New GST re­turn mech­a­nism will be im­ple­mented in phases

Forms avail­able for trial from July to Sept; will be­come manda­tory sub­se­quently

The Hindu Business Line - - FRONT PAGE -

The Fi­nance Min­istry on Tues­day un­veiled a roadmap for the im­ple­men­ta­tion of the new GST re­turn mech­a­nism. It has also put in place a tran­si­tion mech­a­nism.

The new mech­a­nism will be used on a trial ba­sis from July to Septem­ber. For the large tax­pay­ers (those whose ag­gre­gate an­nual turnover in the pre­vi­ous fis­cal was more than ₹5 crore), Form GST ANX will re­place GSTR 1 from Oc­to­ber. Small tax­pay­ers (with ag­gre­gate an­nual turnover in the pre­vi­ous fis­cal up to ₹5 crore) who file on a quar­terly ba­sis will have to use this in Jan­uary for the Oc­to­berDe­cem­ber quar­ter.

Form GST RET-1 will re­place GSTR-3B; it will be manda­tory from Jan­uary for all tax­pay­ers.

The gov­ern­ment has re­leased the draft of a new and sim­pli­fied re­turn form with off­line tools. There are three main com­po­nents to the new re­turn process — the main re­turn form (Form GST RET-1) and two an­nex­ures (Form GST ANX-1 and Form GST ANX-2).

From July, users will be able to up­load in­voices us­ing the GST ANX-1 off­line tool on a trial ba­sis. They will also be able to view and down­load the in­ward sup­ply in­voices us­ing the GST ANX-2 off­line tool un­der the trial. The sum­mary of in­ward sup­ply in­voices will also be avail­able for view on the com­mon on­line por­tal.

Ad­di­tion­ally, from Au­gust, users can im­port their pur­chase regis­ter in the off­line tool and match it with the down­loaded in­ward sup­ply in­voices to spot mis­matches.

Trial for fa­mil­iari­sa­tion

The July-Septem­ber trial is for tax­pay­ers to fa­mil­iarise them­selves with the new re­turn mech­a­nism. It will have no im­pact at the back end on the tax li­a­bil­ity or in­put tax credit of the tax­payer. In this pe­riod, tax­pay­ers will con­tinue to file ex­ist­ing re­turn forms (GSTR-1 and GSTR-3B); fail­ure to do will will at­tract penal­ties.

From Oc­to­ber, GST ANX-1 will be com­pul­sory, re­plac­ing GSTR-1. The large tax­pay­ers will up­load their monthly GST ANX-1 from Oc­to­ber. How­ever, the first com­pul­sory quar­terly GST ANX-1 to be up­loaded by small tax­pay­ers will be due only in Jan­uary 2020, for the

Some as­pects of the tran­si­tion plan re­quire clar­ity, and the forms could be made simpler still, said an­a­lysts

Oc­to­ber-De­cem­ber 2019 quar­ter.

In­voices can be up­loaded in GST ANX-1 on a con­tin­u­ous ba­sis, both by large and small tax­pay­ers, from Oc­to­ber. GST ANX-2 may be viewed si­mul­ta­ne­ously dur­ing this pe­riod but no action will be al­lowed on it.

For Oc­to­ber and Novem­ber, large tax­pay­ers will con­tinue to file GSTR-3B on a monthly ba­sis. They will file their first GST RET-01 for De­cem­ber by Jan­uary 20, 2020. Small tax­pay­ers will stop fil­ing GSTR-3B and start fil­ing GST PMT-08 from Oc­to­ber. They will file their first GST RET-01 for the quar­ter Oc­to­ber-De­cem­ber from Jan­uary 20 next year.

Need for clar­ity

Some as­pects of the tran­si­tion plan re­quire clar­ity, ob­served Ar­chit Gupta, founder & CEO of ClearTax. It’s not clear whether ITC credit will be matched with ANX-2 or GSTR-2 in the in­ter­ven­ing pe­riod be­tween July to Septem­ber, he pointed out.

Parag Me­hta, Part­ner at NA Shah As­so­ciates LLP, felt the forms are not sim­ple enough. User will have to up­load GST ANX-1 re­flect­ing their out­ward li­a­bil­ity, im­ports and in­ward sup­plies at­tract­ing re­verse charge.

“Based on GST ANX-1, filed by all, busi­nesses will be able to down­load de­tails of auto-drafted in­ward sup­plies in GST ANX-2.

“The trade will be re­quired to ac­cept, re­ject or keep in pend­ing the ITC on in­ward sup­plies. After com­ple­tion of GST ANX-2, an auto pop­u­lated re­turn in GST RET-1 will be gen­er­ated. All the ac­tiv­i­ties will have to be done on monthly ba­sis,” he said.

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