The GST Council decided to come up with the new GST Return system in order to support the taxpayers in its 31st GST Council Meeting. To make the shift from the current GST Return Filing system to the new simplified system easy, GST Council came up with a transition plan.
As a part of this plan, it rolled out a web based offline tool on the common portal to familiarize the taxpayers with the new GST Return System. As per this new System, the small taxpayers with an annual turnover of upto Rs 5 Crores in the previous financial year can choose to file quarterly returns in Form GST Sahaj (Form GST RET-2) and GST Sugam (Form GST RET-3).
These main returns would further be supplemented by:
- GST ANX-1 – Annexure for Outward Supplies, Inward Supplies attracting reverse charge
- GST ANX-2 – Annexure for Inward Supplies
- GST ANX-1A – Amendment to the Details of Outward Supplies and Inward Supplies attracting reverse charge
- GST RET-2A – Amendment to Quarterly Return (Sahaj)
- GST PMT-08 – Payment of Self-Assessed Tax
This article talks about GST Sahaj Return, its components and things to consider when filing GST Sahaj Return.
What is GST Sahaj Return?
Small taxpayers with an annual turnover of upto Rs 5 Crores can only choose to file quarterly returns in Form GST RET-2, that is, GST Sahaj Return. GST RET-2 – Sahaj allows the small taxpayer to declare details of outward supplies to consumers and unregistered persons (B2C) and inward supplies attracting reverse charge only.
It is a simplified quarterly return which the small taxpayers could file from April 2020 as discussed in the 37th GST Council Meeting.
While small taxpayers making B2C supplies and having a turnover of upto Rs 5 Crore in the previous financial year could choose to file quarterly return in GST Sahaj, they are required to make monthly tax payment via GST PMT-08.
Further, there are certain things that the taxpayer needs to know about the quarterly return filing under the new GST Return System.
Key Points to Remember For Quarterly Return Filing Under New GST Return System
- Period of filing tax return would be considered on a monthly basis for all the taxpayers till the taxpayers choose to file quarterly returns
- The turnover for the newly registered taxpayers shall be taken as zero. Thus, they will have an option to choose between monthly, Sahaj, Sugam or Quarterly (Normal) Return under GST.
- Changes in the return filing period would be allowed as follows:
|From||To||Number of Times Return Filing Period Can Be Changed||Time On Which Change Can Take Place|
|Monthly||Quarterly (Normal)||Once||At the time of filing first return by the taxpayer|
|Quarterly (Normal)||Monthly||Once||At the time of filing first return by the taxpayer|
|Quarterly (Normal)||Sugam||Once||At the beginning of any quarter|
|Quarterly (Normal)||Sahaj||Once||At the beginning of any quarter|
|Sugam||Sahaj||Once||At the beginning of any quarter|
|Sahaj||Sugam||Multiple||At the beginning of any quarter|
|Sahaj||Quarterly (Normal)||Multiple||At the beginning of any quarter|
|Sugam||Quarterly (Normal)||Multiple||At the beginning of any quarter|
- Taxpayers filing GST Sahaj Return are not allowed to take credit on missing invoices.
- The taxpayers filing Sahaj Returns can make Nil Rated, Exempted or Non-GST supplies which need not be declared in this return, that is, GST RET-2.
Components of GST Sahaj
|Summary of outward supplies, inward supplies attracting reverse charge and tax liability|
|A. Details of outward supplies|
|1.||Taxable supplies made to consumers and un-registered persons will be auto populated from table 3A of FORM GST ANX-1. The values will be net of debit/credit notes|
|2.||Liabilities relating to the period prior to the introduction of current return filing|
system and any other liability (including excess tax collected from the recipient, if
any) to be paid shall be reported here by the taxpayer.
|B. Details of inward supplies attracting reverse charge|
|1.||Inward supplies attracting reverse charge will be auto-populated from table 3H of|
FORM GST ANX-1. The values will be net of debit / credit notes and advances on
which tax has already been paid at the time of payment, if any
|C. Details of advances received / adjusted and other reduction in liabilities|
|1.||Advances received on account of supply of services during the period will be|
reported by the taxpayer after giving effect to refund vouchers. The same may be
used to adjust any advances reported wrongly earlier
|2.||Adjustment made out of advances reported earlier will be reported by the taxpayer.|
Excess adjustment, if any, made shall be accounted for in the next tax period’s
|3.||Reduction in output tax liability on account of transition from composition levy to|
normal levy or any other reduction in liability shall be reported here by the
|D. Total value and tax liability|
|1.||Sum of part A, B and C will be the total value of supplies and that of liability and|
will be auto- computed.
|Summary of inward supplies for claiming input tax credit (ITC)|
|A. Details of ITC based on auto-population from FORM ANX-1 and action taken in FORM GST ANX-2 and other claims|
|1.||Amount of credit involved in the rejected documents in FORM GST ANX-2 before|
filing return will be auto-populated here and will be net of debit/ credit notes.
|2.||Amount of credit involved in the documents which have been kept pending in|
FORM GST ANX-2 will be auto-populated here and will be net of debit / credit
|3.||Amount of credit on all documents accepted (including deemed accepted) in FORM|
GST ANX-2 will be auto-populated here and will be net of debit / credit notes.
|4.||If any eligible credit has not been claimed in FORM GSTR-3B due to non-receipt of|
supplies etc., the same can be claimed here.
|5.||Credit on inward supplies attracting reverse charge as reported in table 3H of|
FORM GST ANX-1 will be auto-populated here and will be net of debit / credit
notes and advances on which tax has already been paid at the time of payment, if
|6.||i) There may be situations where a credit note was issued by the supplier against an|
invoice but the recipient had taken nil or partial credit on such invoice. Since
acceptance of credit note will lead to reversal of credit, there may be instances
where there will be a double reversal of credit for the recipient. In order to address
the same, a facility has been provided for recipients to self-adjust any such loss of credit arising from issuance of credit notes by the supplier. ii) Any other reclaim of ITC can also be reported here.
|B. Details of reversals of credit|
|1.||If a document is rejected by the recipient after accepting and filing return of any|
quarter, then the value and amount of ITC will be auto-populated here, in the return
filed immediately after such rejection. Credit availed on such document will be
reversed. The amount will be net of debit/credit notes
|2.||Out of the credit available in table 4A, the recipient shall report the amount of|
|3.||Reversal of input tax credit under Rule 37, 39, 42 & 43 shall be reported here, if|
|4.||Any other reversal including downward adjustment of ITC on account of transition|
from composition levy to normal levy not covered by Sr. No. 1 to 3 shall be
|C. Input tax credit available after reversal|
|1.||Difference of credit available in table 4A and reversal of credit reported in table 4B will be the amount of credit available during the tax period.|
|D. ITC declared during first two months of the quarter|
|1.||ITC declared during first two months of the quarter shall be auto-populated from|
FORM GST PMT-08 at Sr. no. 1 & 2 for first month and second month
|E. Net ITC available|
|1.||Difference of credit reported in table 4C and table 4D will be the net ITC available|
during the tax period and will be posted to the electronic credit ledger for utilization
Instructions to File GST RET-2
1. Auto-Filing in GST RET-2
Once the taxpayer uploads the details of supplies in Form GST ANX-1 and the recipient takes the requisite action in Form GST ANX-2, main return in Form GST RET-2 is then files by the taxpayer.
Further, all the details reported in Form GST ANX-1 and Form GST ANX-2 get auto-populated in the main return GST RET-2.
2. Reporting Excess Tax Collected
There can be circumstances when a supplier collects excess tax from the recipients. Such excess tax can be reported in Table 3A(2) in Form GST RET-2 by the supplier. In this part of the Table, taxpayer can report excess tax under other liabilities.
3. ITC Details Based On Auto-Population From Form ANX-1, Action Taken in Form GST ANX-2 and Other Claims
Table 4 of Form GST RET-2 gets auto-populated with ITC details. These details with regards to ITC include:
- ITC on the documents rejected, kept pending or accepted in Form GST ANX-2
- Eligible credit not claimed in GSTR-3B on account of supplies not been received
- ITC on inward supplies attracting reverse charge as reported in Table 3H of Form GST ANX-1 etc.
- NIL or Partial ITC Claimed By the Supplier On A Credit Note Issued By Him Against An Invoice
- Any other reclaim on ITC
4. Treatment of TDS/TCS
TDS deducted or TCS as collected via Form GSTR-7 and GSTR-8 respectively would be credited in the electronic cash ledger. It must be noted that small taxpayers filing GST Sahaj Return are not allowed to make a supply via e-commerce operators who are obligated to collect TCS on the supply made to them by other suppliers.
Hence, this section must be used only for shifting from the old GST return system to the new system.
5. Interest and Late Fee Calculation
The interest and late fee on account of delays in return filing, late payment of taxes and uploading prior tax period invoices shall be calculated by the system. However, other interest on account of reversals etc. shall be manually entered by the taxpayer on self-assessment basis.
6. Utilization of ITC For Tax Payment
Taxpayer can pay the tax amount by utilizing ITC under the same head or cross utilizing ITC from other heads as per the provisions of the Act. Furthermore, the balance amount of tax can be paid in cash.
7. Payment of Tax In Case Of Supplies Attracting Reverse Charge, Interest, Late Fee and Penalty
It must be noted that tax to be paid as a result of supplies attracting reverse charge, interest, late fees, penalty shall be paid only in cash.
8. Suggested ITC Utilization Made Available
The Form includes a payment table for tax which gives suggestion with regards to utilization of ITC. But the taxpayer can make changes in this suggested ITC utilization provided these changes are as per the provisions of the Act.
9. Adjusting The Prior Period’s Negative Liability
A negative liability in respect of the previous tax period is allowed to be adjusted along with the current period’s tax liability.
10. Balance In Electronic Cash and Credit Ledger Available for View
The taxpayer can view the balance amount available in electronic cash and credit ledger before making the tax payment.
11. Inward Supplies Attracting Reverse Charge Not To Be Added To The Turnover
Inward supplies attracting reverse charge as stated in Table 3B would not add to the turnover. The tax liability would simply include the tax amount of such inward supplies.
12. Challan Facility Available On Insufficient Balance In Electronic Cash Ledger
The facility to create Challan for making tax payment is available if the electronic cash ledger of the taxpayer shows the amount of money not sufficient to pay off the tax liability.
13. Adjustment in Liabilities or ITC of Period Before New GST Return System
Adjustments in respect of liabilities or ITC with regards to the period before the introduction of the New GST Return filing system needs to be reported in Table 3 and Table 4 respectively.