The GST Council recommended the new GST return system in its 31st meeting to simplify the GST return filing for the taxpayers. Currently, the government has come up with a prototype tool of the New Return System on the GST Portal for the taxpayers as a part of the transition plan.
This Prototype Tool does not have all the features intended to be implemented under the New Return System. However, such a tool would allow the taxpayers to get a look and feel of the New Return System.
Thus, under the New Return System, a taxpayer needs to file one main return in Form GST RET-1 along with two annexures in Form GST ANX-1 and GST ANX-2 respectively.
It is unlike the current return system where a taxpayer has to file multiple monthly returns on the due dates prescribed by the Council each month.
This article explains in detail the main return to be filed by a taxpayer in fORM GST RET-1. Let’s understand what is GST RET-1, what are its components and what are the points that a taxpayer needs to consider while filing this return.
What is GST RET-1?
Such a return needs to be filed by a normal taxpayer making B2B supplies, B2C Supplies, Zero rated supplies, inward supplies attracting reverse charge and supplies through e-commerce operators.
Further, the large taxpayers having an aggregate annual turnover of more than Rs 5 Crores are required to file this return every month. However, the small taxpayers having an aggregate annual turnover of upto Rs 5 Crores have the option to file this return either on a monthly or quarterly basis.
Furthermore, the following persons are not required to file this return on a monthly basis:
- Composition Dealer
- Input Service Distributor
- Non-Resident Registered Person
- Persons liable to deduct tax under section 51 of the CGST Act
- Persons liable to collect tax under section 52 of the CGST Act
So, GST RET-1 mainly gives details of outward supplies and ITC to be availed based on the invoices uploaded by the supplier. Further, the taxpayers need to file this return by the 20th of the month following the month for which the tax needs to be paid.
GST RET-1 Components
Under this section, the taxpayer needs to provide his Goods and Services Identification Number (GSTIN).
2. Basic Details of the Taxpayer
This section demands other basic details of the taxpayer and is auto populated based on the GSTIN number of the taxpayer. These details include:
- Legal name of the registered person
- Trade name if any
- Application Reference Number (ARN). The ARN is given in an acknowledgement issued by GSTN system portal to the taxpayers who have successfully submitted their application for registration after completing the full process.
Date of ARN
3. Summary of Outward Supplies, Inward Supplies Attracting Reverse Charge, Debit/Credit Notes and Tax Liability
|A. Details of Outward Supplies|
|1.||Taxable supplies made to consumers and unregistered persons (B2C)|
|2.||Taxable supplies made to registered persons (other than those attracting reverse charge) (B2B)|
|3.||Exports with payment of tax|
|4.||Exports without payment of tax|
|5.||Supplies to SEZ units/developers with payment of tax|
|6.||Supplies to SEZ units / developers without payment of tax|
|8.||Liabilities relating to the period prior to the introduction of current return filing system and any other liability to be paid|
|B. Details of inward supplies attracting reverse charge|
|1.||Inward supplies attracting reverse charge (net of debit / credit notes and advances paid, if any)|
|2.||Import of services (net of debit / credit notes and advances paid, if any)|
|C. Details of debit / credit notes issued, advances received / adjusted and other reduction in liabilities|
|1.||Debit notes issued (Other than those attracting reverse charge)|
|2.||Credit notes issued (Other than those attracting reverse charge)|
|3.||Advances received (net of refund vouchers and including adjustments on account of wrong reporting of advances earlier)|
|5.||Reduction in output tax liability on account of transition from composition levy to normal levy, if any or any other reduction in liability|
|D. Details of supplies having no liability|
|1.||Exempt and Nil rated supplies|
|1.||Exempt and Nil rated supplies|
|2.||Non-GST supplies (including No Supply / Schedule III supplies)|
|3.||Outward supplies attracting reverse charge (net of debit/ credit notes)|
|4.||Supply of goods by a SEZ unit / developer to DTA on a Bill of Entry|
|E. Total value and tax liability (A+B+C+D)|
4. Summary of inward supplies for claiming input tax credit (ITC)
|A. Details of ITC based on auto-population from FORM GST ANX-1, action taken in FORM GST ANX-2 and other claims|
|1.||Credit on all documents which have been rejected in FORM GST ANX-2 (net of debit /credit notes)|
|2.||Credit on all documents which have been kept pending in FORM GST ANX-2 (net of debit /credit notes)|
|3.||Credit on all documents which have been accepted (including deemed accepted) in FORM GST ANX-2 (net of debit/credit notes)|
|4.||Eligible credit (after 1st July, 2017) not availed prior to the introduction of this return but admissible as per Law (transition to new return system)|
|5.||Inward supplies attracting reverse charge (net of debit/credit notes and advances paid, if any)|
|6.||Import of services (net of debit /credit notes and advances paid, if any and excluding services received from SEZ units)|
|7.||Import of goods|
|8.||Import of goods from SEZ units / developers|
|9.||ISD Credit (net of ISD credit notes)|
|10.||Provisional input tax credit on documents not uploaded by the suppliers [net of ineligible credit]|
|11.||Upward adjustment in input tax credit due to receipt of credit notes and all other adjustments and reclaims|
|B. Details of reversals of credit|
|1.||Credit on documents which have been accepted in previous returns but rejected in current tax period (net of debit/ credit notes)|
|2.||Supplies not eligible for credit (including ISD credit) [out of net credit available in table 4A above]|
|3.||Reversal of credit in respect of supplies on which provisional credit has already been claimed in the previous tax periods but documents have been uploaded by the supplier in the current tax period (net of ineligible credit)|
|4.||Reversal of input tax credit as per law (Rule 37, 39, 42 & 43)|
|5.||Other reversals including downward adjustment of ITC on account of transition from composition levy to normal levy, If any|
|C. ITC available (net of reversals) (A- B)|
|D. ITC declared during first two months of the quarter (Only for quarterly return filers)|
|E. Net ITC available (C-D)|
|Input tax credit on capital goods (out of C)|
|Input tax credit on services (out of C)|
5. Amount of TDS and TCS credit received in electronic cash ledger
6. Interest and late fee liability details
|1.||Interest and late fee due to late filing of return (including late reporting of invoices of previous tax periods, rejection of accepted documents by the recipient) (to be computed by the system)|
|2.||Interest on account of reversal of input tax credit (to be calculated by the taxpayer)|
|3.||Interest on account of late reporting of supplies attracting reverse charge (to be calculated by the taxpayer)|
|4.||Other interest liability (to be specified) (to be calculated by the taxpayer)|
7. Payment of tax
8. Refund claimed from electronic cash ledger
Points To Remember
1. Filing of GST RET-1
GST RET-1 is the main return that is filed along with GST ANX-1 and GST ANX-2 under the New GST Return System.
Thus, a taxpayer needs to file this return once the (i) details pertaining to supplies are uploaded in GST ANX-1 and (ii) the requisite action is taken by the recipient on the uploaded invoices in GST ANX-2.
This is because the details declared in GST ANX-1 and GST ANX-2 are auto populated in GST RET-1, which is the Main Return under the New Return System.
2. Declaration of Excess Tax Collected
There can be times when the supplier may collect excess tax from the recipients. Such an amount of excess tax collected can be declared under any other liability in point 8 of Table 3A.
3. Auto Population of Details Pertaining To Rejection of Documents or Reversal of Credit
The documents of invoices that have been rejected or kept pending by the recipient in GST ANX-2 are auto-populated in Table 4A under points 1 and 2. These balances are net of debit or credit notes.
In addition to this, the amount pertaining to the ITC pertaining to the invoices that were accepted in the previous tax period but are now rejected in the current tax period is also auto-populated. Again, this balance is net of debit or credit notes and is showcased in Table 4B under point 1.
4. Credit of TDS or TCS in Electronic Cash Ledger
Thus, based on the details filed in the respective tax returns, the TDS deductors or TCS Collectors would receive credit of the tax deducted or tax collected respectively. And such an amount would be credited in the electronic cash ledger of the taxpayer.
5. Interest and Late Fees
The system shall compute the interest and late fees charged to a taxpayer on account of:
- late filing of return,
- making late payment of taxes,
- uploading preceding tax periods’ invoices etc.
However, other interest due to reversals etc. shall be entered by the taxpayer on self-assessment basis.
6. Payment of Tax
The taxpayer needs to first utilize ITC in order to make payment of tax. Thus, the taxpayer can either utilize ITC under the same head or cross-utilize from other heads as per the provisions of the Act and the rules made thereunder. However, the balance amount of tax to be paid can be made in cash.
Furthermore, payment of tax pertaining to supplies attracting reverse charge, interest, fee, penalty and others shall be made in cash only.
7. Suggested Utilization of ITC
The payment table in the Form would suggest the utilization of ITC. However, taxpayer can make changes in the suggested ITC utilization. Provided such changes are as per provisions of the Act read with the rules made thereunder.
8. Adjustment of Previous Period’s Negative Liability
The taxpayer can adjust the previous tax period’s negative liability to the current tax period’s liability.
9. Checking Balance Amount in Ledgers
The taxpayer shall be allowed to view the balance amount available in electronic cash and electronic credit ledger before making payment itself.
The turnover would not include the value of inward supplies attracting reverse charge and import of services mentioned in table 3B. This means that while computing the tax liability only the tax amount pertaining to the above mentioned items will be added to the total tax liability.
11. Generation Of Challan When Funds Are Insufficient
The taxpayer is given the facility of creating a challan for making payment will be made available in case the balance in the electronic cash ledger is insufficient to discharge the liabilities.
12. Adjustment of Previous Period’s Liability
Adjustment to liabilities or input tax credit relating to the period prior to the introduction of current system of return filing shall be reported in table 3 (tax liabilities) or table 4 (input tax credit), as the case may be.