Simplified GST Returns and Filing

Last Update Date : April 04, 2019
Estimated Read Time: 5 min

gst simplified return

The CBIC (known as CBEC earlier) released the new draft of the Simplified GST Returns in the 28th GST Council meeting. In the council meeting one major decision of being able to file quarterly return and monthly tax payment in simplified GST returns for taxpayers having small business and a turnover below Rs 5 crore, has been taken. Simplified returns called Sahaj and Sugam has been designed for such taxpayers.

All the taxpayers have to file monthly returns, except for small business taxpayers and a few exceptions like ISD, etc. The simplified return contains only two tables, one for reporting the outward supplies and the other for availing ITC on the invoices provided by the supplier. As a buyer, you can continuously view and lock the invoices that are continuously uploaded by the seller for availing the input tax credit. This process will make sure that the large part of the returns has been filled automatically by the invoices uploaded by the seller and the buyer. To put it in simple words, the whole process will just be ‘Upload – Lock – Pay’.

The taxpayers will get the facility to create their profile that will be based on the nature of the supplies that they make or receive. Therefore, the field of information that would be shown to the taxpayer and he would have to fill will depend on his profile.

Key Features of Quarterly Returns

Monthly Payments and Quarterly Filings

The Council has proposed to provide the facility of filing the quarterly return to small taxpayers, that is, business with up to Rs 5 crore annual turnover in the last financial year. However, they will still be required to pay their taxes on a monthly basis and then avail the ITC on self-declaration basis to pay these taxes.

Monthly or Quarterly Return

The option for filing either a monthly or a quarterly return should be taken from these small taxpayers after which they will have to file their return as per the option selected during that year. If they want to change their option, it will be allowed only once and that too at the beginning of any quarter.

Options in the Quarterly Return

Small taxpayers with an annual turnover of up to Rs 5 crore will have the option to file two types of returns, namely, Quarterly return, Sahaj and Sugam return. Though the quarterly return will be similar to the monthly return except for the fact that it is more simplified and will not have compliance requirement about:

  1. Non-GST supply, exempted supply, etc., as they do not create liabilities
  2. Pending and missing invoices as small taxpayers don’t use these processes in their inventory management
  3. Details of the ITC on capital goods need not be required to be filled

These details will be required to be filled in the Annual return. However, small taxpayers who would want the facility of pending and missing invoice can file monthly return.

Quarterly Return

Sahaj and Sugam are the predefined profiles of the quarterly return as the option to create a profile in the quarterly return will be available.

Sugam and Sahaj Returns

As small taxpayers usually have purchases from the domestic market and sales in the domestic market (B2C or B2B+B2C), two simplified returns have been proposed for them – Sahaj, applicable only for B2C outward supplies, and Sugam, both B2B and B2C outward supplies.

Uploading Invoices

The people who receive from these small taxpayers will not be required to upload the invoice for availing ITC. Therefore, these small taxpayers will be given the facility to upload the invoices continuously in the normal course. The ITC, for the invoices uploaded by 10th of every month, will be available in the next month to the recipient, like in the case of purchases from large taxpayers.

Payment Declaration Form

The small taxpayers will, however, continue to pay their taxes on a monthly basis and they can use the payment declaration form to make the payment in the first and second month of every quarter. The small taxpayers need to declare their self-assessed liability and ITC on a self-declared basis in the payment declaration form.

HSN Code

The HSN wise details will be required to be provided at a 4-digit level or more in the quarterly.

Low Compliance Cost

The introduction of simplification would be beneficial as the compliance cost for the small taxpayers will be lower because the payment declaration form isn’t a return and minor errors will not lead to litigations.

Missing and Pending invoices

Since small businesses only have a few supplies to receive, they track their purchases very well, and they might not need any credit on the invoices that are missing. Also, they don’t need to keep the invoices pending and usually avail credit after it as their inventory size is small. Quarterly returns don’t have the option of “pending & missing invoices” because small business doesn’t need it.

Invoice Management Options

The new Simplified GST Return model has some invoice management options which can be seen as follows:

  1. Pending Invoice
    This can be exercised by recipients for the invoices uploaded by the supplier.
  2. Missing Invoice
    It can be experienced by the recipients for debit notes or invoices that the supplies have not uploaded and where the recipient has availed ITC.
  3. Viewing Invoice
    The invoice that is uploaded by the supplier can be viewed by the recipient in the screen called the ‘viewing facility’. This is also known as the Inward Supplies Annexure.
  4. Reject Invoice
    This can be exercised for the invoices that are uploaded by the supplier but containing the wrong GSTIN, wrong invoice number, tax amounts, tax heads etc.
  5. Locking Invoice
    This can be exercised to indicate acceptance of entering into the transaction that is reported in the invoice. The supplier will not be able to alter the invoice, once it is locked.
  6. Deemed Locking of Invoice
    The invoices that are uploaded by the supplier and that the recipient has not rejected and not kept pending are deemed to be locked on filing the return.

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CA Chetan Shinde
CA Chetan Shinde
Chetan is the Lead Tax Advisor at H&R Block (India) with an experience of almost half a decade in audit and taxation. His professional areas of interest are GST advisory and statutory audit. Apart from taxation, he is passionate about social causes and works extensively towards rural school development and literacy.