New GST Return Filing System from Jan 2020

The government announced that a new GST return filing system will be introduced to make it easier for taxpayers. From January 2020 onwards, all taxpayers will be filing Form GST RET-01. In order to ease the transition to the new return system, a plan has been worked out while Form GSTR-3B will be completely phased out.

In May 2019, the government shared a prototype of the offline tool on the common portal to familiarize the tool to the users. The overall interface of the offline tool would be similar to that of the online portal. In a statement, the Finance Ministry said there will be three main components in the new return filing system – one main return (Form GST RET-1) and two annexures (Form GST ANX-2).

From July 2019 onwards, users would be able to upload invoices using the Form GST ANX-1 offline tool on trial basis for familiarization. In addition, under this trial program, users would also be able to view and download the inward supply of invoices using the Form GST ANX-2 offline tool. On the common portal online, the summary of inward supply invoices would also be available to view. From August 2019, users would be able to import their purchase register in the Offline Tool and verify it with the downloaded inward supply invoices to find any mismatch.

The trial run of the new return system (ANX-1 & ANX-2 only) would be available from July to September 2019 for taxpayers to make themselves familiar. This trial run would not have any impact on the tax liability or input tax credit of the taxpayer. During this period, taxpayers should continue to fulfill their compliances by filing Form GSTR-1 and Form GSTR-3B. In other words, taxpayers should file their outward supply details in Form GSTR-1 on monthly/quarterly basis and Form GSTR-3B return on a monthly basis. In the case of non-filing of these returns, you shall pay a penalty under the GST Act.

In the new GST return filing, a regular taxpayer, with a turnover of up to ₹ 5 Crores, would have to file Form GST RET-1 (Normal) or Form GST RET-2 (Sahaj) or Form GST RET-3 (Sugam) on an either monthly or quarterly basis. Small taxpayers dealing with only B2C supplies can file Sahaj returns. On the other hand, taxpayers making B2B supplies or dealing with both B2C and B2C supplies, but having a turnover of ₹ 5 Crore or less, can file Sugam returns on a quarterly basis.

From October 2019 onwards, Form GST ANX-1 will be made compulsory and will replace GSTR-1. The taxpayers whose aggregate annual turnover in the previous financial year was more than ₹ 5 Crore will need to upload their monthly Form GST ANX-1. On the other hand, the first quarterly Form GST ANX-1 uploaded by small taxpayers with an aggregate annual turnover of up to ₹ 5 Crore in the previous financial year will be due on January 2020 for the quarter October and December 2019.

Both large and small businesses can upload their invoices in Form GST ANX-1 on a continuous basis. Additionally, Form GST ANX-2 may be viewed simultaneously during this period but with no action allowed.

The large taxpayers will continue to file Form GSTR-3B for October and November 2019 on a monthly basis. For the month of December 2019, they would file their first return Form GST RET-01 by 20^th January 2020.

The small taxpayers will stop the filing of Form GSTR-3B and would begin filing Form GST PMT-08 from October 2019 onwards. For the quarter of October 2019 to December 2019, they would file their first return Form GST RET-1 by 20^th January 2020. The Finance Ministry also added that within October to December 2019, separate instructions will be issued for filing and processing of refund applications.