GST RET-1, GST RET-2 (sahaj) and GST RET-3 (Sugam) - 13 Important Questions Answered

Introduction

The new GST return is knocking the doors while we are still engaged in the existing GST returns and procedures. The GSTR-3B, GSTR-2, GSTR-3 are all set to be replaced by better GST RET - 1, 2 and 3. Those returns will be business-friendly and easy to file.

Though, the first GST returns will not be mandatory, but it is still recommended that you should file them so that you can learn about their process more efficiently without with pressurized by the deadlines.

But before moving forward with the questions, let us discuss the status of existing and new returns one by one.
 

GST ANX 1 – Details of outward and inwards supplies that require payment of GST under reverse charge

GST ANX 1 is the form which shows the details of transactions that fall under reverse charge mechanism. From July to September, 2019 the GST ANX 1 is optional to be filed. However, for the quarter of October to December, 2019, the GST ANX 1 is mandatory to be filed.

GST ANX 2 – Details of inward supplies

This is not a return but only a window were all inward supplies can be seen and verified.

GSTR-1 and GSTR-3B

These two returns need no introduction, but their farewell time has come. For July to September, 2019, these two returns are mandatory to be filed but after that, these returns are not required to be filed.

Let us now understand about the new returns;

GST RET-1

This is a monthly return which is required to be filed after September 2019. It is required to be filed quarterly, if the turnover is less than Rs.5 crore and monthly if the turnover is more than 5 crore.

However, GST RET-1 is not required to be filed by the following persons;

• Composition dealers.
• Non-resident
• Person supplying OIDAR
• ISD
• Person liable to deduct TDS
• Person liable to collect TCS (e-commerce).
   

GST RET-2 (Sahaj)

GST RET-2 is a simple return filed by the person whose turnover does not exceed Rs.5 crore and who makes supply only to unregistered person. However, GST RET 2 cannot be filed by the following person;

• Composition dealers.
• Non-resident
• Person supplying OIDAR
• ISD
• Person liable to deduct TDS
• Person liable to collect TCS (e-commerce).
• Person who supply to registered person (B2B)
• Person who make zero-rated supplies, or supplies to SEZ units/developers or deemed exports.
• Person who supply to e-commerce
   

GST RET-3 (Sugam)

GST RET-3 works mostly in similar to GST RET-2.

Let us now move towards the important questions;

Will it be possible to amend these new returns, GST RET 1/2/3?

Yes. GST ANX 1 can be amended by filing GST ANX 1A and GST RET 1/2/3 can be amended by filing GST 1A/2A/3A.

Can periodicity of return filing (quarterly to monthly or vice-versa) be changed?

The option to change the periodicity of return filing (from quarterly to monthly or vice-versa) would be allowed only once at the time of filing of first return by a taxpayer. The periodicity of the return filing shall remain unchanged during the next financial year unless it is changed before filing of first return of that year.
 

Can a taxpayer switch from one return form to another?

Yes, the taxpayer can switch from one return form to another.
 

What is the meaning of 'Missing Invoices' in the new return Forms? Who can report and take credit of such invoices?

Missing Invoices' are those invoices which have not been uploaded by the supplier in GST ANX-1 due to any reason. Credit of such invoices can be taken by the taxpayer who opts to file GST RET-1 either on monthly or quarterly basis.

However, the taxpayer who opts to file Sahaj (GST RET-2) or Sugam (GST RET-3) cannot take the credit of missing invoices.

Whether documents can be uploaded by the supplier on real-time basis?

The supplier can upload the documents for any supply on real-time basis. Details of such documents uploaded shall be shown to the concerned recipient on real time basis and the facility to accept or reject such documents shall also be provided.

Who can edit the documents-supplier or recipient?

The new return system provides for editing of or amendment in a document from the supplier's side only. The recipient will have the option to reset, unlock or reject a document. No option shall be available with him to edit or amend a document.

How interest and late fees will be shown in the return?

Interest and late fees for making prescribed default (i.e., late filing of return, making late payment of taxes, uploading preceding tax period's invoices, etc.) shall be computed by the system. Other interest due to reversals of input tax credit shall be calculated and entered by the taxpayer on self-assessment basis.
 

Can the 'input tax credit' of the 'pending invoices' be taken?

The input tax credit in respect of pending invoices shall not be accounted in the main return of the recipient and such invoices would be rolled over to Form GST ANX-2 of the next tax period.

Can 'pending invoices' be amended? If yes, then what is the time limit for such amendment?

Pending invoices will not be available for amendment by the supplier until these are rejected by the recipient. Pending invoices relating to supplies made to a person, not being a person filing return in Form GST RET-1/2/3 (i.e., supplies made to composition taxpayers, ISD, UIN holders etc.), will be available for amendment by the supplier and the same shall not be dependent upon the action taken (accept/reject/pending) by the recipient.

If recipient does not take any action (acceptance, rejection or pending) on the document, then how that document is to be treated in the return?

Any document on which any action of either accepting the document or keeping the document pending or rejecting the document is not taken by the recipient, then it shall be deemed to be accepted upon filing of the return by him. Input tax credit on such deemed accepted documents shall be reflected in the main return.

If my supplier does not file the return, can I take 'Input Tax Credit' in that case?

Status of return filing (not filed, filed) by the supplier will also be made known to the recipient in Form GST ANX-2 of the relevant tax period after the due date of filing of return is over. Mere status does not affect the eligibility of input tax credit. The documents uploaded in Form GST ANX-1 for month 'M' by a supplier who did not file his return for the previous two consecutive tax periods (M-1 and M-2 months) shall be made available to the recipient in Form GST ANX-2 with an indication that the credit shall not be available on such documents.

In other words, such documents will be visible to the recipient but the recipient cannot claim ITC on such inward supplies. However, the recipient can reject or keep such documents pending until filing of return by the supplier.

For suppliers filing return on quarterly basis, this period will be one quarter i.e. if return of one quarter has not been filed, then recipient will not be able to claim credit on the invoices uploaded during next quarter.

Can document on which 'Input Tax Credit' has been already availed be rejected?

Separate functionality would be provided to search and reject an accepted document on which credit has already been availed. Input tax credit availed on such document shall be shown for reversal which may be adjusted in Form GST RET-1 to arrive at the amount of input tax credit availed. However, such reversal of credit for the recipient will be with interest as per the provisions of the Act read with the rules made there under.

Who can file Nil Return?

Nil return can be filed if you have not uploaded any document in Form GST ANX-1 and no inward supplies (purchases) have been auto-populated in Form GST ANX-2 and no other information is required to be reported in the main return i.e. Form GST RET-1/2/3.
 

Conclusion

The new GST returns are expected to bring ease and comfort to the taxpayer. If you are finding it difficult to comply with your GST, please contact us now.