GST, the biggest tax reform in the country, is to undergo a major revamp in the second term of the year 2019. The year 2018 saw the approval of the new and simplified return system (27th GST council meet) and the rules for the same were laid in the 28th GST Council meet. Meanwhile, in order to simplify GST return system, form GSTR 2 and GSTR 3 were suspended for their complex structure, while form GSTR 1 and GSTR 3B were retained (only to be discontinued upon successful transition of the new GST return system)
CBIC has released their transition plan for these return forms, until then here is everything you should know about Simplified GST return forms.
Simplified Return Forms
In an attempt to simplify Taxation for Small Taxpayers, the GST council decided upon implementation of new and simplified tax returns, namely,
- Normal Return – FORM GST RET-1 (Shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices)
- Monthly Normal
- Quarterly Normal
- Sahaj Return – FORM GST RET-2 ( Quarterly)
- Sugam Return – FORM GST RET-3 ( Quarterly)
Outward supply under B2C and B2B category and inward supplies attracting reverse charge only
These tax returns are being introduced to free the small taxpayers from the hassles of taxation, thereby helping them to focus on the growth of their business.
Who are small taxpayer in GST Regime?
Business owners with an annual turnover up to Rs.5 crores are considered as Small Taxpayers.
What is the periodicity of these return forms?
The periodicity of filing return will be deemed to be monthly for all taxpayers unless quarterly filing of the return is opted for.
Can a newly registered taxpayer opt in to file Sahaj or Sugam return forms?
For a newly registered taxpayer, turnover will be considered as zero and hence he/she will have the option to file monthly, Sahaj, Sugam or Quarterly (Normal) return.
Can I change the periodicity of my return filings?
Change in the periodicity of the return filing (from quarterly to monthly and vice versa) would be allowed only once at the time of filing the first return by a taxpayer. The periodicity of the return filing will remain unchanged during the next financial year unless changed before filing the first return of that year.
- Taxpayers filing return as Quarterly (Normal) can switch over to Sugam or Sahaj return only once in a financial year at the beginning of any quarter.
- Taxpayers filing return as Sugam can switch over to Sahaj return only once in a financial year at the beginning of any quarter.
- Taxpayers filing return as Sahaj can switch over to Sugam or Quarterly (Normal) return more than once in a financial year at the beginning of any quarter.
Key points of SAHAJ/SUGAM return
Taxpayers opting to file quarterly return as ‘Sahaj’ shall be allowed to declare outward supply under B2C category and inward supplies attracting reverse charge only.
Taxpayers opting to file quarterly return as ‘Sugam’ shall be allowed to declare outward supply under B2C and B2B category and inward supplies attracting reverse charge only.
- Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52.
- Such tax payers shall not take credit on missing invoices and shall not be allowed to make any other type of inward or outward supplies.
- Such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in the said return.
Taxpayers opting to file monthly return or Quarterly (Normal) return shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices.
What are the advantages of the Simplified Return Forms?
- The taxpayer shall be able to upload invoices to the GST Portal 24×7.
- The recipient would be able to accept or reject the invoice in real-time.
- Filing of Nil returns can be done via SMS
- The recipient will get credit during a tax period on the basis of the details of documents uploaded by the supplier up to the 10th of the month following the month for which the return is being filed for. Such credit can be availed i.e. credited to the ledger of the recipient only on filing of his (i.e. recipient’s) return. There may be the following two scenarios:
- For monthly basis: The recipient shall be eligible to take credit in his return based on the documents uploaded by the supplier up to the 10th day of the filing, irrespective of whether the supplier files his return on the monthly or quarterly basis.
- For quarterly basis (Normal, Sahaj or Sugam): The recipient shall be eligible to take credit in his return based on the documents uploaded by the supplier up to the 10th day of the filing month, irrespective of whether the supplier files his return on monthly or quarterly basis.
It is being anticipated that these return forms shall greatly simplify the taxation system in India, reduce the tax burden from businesses and help eliminate tax evasion in the country.
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