New GST Return How to Prepare for the Change

The introduction of a new GST tax refund system aims to simplify the tax declaration system for business owners across India. The current GST returns will be changed from GSTR-1 and GSTR-3B to the new single return RET-1 / 2/3, which automatically fills in ANX-1 (for tax liability) and ANX-2 ( Used for input tax credits). The new Goods and Services Tax (GST) declaration mechanism will focus on deducting input tax based on the actual invoice uploaded by the supplier.

How to prepare for the transition to the new GST return

If the turnover exceeds Rs 50 crore, the taxpayer will need to submit a declaration form ("normal monthly") and pay the tax on a monthly basis. If the turnover is less than or equal to Rs 5 crore, the taxpayer will have the following three options:

Normal quarter

The frequency of return applications is quarterly. Tax payment needs to be done monthly. Suitable for any type of sales.

Sahaj (Sahaj): The frequency of return applications is once every quarter. Tax payment needs to be done monthly. Only applicable to B2C suppliers.

Sugam: The frequency of return applications is quarterly. Tax payment needs to be done monthly. Suitable for B2B or B2C suppliers

Switch between return types 

Taxpayers can only switch from "quarter" (normal) to "Sahaji" or "Sugam" in one fiscal year. The switch must be initiated at the beginning of each quarter. 

Taxpayers can only transfer from Sugam to Sahaj once in a financial year. The switch must be initiated at the beginning of each quarter. Taxpayers can switch from Sahaj to Quarterly (normal) or Sugam multiple times in a fiscal year. 

Changes must start at the beginning of each quarter. Taxpayers can switch from Sugam to Quarterly (normal) more than once in a financial year. Changes must start at the beginning of each quarter. 

Request a temporary ITC 

Taxpayers who choose to file their tax returns monthly or quarterly (GST RET-1) will be eligible to apply for temporary input tax credits (ITC) on lost invoices. However, the credit for missing invoices does not apply to taxpayers who choose to submit Sahaj (GST RET-2) or Sugam (GST RET-3). 

Necessary actions on the invoice 

Taxpayers need to accept, reject or retain supplier invoices as needed. The taxpayer must take appropriate action on the uploaded invoice between the 11th and the 20th of the month to request ITC.

Modify ERP system 

In order to comply with the new GST declaration form, the existing enterprise resource planning (ERP) system will need to be modified. Some modifications have been made, including (but not limited to): forks of capital goods and input services, which must include detailed information related to entry orders, forks of qualified and unqualified purchases, and a debit / credit notice Multiple invoices are associated supplier. 

Know other key changes 

Taxpayers will need an HSN code to submit detailed information at the document level (rather than a single HSN summary). Suppliers do not have to show B2B consumables responsible for the reverse charging mechanism (RCM) in GST ANX-1. However, the total number must be displayed in GST RET-1. The recipient of the consumables must declare the inward consumables responsible for RCM in GST ANX-1. 

Submit NIL Return 

If the taxpayer is responsible for the monthly return, but does not make any purchases or has no output tax liability, and ITC is unavailable in any quarter, he or she will have to declare a zero return throughout the quarter, Instead of monthly declaration forms. Taxpayers need to report zero transactions via text message in the first and second months of the quarter.