GST Return Filing Process Is Set To Get A Makeover

New return filing process under GST is on its way. Is it any simpler?

(. Photographer: Gabby Jones/Bloomberg)
(. Photographer: Gabby Jones/Bloomberg)

In the first year of the implementation of the Goods and Services Tax, one of the key issues that affected taxpayers and had kept the GST Council undecided was the return filing formats and process. After much deliberation, the Council had approved the return filing framework last month and the formats were released for stakeholder consultation. The government has called the new process ‘sahaj’ and ‘sugam’, meaning easy and simple.

Chirag Mehta, member of the Bombay Chartered Accountants’ Society, explained the proposed return filing requirements on BloombergQuint’s weekly law and policy show, The Fineprint.

Highlights Of Proposed Return Filing Process

  • Taxpayers with a turnover threshold of up to Rs 5 crores can file a quarterly return but the taxes will have to be paid monthly. Forms sugam — for B2B and B2C supplies — and sahaj — for B2B supplies — have been proposed for this category.
  • Taxpayers above this threshold will have to file a monthly return. The due date for the same will be the 20th of the next month.
  • Suppliers can upload invoices anytime during the month and this would be visible to the buyers.
  • Based on the uploaded invoices, buyers will be able to claim input tax credit.
  • Buyers will be able to claim input tax credit for those invoices that are uploaded till the 10th of that month.
  • Taxpayers will be able to file an amendment return twice for any tax period.

Once the new process gets notified, there will be a six-month transition phase during which buyers would be able to avail input tax credit on a self-declaration basis. Even if the supplier hasn’t uploaded all the invoices, buyers will be able to claim credit using ‘ITC for missing invoices’ facility.

The new process will have a unidirectional document flow, Mehta said. This is conceptually different from the earlier process where the seller was supposed to upload all the invoices and the buyer had to upload the purchase details, he said.

“Previously, the supplier would get missing invoices or incorrect invoices as a statement and this ended up being a month-long process,” Mehta said, adding, “Under the proposed scheme, the document flow will be from the supplier to the buyer.”

The buyer’s role is to keep an eye on missing and incorrect invoices and prompting the supplier to rectify them. Effectively, there’s no matching but a continuous monitoring by the buyer.
Chirag Mehta, Member, Bombay Chartered Accountants’ Society

The buyer’s input tax credit statement will be auto-drafted from what the supplier uploads, he said. “Uploading the invoices on a continuous basis and monitoring them to avail credit will throw up operational challenges.”

For more on information the monthly return, amendment return and input tax credit annexure, watch the accompanying video