay less tax. In any case, this will be not be possible under new system.Through the RET-1/2/3, the taxpayer pays the auto-populated risk (from ANX-1) by using money and ITC (auto-populated through ANX-2) both. Additionally, only the creator of the form will be able to amend the details.