GST update on simplified return format

The GST Council Meeting under the Chairmanship of Shri Piyush Goyal , acting as Finance minsiter in its 28th council

meeting has provided the details on the simplified return filling process and steps to make the cumbersome process

easier. The following have been put forward in the press release issued on 21st July 2018.

1. One Monthly return

The Council has approved to file one monthly return for all taxpayers excluding small taxpayers and a few

exceptions like ISD etc. This return shall constitute of two tables.

a) One is for reporting outward supplies and

b) Other is for availing input tax credit based on invoices uploaded by the supplier.

The Press Release says that “Invoices can be uploaded continuously by the seller and can be continuously viewed

and locked by the buyer for availing input tax credit. This process would ensure that very large part of the return

is automatically filled based on the invoices uploaded by the buyer and the seller. Simply put, the process would

be “UPLOAD – LOCK – PAY” for most tax payers.”

But the process of uploading the invoices has not been elaborated that whether it would be online on real time

basis or not. If it is to be done as and when the invoice is prepared, then the supplier can take credit whenever

the same is received in his portal. But other conditions of receipt of material should also be satisfied. Suppose a

supplier from Jodhpur raises the bill on recipient of Ahmadabad and file the same online then the credit will be

reflected in the return of recipient. But as per provision of CGST Act, the credit can be taken only after receipt of

material. Hence, the option of accepting this credit should be given to recipient and if it is done then this is same

procedure as like of GSTR-2 return which has not worked earlier also.

If it is to be done in return, in same way as is being done in GSTR-1 return now, then how shall it be possible to

claim the input tax credit on monthly basis if the other person files the return on Quarterly basis. These issues

need clarification which can be better obtained when notification is issued which is expected on 27th of July

2018. The system on portal will also have vital role to play to implement this system. Let us hope for the best.

2. Quarterly return filing

The Council approved quarterly filing of return for the small taxpayers whose turnover is below Rs. 5 Cr.

Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered

persons – small traders making only B2C supply or making B2B + B2C supply.

Here the council has used the term “Small traders”. It is not clear whether this shall be applicable to the

manufacturers, service providers or not. Further it has been stated by Finance Minster in the meeting that 93 %

of the taxpayers have a turnover of Rs. 5Cr and these taxpayers would benefit from this simplification. This gives

another interpretation that the term small traders shall include manufacturers as well as service providers also.

This matter can be resolved only by way of notification only.

When the return filing is done on quarterly basis and around 93% of assessee are filing it on quarterly basis then

the same should be prescribed for all. The quarterly return was being filed by all under VAT system. When the

tax payment is done on monthly basis then the revenue of Government will not hamper. Then ease in filing of

return will relax all the assessee and Chartered accountants who are over burdened with filing of returns.

The press release states that Simplified returns have been designed, naming them as Sahaj and Sugam. In these

information required to be filled is lesser than that in the regular return. However, this return is applicable for

assessee operating under composition scheme only or otherwise. It is to be seen. The details of returns and its

format are awaited.

Further as per the decisions in the meeting, the new return design provides facility for amendment of invoice

and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment

return. Payment would be allowed to be made through the amendment return as it will help save interest

liability for the taxpayers. This is welcome step but the operation of the same is to be seen at the time of

implementation.

Taxpayers would have facility to create his profile based on nature of supplies made and received. The fields of

information which a taxpayer would be shown and would be required to fill in the return would depend on his

profile. This is also new concept and details of the same will be known only when it is implemented.

3. Nil Return by way of SMS

NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS.

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GST update on simplified return format

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