New return filling system under GST - The way forward.

The GSTN has placed a document on new GST Return filling system on 8^th March 2019 on the GST portal. It has been proposed that the new return system shall be operational on a trial basis from 1st April 2019 and on a compulsory basis from 1st Jul 2019.

Here in this article, we have explained the requirements and applicability of all the three returns namely Sahaj, Sugam and Normal. The taxpayer can opt to file ANY ONE of the three returns depending upon the applicability and business requirement. Each return has different features.

This article in later part also discusses the flow of Input tax credit in the new return formats.

A. POINT OF DIFFERENCES BETWEEN THE THREE TYPES OF RETURNS

Particulars	Normal	Sahaj	Sugam
Forms	GST Ret 1	GST Ret 2	GST Ret 3
Annexures	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A  Amendment to Inward supplies	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A Amendment to Inward supplies	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A Amendment to Inward supplies
Periodicity	Return: Quarterly or Monthly Payment: Monthly	Return: Quarterly Payment: Monthly	Return: Quarterly Payment: Monthly
Applicability	For Turnover less than 5 Cr. – Option quarterly For Turnover of more than 5 Cr. – Monthly	Turnover less than 5 Cr.	Turnover less than 5 Cr.
Features	1. All outward supplies 2. The credit of all eligible Inward supplies including missing Invoices (Not uploaded by Supplier) can be taken.	1. Only B2C outward supplies can be shown. 2. Inward supplies attracting tax under RCM can be shown. 3. Cannot make supplies through e-commerce operators. 4. The credit of Missing invoice (Not uploaded by Supplier) not allowed. 5. Not be allowed to make any other type of inward or outward supplies 6. Such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in said return.	The only difference from Sahaj return is that here B2B outward supplies can also be shown. Everything else is same as Sahaj returns.
Particulars	Normal	Sahaj	Sugam
When can the data can be uploaded	Same as Sahaj For Monthly Returns, no documents upload will be possible during 18th to 20th of the following month.	a. Any time during Quarter to which it pertains b. Upto September of the following year or date of filing of annual return whichever is earlier c. No document upload will be possible during 23rd to 25th of the month following end of quarter	Same as Sahaj
Switch	Can be switched to Sugam or Sahaj only ONCE during a year	Can be switched to Sugam or Quarterly Normal MULTIPLE Times during a year	Can be swited to Sugam only ONCE Can be switched to Quarterly Normal MULTIPLE times.
Suitable for	a.    A taxpayer who is also importing and exporting goods/ services (Including Sez Supplies) b.     A taxpayer who is supplying goods/services through E-commerce supplier c.Who wants to avail provisional credit of Invoices not uploaded by Supplier d. More suitable for bigger businesses	a. A taxpayer whose turnover is less than Rs. 5 Crore. b. Who is supplying goods/services only to consumer and not to business c. Who is dealing in only domestic business d. Who does not want to avail Provisional credit of invoices not uploaded by the supplier e. Maybe suitable for a shop keeper selling goods to consumers only	If a taxpayer is supplying goods/services to business, Sugam can be used. Rest all features are same as Sahaj. More suitable for taxpayer who supplies goods to both businesses and consumer or only Businesses.

B. HIGH-LEVEL PROCESS FLOW OF INPUT TAX CREDIT IN SUGAM AND SAHAJ RETURNS

1. For Any document, no action is taken (Accepted, Rejected or Kept pending) shall be deemed to be accepted on the filing of the respective return.

2. The documents uploaded 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 returns on a quarterly basis, this period will be one quarter i.e. if the return of one quarter has not been filed, then recipient will not be able to claim the credit on the invoices uploaded during next quarter.

3.  The return system provides for all editing or amendments from the supplier’s side only. The recipient will have the option to reset / un-lock or reject a document but editing of or amendment to the same shall be made by the supplier only.

C. HIGH-LEVEL PROCESS FLOW OF INPUT TAX CREDIT IN NORMAL RETURNS

Important Notes about the above process 

1. Initially the total of provisional credit to be availed in the return. However later (after Two months in case of monthly return or one quarter in case of quarterly Returns) or if the supplier does not upload the invoices in his return, the recipient shall have to upload the invoice wise details.

e.g. If 3 invoice of April is not uploaded by the supplier, the recipient will have to avail credit in total during the April month. However, if such invoices are not uploaded even up to June, Recipient will have to upload the invoice wise details of all three invoices.

2. In case of supplier later uploads the Invoices, Credit taken provisionally shall have to be reversed.

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