All you need to know about the proposed changes in the Single Return Forms under GST

A recent GST Council meeting was all about discussions on providing a more simplified set of return forms. The new layouts for GST Return Forms have now been approved by the Central Government and by the GST Council. From FY 2019 these new set of GST return forms will be applicable.

GST Return

Here are some of the key changes that will be the part of the new GST Return Forms:

  • Single, Simpler and Time Saving

Unlike the previous ones, now the new forms will be less prone to human error and also a simpler form structure comprising of at max 5 to 6 tables. 80% of the form will be auto-populated and this will include sections such as details of supply and purchase/input details. Further, the information will be auto-populated based on the invoices uploaded by the taxpayers. Moreover, most of the data will be auto fetched and dealers will be required to fill the remaining 20% details only.

  • Less Taxing

Across the country taxpayer and trader, the community has a common complaint that the tax filing procedure in itself taxing. To fill returns it required an internet connection and also a desktop or laptop system which ultimately increases the expenditures for traders and taxpayers of buying system, electricity, internet connection and maybe manpower (if needed). But not any longer now A welcome change is seen in a new return filing method through SMS and will the facility to allow taxpayers to file their GST returns through SMS will begin.

  • One Nation One Return Form

The good news is that from next FY onwards the Central Government will do away with the existing multiple returns with a single return filing. Currently, the list of mandatory return file forms under GST include the likes of GSTR-1, GSTR-3B, GSTR-2A (for reconciliation purpose), etc. All these will be replaced with one. While earlier India’s PPP makes it difficult to implement a true one nation One Tax structure, a lot of hue and cry was directed towards the excessive compliance burden the GST framework imposed on the taxpayers (especially honest taxpayers and medium to small-scale traders).

  • Amendments

Unlike the current forms, the new single form will also enable amendments. The maximum number of amendments/changes that can be made will be limited to two though. Additionally, taxpayers will also be able to report negative balance or liability.

  • Profile Based Return Filing

The new FY 2019 will also see profile-based dealer’s filing of returns. The profile could be selected based on the questionnaire filled by the dealer post which returns can be files
“upload – lock – pay” System

Experts call the new returns as a three-step procedure for easy hassle free cost effective return filing. These include:

  • Invoice Uploading by Suppliers (Provide return details)
  • Approval/Acceptance by Recipients of goods or service.
  • GST Payment post return locks by Recipients

sugam sahaj gst return filing

The GST will also make room for new provisions like the Sahaj and Sugam schemes for dealer along with new return forms. Currently, dealers with an annual turnover of fewer than 5 crores file quarterly returns and such dealers can either continue with quarterly returns or they can opt for a simpler two return system which is Sahaj return and another one is Sugam return.

Sajah return is for B2C suppliers. With less number of fields and easy to file it has become much simpler. It will be filed monthly. For those who are involved in both B2B and B2C supplies, they can opt for Sugam. Rest of the process is the same. The Sajah and Sugam are only available to dealers with less than 5 crore turnover.

Key outcomes of the 28th GST Council Meeting

Held on 21st July 2018, the all-powerful 28th GST Council Meeting was headed by the Hon’bleUnion Finance Minister Mr.PiyushGoyalwith an agenda:

  • To review the rates on the basis of representation made by the Industries and Trade Enterprises
  • To simplify the GST return filing
  • Discuss bringing-on the Aviation Turbine Fuel and natural gas under GST net

There have been many other GST council meets, but this one was in particular important because of the GST slab rate adjustments and few other compliance-related issues which will be on the cards during the discussion. Few other points why this meeting was important was because of the discussion on:

  • To reduce tax rates on close to 30 items and simplify return forms
  • To simplify compliance-related norms
  • To discuss the three-bench National GST Appellate Tribunal
  • To discuss the key issues on the e-way bill and reverse the charge mechanism
  • To talk over the sugar cess issue

GST Council

Key takeaways from the meeting:

Items that come under GST exemption

Milk
Sanitary Pads
Raw materials used in brooms
Commemorative coins circulated by the government
Saal leaves
Deities made of marble, stone, or wood

Items under 12% to 5% GST rates

Fertilizer grade phosphoric acid
Handloom Dari

Items under 18% to 5% GST rates

Footwear below 1000 INR

Items under 28% to 18% GST rates

  • Lithium-ion batteries, Bamboo Flooring, Paint, Varnishes, Putty, wooden frames for painting, photographs, mirrors
  • Food grinders, juicer, mixers, Vaccum cleaners
  • Perfumes, Cosmetics, Scents
  • Shaver’s, Hair Clippers, Hand Dryers, Toilet Spray, Hair Curlers
  • Trailers, Special Purpose Vehicle, Work Truck, Concrete Mixer
  • Storage water heaters, Watercooler, Ice cream freezer, Electric smoothing irons, Refrigerators, Washing Machines, TV (up to 68 cm i.e. 27 inches)

Certain transactions to be treated as no supply

The following transactions to be treated as no supply (no tax payable) under Schedule III:

  • Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;
  • Supply of warehoused goods to any person before clearance for home consumption;
  • Supply of goods in case of high sea sales.

Issuing credit/debit notes

Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a financial year.

j) The cap on the amount payable for filing the appeal

Reversal of ITC

In case the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but the liability to pay interest is being done away with.

These recommendations will now be placed before the Parliament and the legislature of State and Union territories for approval and amending relevant GST Acts.

The new model proposes uploading of invoices by the supplier before 10th of next month that shall be subsequently posted in the viewing facility of the buyer by 12th of next month, who will then lock those invoices. The new returns filing model proposes single monthly return for all taxpayers except composition dealers, TDS/TCS and staggered return filing dates based on the turnover of the registered person.

Other major changes:

  • Simpler GST return filings
  • For almost 93% traders or SME’s with up to 5 crore turnover – fillings would be quarterly instead of monthly. However, tax payment would be monthly
  • Exemption limit of 10 Lac increased to 10 Lac for traders in – Sikkim, Assam, Himachal Pradesh and Arunachal Pradesh
  • Also, taxpayers who still haven’t registered under GST will be given an extension up till 31st August 2018 and any late penalty would be waived off.
  • Input credit for fabric allowed in the textile industry
  • Relief for hotel industry as the 28% GST would not apply on tariffs less than Rs. 7,500 even though the printed rates are more.

27th GST Council Meeting Updates Highlights

On 4th May 2018, Goods and Service Tax Council (GST Council) in its 27th GST Council Meeting finally approved the filling of new return based on the recommendations of the Group of Ministers on IT. Along with that it also announced a few rate changes and some structural changes in the shareholding pattern on the GSTN.

27th GST Council Meeting Latest GST Updates

The key feature of new return is as under:

  • Periodicity: Under the new regime, a single return will be filed by every taxpayer, except few like composition dealer, on monthly basis unlike multiple returns filing under the existing system. Due date of return filing will depend upon turnover. A dealer with nil transaction may file a quarterly return.
  • Under the new system, uploading of invoices will be unidirectional by the seller. Seller may upload such invoice at any time during the month and such invoice will be available to the buyer on a real-time basis. Buyer will not be required to upload purchase invoices separately. HSN of 4 digits or more will be required on all B2B invoices to achieve uniformity.
  • Simplified return: The system will automatically compute GST liability based on the uploaded sales details and it will also automatically calculate Input tax credit based on sales invoice uploaded by the supplier.
  • To control misuse of Input Tax credit, person defaulted in payment of GST will not be allowed to upload sales invoice and accordingly, no credit will be available to the buyer on purchases made from such supplier.

Transition to new GST return will be in 3 stages:

Stage-1: will be the present system of filing of GSTR-1 and GSTR 3B. GSTR-2 and GSTR-3 will continue to suspend. This stage will continue for not more than 6 months.

Stage-2: The new return will have an invoice wise sales uploading facility will be available; however, input tax credit will be available on a self-declaration basis. This phase will continue for next 6 months.

Stage-3: In this stage, credit will be automatically computed by the system based on invoices uploaded by the supplier and window for provisional credit will close.

Rates:

  • Sugar Cess implementation has been postponed. The government believes that for the benefit of the farmers there should be a better way to increase revenue.
  • Duties on Ethanol – Reduction in rate suggested.
  • A group of ministers is expected to work on above two mentioned points and make recommendations within two weeks.

De-Privatization of GST

With the government acquiring the remaining 51% equity currently held by the Non-Governmental Institutions so now the GSTN is a government-owned company. In future, the Central Government will hold 50% and State Governments the balance 50% of the stakeholding.

There is a scope for better employment as GSTN looks forward to recruiting more people

Incentives on digital payments

Incentives here may need more time to come in force. For the next council meet, A 5 member council will work. The cap of the incentive will be Rs. 100 per transaction and the proposal is to give a concession of 2% on GST rates that are more than 3% on B2C supplies.

Other points:

  • Real Estate/transfer of property will be included in the GST regime
  • Amendment of the ITC provision in the GST which will enable any business to take credit on any business-related expenses (employee transport etc.)
  • Exemptions for payments made by employees for the services received from the employers (e.g.: canteen services)
  • Some clarity is expected from the council which will be based on various adjudications on anti-profiteering norms under GST
  • Digital transactions will be increased by providing cash-backs, discounts, credits etc.

In short, the 27th GST Council meeting was a major game changer, as far as the simplified return filing process is concerned. Given the various initiatives discussed, proposed and finalized at the meeting, life for the business is surely bound to become simpler as far as GST compliance is concerned.

All You Want To Know About Reverse Charge under GST

GST Reverse Charge Mechanism is basically the GST which is to be paid and deposited with the Government by the recipient of goods and services and not by the supplier of Goods and services.

It is applicable on reverse charge basis for certain transactions specified by the government which means it is not applicable under normal circumstances.

What the things required under the Reverse Charge Mechanism

  • The recipient of goods/services must be registered under GST.
  • Every registered business owner should maintain accurate records of supplies that would incur the reverse charge.
  • The supplier should clearly state the invoice that the tax payable for that specific transaction is through the reverse charge. Similarly, the same should be mentioned on receipt vouchers and refunds vouchers.
  • Advance paid on supplies that incur a reverse charge is taxable under GST. The taxpayer making advance payment should pay tax on a reverse charge basis

GST Reverse Charge

Time of Supply for Reverse Charge under GST

It is very important to ascertain the time of supply as GST would be required to be deposited with the Government within 20 days from the end of the month in which the services were provided.

Time of supply in case of supply of Goods

In this, a transaction is a date on which taxes are levied upon the supplies. The time of supply would be the earliest of the following

  • Date of receipt of goods or
  • Date of payment or
  • The date straight away after 30 days from the invoice date for goods and 60 days from the invoice date for services.

Note: If none of the above applies, then it can also be the date of entry in the books of the receiver.

Example:

Suppose the time of supply in the below-mentioned case of supply of goods:

  1. Date of Receipt of Goods: 12th Oct.
  2. Date of Payment: 15th Dec.
  3. Date of Invoice: 1st Nov
  4. Date of entry in Books: 16th Oct.

Solution: the time of supply of goods, in this case, will be 12th Oct

Time of supply in case of supply of services

In case of a Reverse charge, the time of supply would be the earliest for the below mentioned:

  1. The date of payment or
  2. The date immediately after 60 days from the date of issue on the invoice by the supplier

Note: If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.

Example:

  1. Date of payment 10th Aug
  2. Date of invoice 1st June
  3. Date of entry in books of receiver 13th Aug

The Time of supply of service, in this case, will be 1st June will be considered.

An automated tool can accelerate the government’s ability to track transactions while making survival for some small businesses easy by eliminating the cost of doing business.

Latest GST Rule Updates: What Got Changed?

The nationwide goods and service tax (GST) has taken another turn in the past week. On 18th January 2018, the latest update to GST brought in an array of changes for businesses and consumers alike. The tax slabs have been revisited, along with the much-anticipated e-way bill introduction. If you are confused about the changes, read on for a clear understanding of the new updates!

GST Update 8th Jan

The primary revisions to the tax slabs are under the 5%, 12% and 18%. The updated list is as follows:

New heads under 5%:

LPG supply, all restaurants, restaurants of hotels under tariff of 7,500 INR, food parcels, transport services, tailoring services, scientific and technical instruments

New heads under 12%:

Drinking water (20l), bio-diesel, biopesticides, drip irrigation system, state-run lotteries, non-AC hotels, business class air ticket, fertilisers and work contracts

New heads under 18%:

Second-hand medium and large cars, bio-fuel powered buses, admission to theme parks, restaurants in hotels with tariff of 7,500 INR or more, telecom and IT services, branded garments and financial services, and outdoor catering

The other major updates has been the introduction of the new nationwide e-way bill system for interstate goods movement. From 1st February, 2018, interstate goods transport worth more than 50,000 INR will need to be secured by the seller through online registration. The transporter shall be required to carry a copy of the e-way bill thus generated as a proof of sale.

The positive features of the e-way bill are that these only need to be verified once, and shall be created in standard formats across all states. A seller can also issue bulk e-way bills for multiple consignments, an issue which formed much difficulty earlier. However, what many people are considering a downside is that the recipient’s acceptance is required on the e-way bill within 72 hours, making long-standing consignments an impossibility.
GST Knowledge Base: Refund Process Under GST

The e-way bill for interstate goods movement has already been rolled out on trial basis starting 16th January, 2018 to make the businesses transition smoothly, before it comes in effect starting February. The e-way bill system for intrastate goods movement is expected to get in place by 1st June, 2018 as well.