Compliance of Indirect Tax Returns made easy!

Compliance of Indirect Tax Returns made easy!

This time by Government!!

We all know that government has put enormous efforts in bringing us the compatible GST Systems in order to encourage the habit of compliance and simplify the existing compliance complications. In its first step, it brought an exhaustive reporting system of uploading the invoices where the intension is to digitalise the document process and create an evidence for tax authorities. They intend to but failed in bringing the system of uploading invoices by supplier and accepting the same by recipient of supplies where the input credit will be transferred with authorization and under surveillance. At present, the system is functioning at half of their idea of implementation, whereby the acceptance of recipient is not in operation. Simultaneously, to address issues raised by various stakeholders on the current working model of returns, they have been stating in recent past council meetings and now the proposed model of returns is in front of us to adapt to it. Let us have a brief look on it.

Two options available based on Periodicity: Monthly (or) Quarterly

Monthly: One type of Return i.e. "GST RET - 1"
Quarterly: Three types of Returns.

1. Normal i.e. "GST RET - 1"
2. Sahaj  i.e. "GST RET - 2" and
3. Sugam i.e. "GST RET - 3"

A key point to be noted is the above specified returns are similar to existing GSTR 3B. The nomenclature of GSTR 1 and GSTR 2 will be modified to GST ANX – 1 and GST ANX – 2 and are going to be just forms removing the procedure to file these returns. On filing of the applicable GST RET 1/2/3, it is deemed that the GST ANX – 1 and 2 are filed.

Which one to file?

Turnover during preceding financial year more than Rs 5 Crores? - Monthly option (in default).
Turnover less than Rs 5 Crores? - Option available to choose Monthly (or) Quarterly.

If you have chosen quarterly option, you will have a choice to opt Sahaj, Sugam or Normal.

Sahaj can be opted only if you have

1. outward supplies under B2C category and
2. inward supplies including supplies attracting reverse charge only.

Sugam can be opted only if you have

1. outward supplies under B2B & B2C categories and
2. inward supplies including supplies attracting reverse charge only.

It is to be noted that the above two options block reporting of

1. Exports, Supplies to SEZ units and deemed exports in case of outward supplies.
2. Imports, claim of ISD credits and provisional claim of inputs not uploaded by suppliers in case of inward supplies.

Hence taxpayers who opted Sahaj (or) Sugam cannot claim input credit on missing invoices.

Normal returns allow reporting of all types of inward and outward supplies.

Nil rated, exempted and Non-GST supplies needn’t be declared in any type of returns.

When to opt?

Unless you opt for quarterly option, the return will be in monthly option.

For newly registered taxpayers, can opt for any one option.

Switching between Monthly and Quarterly option: Once an option is selected, it can be changed only in the next financial year before filing first return of that year.

Switching from Normal to Sugam (or) Sahaj (under Quarterly option): Only once in a financial year at the beginning of any quarter.

Switching from Sugam to Sahaj (under Quarterly option): Switching option available only once in a financial year at the beginning of any quarter.

Switching from Sugam to Normal (under Quarterly option): Switching option available more than once in a financial year at the beginning of any quarter.

Switching from Sahaj to Sugam (or) Normal (under Quarterly option): Switching option available more than once in a financial year at the beginning of any quarter.

While opting for any type of return, a questionnaire needs to be answered. Hence taxpayers need to answer the questionnaire carefully in order to comply with returns procedure in line with their businesses.