Key features of New Quarterly GST Returns

CBIC Placed New GST Returns and formats in public domain  on 30.07.2018.

[Video] New Quarterly GST Returns Process

Video by CA Satbir Singh in Hindi

Quarterly filing and monthly payments:

• It is proposed to provide facility for filing of quarterly return to small taxpayers, who had a turnover upto Rs. 5 Cr. in the last financial year.

• The turnover shall be calculated based on the reported turnover in the last year i.e. 2017-18, annualized for the full year.

• It shall be possible for the taxpayer to check on the common portal whether he falls in the category of a small taxpayer.

• A newly registered taxpayer shall be classified on the basis of self-declaration of the estimated turnover.

• However, they would still need to pay their taxes on monthly basis and avail input tax credit on self-declaration basis to pay the monthly taxes.

Quarterly or monthly return

• The facility would be optional and small taxpayer can also file monthly return like a large taxpayer

• Option for filing monthly or quarterly return shall be taken from these small taxpayers at the beginning of the year and generally thereafter they would continue to file the return during the year as per the option selected.

• During the course of the year option to change from monthly to quarterly or vice-versa shall be allowed only once and at the beginning of any quarter. This is necessary to avoid confusion for the taxpayer and also to avoid complex validations in the IT system.

Options in quarterly return

• Small taxpayers having turnover upto Rs. 5 Cr. would have  option to file one of three forms, namely –

1. Quarterly return,
2. Sahaj or
3. Sugam.

• Quarterly return shall be akin to the monthly except that it has been simplified and shall not have the compliance requirement in relation to –

(i) Missing and pending invoices as small taxpayers do not use these procedures in their inventory management.
(ii) Supplies such as non-GST supply, exempted supply etc as they do not create any liability.
(iii) The details of input tax credit on capital goods credit shall also not be required to be filled.

This information shall be required to be filled in the Annual Return.

• Small taxpayers who would like to facility of missing and pending invoice may file monthly return.

Profile for Quarterly Return:

• Option to create profile in the quarterly return shall also be available.

There are many kinds of supplies which can be made under GST and also there are many types of inputs using which input tax credit can be availed. Most of the taxpayers have only a few types of supplies to make and few types of inputs to report.Therefore, a questionnaire shall be used to profile the taxpayer and only such part of return shall be shown to him which are relevant to his profile. For example, a small manufacturer or trader, buying and selling locally may need to file a return consisting of only a few lines. Profiling would allow fields like export, supplies to and from SEZ to be blocked from return and make return adequate for his purpose.

• Sahaj and Sugam are predetermined profiles of the quarterly return.

Sahaj and Sugam Returns

Small taxpayers often have purchases only from the domestic market and sales in the domestic market i.e B2B purchases locally and supplies either as B2C (Business to Customer)  or B2B (Business to Business) +B2C. They constitute a very large part of the tax base and therefore two simplified quarterly returns are proposed for them respectively.

They have been named as

• “Sahaj” (only B2C outward supplies) and
• “Sugam” (both B2B and B2C outward supplies).

In effect, these returns are pre-determined profiles for small taxpayers using quarterly return.

Uploading of invoices

•  The recipients from these small taxpayers would need uploaded invoice for availing input tax credit and therefore the small taxpayers would be given facility to continuously upload invoices in the normal course.

• The invoices uploaded by 10th of the following month would be available as input tax credit to the recipient in the next month as is the case in case of purchases from large taxpayers.

Invoice uploaded but return not filed

•  In cases where no return is filed after uploading of the invoices by the supplier, it shall be treated as self-admitted liability by the supplier and recovery proceedings shall be initiated against him after allowing for a reasonable time for filing of the return and payment of tax.

Payment declaration form for payment of monthly taxes

•  These small taxpayers would  continue to pay taxes on monthly basis and in the first and second month of every quarter, they would use a payment declaration form to make the payment.

• In the payment declaration form following shall be declared on self-declared basis
  • self-assessed liability and
  • input tax credit

• To assist in tax payment and availing input tax credit, necessary liability arising out of uploaded invoices of outward liability and input tax credit flowing from viewing facility would be shown to the taxpayer.

• The payment declaration form shall only allow full payment of the liability arising out of uploaded invoices.

• Late payment of tax liability including that in first and second month of the quarter shall attract interest liability.

Lower compliance cost

• The benefit of this simplification would be that the compliance cost for small taxpayers would come down as payment declaration form is not a return and minor errors in the same would not lead to initiation of any legal action.

HSN:

HSN wise details would need to be provided at 4 digit level or more in the quarterly  return.

Pending and missing invoices

•  Small businesses have only a few supplies to receive and  therefore they track their purchases well and may not need credit on missing invoices.
• As the inventory size of these businesses is small they also do not need to keep invoices pending and generally avail credit forthwith.
• Therefore quarterly return shall not have the compliance requirement of missing and pending invoices as small businesses do not use these procedures in their inventory management.

Reporting of Missing Invoices

Taxpayers filing quarterly returns shall report missing invoices in the next quarter..

 Nil return:

• Taxpayers who have no purchases, no output tax liability and no input tax credit to avail in any quarter of the financial year shall file one NIL return for the entire quarter.

• In month one and two of the quarter, such taxpayer shall report NIL transaction by sending a SMS. Facility for filing quarterly return shall also be available by an SMS.

Draft formats: The draft formats for quarterly returns are placed at page 36 to 54.