5 E way Bill Changes from 16th November 2018

On the 12th of November 2018, certain enhancements to the e-way bill process were proposed by the National Informatics Centre. These changes, which seek to improve the e-way bill experience for businesses and transporters alike, are to go live from 16th November, 2018. Let’s go through these 5 e way bill changes one by one, to understand how they will impact you and your business:

Checking for duplicate e-way bills based on same invoice number

Earlier, the e-way bill system was not equipped to check for duplicates based on the invoice number. Thus, if multiple e-way bills were generated against the same invoice number, either by intention or accident, the system was allowing that to happen, resulting in problems. But as per the e way bill changes from 16th November 2018, the system will not allow the consignor or the supplier to generate duplicate e-way bills. The system will check for duplicates based on the consignor’s GSTIN, document type and document number. Thus, if one e-way bill has already been generated against one invoice, no additional e-way bills against the same invoice will be allowed. The same will hold true for transporters and consignees as well – they too will not be allowed to raise e-way bills, if the e-way bill has already been generated by the consignor against a particular invoice. Not just that, if the transporter or consignee has generated one e-way bill against the consignor’s invoice, and any other party tries to generate the e-way bill, the system will immediately alert the user that one e-way bill is already present against that invoice.

Options for CKD, SKD and Lots

As per the latest e way bill changes, the options for “CKD” (Completely Knocked Down), “SKD” (Semi Knocked Down) and “Lots” for the “Supply Type” field will come in to play, which is particularly useful, whenever big consignments are broken down and moved in batches. The same also applies for export and import consignments, where a single consignment may be too big to be moved from supplier to recipient.

Handling Addresses for Export & Import Consignments

For export consignments:

  • “Bill To” party will be “URP” (Unregistered Person) or GSTIN of SEZ unit with “State” as “Other Country”
  • Shipping Address and PIN Code will be of the location (airport / shipping yard / border check post) from where the consignment is moving out from the country

For import consignments:

  • “Bill From” party will be “URP” (Unregistered Person) or GSTIN of SEZ unit with “State” as “Other Country”
  • Dispatching Address and PIN Code will be of the location (airport / shipping yard / border check post) from where the consignment is entering the country

Handling Bill to – Ship to Transactions

From 16th November 2018, the e-way bill portal will be fully equipped to handle “Bill To – Ship To” transactions. Such transactions are primarily of 4 types, depending upon the number of parties involved in the billing and movement of goods. The types are as follows:

  • Type 1 – Regular: This is a regular or normal transaction, where billing and movement of goods is happening directly between two parties – consignor and consignee.
  • Type 2 – Bill To – Ship To: In this type of transaction, three parties are involved. Billing takes places between consignor and consignee, but the goods move from consignor to the third party as per the request of the consignee.
  • Type 3 – Bill From – Dispatch From: In this type of transaction also, three parties are involved. Billing takes places between consignor and consignee, but the goods are moved by the consignor from the third party to the consignee.
  • Type 4 – Combination of both: This is the combination of Type 2 and Type 3 and involves a total of four parties. Billing takes places between consignor and consignee, but the goods are moved by the consignor from the third party to the fourth party, as per the consignee’s request.

E way Bill changes in Bulk Generation Tool

Amongst other e way bill changes, certain new columns have been added in the Bulk Generation Tool facility of the portal. More information on the same will be made available on 16th November 2018, and we promise to share the same with you in the next few days.

Annual Return GSTR 9 Format

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By definition, form GSTR 9 is a consolidated return of all the returns filed during the previous financial year. The annual return which is due on 31st December, 2018 should be filed with the consolidated details of all returns filed from July’17 to March’18. On 4th September, 2018, CBIC has notified the annual return GSTR 9 format in which the consolidated details need to be captured by the taxpayers.

To know more on applicability and due date to file annual return GSTR 9, please read our blog Annual Return GSTR 9,’ In this blog, we will discuss about the annual return GSTR 9 format.

Annual Return GSTR 9 Format

The annual return GSTR 9 format consists of 6 parts in which the details of supplies made or received during the period of July’17 to March’18 need to be captured. The details required in all 6 parts of GSTR 9 format is only at the consolidated level. The following are the 6 parts of GSTR 9 format as notified by the CBIC.

Part-1 of GSTR 9 Format Basic Details of Taxpayer
Part-2 of GSTR 9 Format Details of outward and inward supplies declared during the financial year
Part-3 of GSTR 9 Format Details of ITC as declared in returns filed during the financial year
Part-4 of GSTR 9 Format Details of tax paid as declared in returns filed during the financial year
Part-5 of GSTR 9 Format Particulars of the transactions for the previous FY declared in returns of April to September of current FY or up to the date of filing of annual return of previous FY whichever is earlier
Part-6 of GSTR 9 Format Other Information such as demands and refunds, HSN Summary, Late Fee supplies received from composition taxpayers, deemed supplies etc.

Part-1 of GSTR 9 Format

In Part -1 of annual return, you need to capture the basic registration details of the taxpayer. The details such as fiscal year, GSTIN, legal name and Trade name (if any) need to be captured. These details will be auto-captured once the annual return form GSTR 9 is made available in the GST portal.

Part-2 of GSTR 9 Format

In Part-2 of annual return form, you need to capture the consolidated details of outward supplies as declared in the returns filed during the financial year. The Part-2 is further split into the following two sections:

  • Supplies on which tax is payable: All taxable supplies (both B2B and B2C), exports on payment of tax, supplies to SEZ on payment of tax, inward supplies attracting reverse charge and advance received (but invoice is yet to be issued) need to be captured.
  • Supplies on which tax is payable: This includes exports and SEZ supplies without payment of tax, outward supplies on which tax is to be paid on a reverse charge, exempt supplies, nil rated supplies and non-GST supplies.

You also need to capture the consolidated details of Debit note, Credit notes and amendments related to supplies separately.

Part-3 of GSTR 9 Format

The part -3 of annual return consist of all input tax credit availed and reversed in the financial year for which the annual return is filed. This part is further split into the following 3 sections:

  • ITC availed as declared in the returns filed: In this section, ITC availed through Form GSTR-3B will be auto-captured and you are required furnish the ITC availed on different nature of Inward supplies such as B2B, B2C, Imports etc. with a break-up of Inputs, Input services and capital goods. Ideally, there should not be any difference between the ITC claimed in GSTR-3B and the details declared in this section. This section will also include the transition credit availed through Tran-1 and Tran-2.
  • ITC reversed and ineligible ITC: Here, you need to furnish the details of ITC reversed owing to various reasons such as used in making exempt supplies, non-business use etc. Also, the ineligible ITC as declared in the Form GSTR-3B.
  • Other ITC related Information: In this section, the ITC as per form GSTR-2A will be auto-populated and you have to give the details of ITC availed on B2B inward supplies, ITC reclaimed and ITC availed after March’18 for inward supplies received from July –March’18. You also need to declare the details of ITC available but not availed, ITC available but not ineligible, IGST credit on import of goods etc.

Part-4 of GSTR 9 Format

In part of 4 of the annual return GSTR 9 format, the actual tax paid as declared in the returns filed during the previous financial year need to be captured. Tax-wise break-up of tax payable, tax paid in cash and paid through ITC should be furnished.

Part-5 of GSTR 9 Format

In part 5 of GSTR 9, you need to declare the details of transactions related to previous financial year but declared in the returns of April to September of current FY (2018-2019) or date of filing of annual return for the previous financial year, whichever is earlier.

For example in the annual return for the FY 2017-18, the transactions related to July –March’18 are declared in the returns filed in April to September 2018. Let’s say, ITC is availed on an invoice dated 15th February, 2018 in GSTR-3B return of August, 2018 filed on 20th September, 2018. The consolidated details such supplies need to be declared in this section.

Part-6 of GSTR 9 Format

In part of 6 of GSTR 9, you need to capture the following details

  • Details of demands and refunds. This includes Total refund claimed, refund sanctioned, refund rejected, refund pending, the total demand of taxes, demands pending etc.
  • Supplies received from composition dealer, goods sent on approval and deemed supplies.
  • HSN-wise summary of outward supplies
  • Late fee payable and paid.

Conclusion

By now, you would have estimated the amount of efforts and time it requires to file to annual return in GSTR 9. Though the details are at consolidated level, you have to provide the break of supplies either based on nature of supplies (B2B. B2C, Imports, etc.) Or the nature of goods (Input or capital goods). Instead of waiting for the annual return to be activated in GST portal, it recommended for businesses to study the annual return form in detail, understand and start preparing the GSTR 9 now such that you have an ample time to file an accurate annual return.

Key features of new GST quarterly returns

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The new GST quarterly returns are meant for the small businesses in India. It is an initiative by the GST Council to ease compliance procedures for such businesses. In this article, let us understand the key features of the new GST quarterly returns.

Who can file GST quarterly returns?

Persons whose turnover is up to Rs. 5 Crores in the last financial year can file quarterly returns.

Can a small business opt to file the monthly return instead of quarterly return?

A person whose turnover is up to Rs. 5 Crores has an option to file the monthly or quarterly returns. This choice will be taken from taxpayers at the beginning of a year. If the taxpayer wants to change from filing quarterly returns to monthly returns during a year, it can be done once during a year, at the beginning of a quarter.

How are quarterly returns different from monthly returns?

Quarterly returns will be simpler than monthly returns. The following details will not be required to be given in quarterly returns:

  1. a. Missing and pending invoices

Missing invoices are the invoices which a taxpayer’s suppliers have missed uploading. Pending invoices are invoices which have been uploaded by the supplier but for which any of the following three situations exist:

  • The supply has not been received by the recipient
  • The recipient is of the view that the invoices requires amendment
  • The recipient is not able to decide whether to take input tax credit on the invoice for the time being

A person filing quarterly returns will not be able to report missing and pending invoices. The GST Council has decided to omit these details from quarterly returns assuming that small businesses will deal with few known suppliers and situations of missing and pending invoices will not arise. However, in case a business requires the facility to report missing and pending invoices, they can opt to file the monthly returns.

  1. b. Non-GST supplies, exempted supplies, etc. which do not create any liability.
  2. c. Input tax credit on capital goods

However, persons filing quarterly returns will need to fill details of non-GST supplies, exempted supplies and input tax credit on capital goods in the Annual return.

What are the types of quarterly returns?

There will be 3 types of quarterly returns. Taxpayers can file the return which is applicable to them. The types of quarterly returns are:

a. Sahaj

Persons making purchases only from suppliers in India and supplying only to consumers or unregistered persons (B2C) in India can file the Sahaj return.

b. Sugam

Persons making purchases only from suppliers in India and supplying to both registered businesses as well as consumers or unregistered businesses (B2B + B2C) in India can file the Sugam return.

c. Quarterly return

Persons who make imports or exports, in addition to domestic purchases and supplies, can file the quarterly return.

How will the GST return filing procedure be?

The entire process of return filing will be simplified for all taxpayers. You can learn more about the new GST return filing procedure in our blog ‘New GST return filing process- A quick guide’.

Should tax be paid on quarterly basis also?

No, persons filing quarterly returns will need to pay tax on monthly basis. This will be done through a payment declaration form. In the payment declaration form, the taxpayer’s liability based on invoices uploaded will be shown. Similarly, input tax credit based on invoices uploaded by the taxpayer’s suppliers will be shown. Accordingly, the taxpayer can pay tax for each month. The benefit of payment declaration form is that it is not a return and minor mistakes made will not lead to legal action. This will again ensure that small businesses don’t have to pay additional penalties for minor mistakes made in the payment declaration form.

What happens if tax is not paid on monthly basis?

A taxpayer will be liable to pay interest for late payment of the tax due for each month.

Hence, the new GST quarterly returns are aimed at simplifying compliance for small business. Measures such as Sahaj and Sugam returns and the new GST return filing procedure are good steps in this regard. However, businesses must know that quarterly returns do not have the facility of reporting missing and pending invoices. If your business requires these facilities, it is recommended to opt for monthly returns.

Key features of new GST monthly returns

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In the 28th GST Council meeting, the GST Council approved the new GST monthly returns. These had also been placed in the public domain for feedback from businesses, CAs and industry bodies. A major change in the new GST returns is the simplified monthly return to be filed by persons whose turnover is more than Rs. 5 Crores. Let us understand the key features of the new monthly GST returns.

Applicability of new GST monthly returns

All regular taxpayers whose turnover is more than Rs. 5 Crores must file the monthly GST return. Even persons having turnover up to Rs. 5 Crores can opt to file the monthly return, instead of the quarterly return.

Due date of new GST monthly returns

The due date for filing the new GST monthly returns will be 20th of the next month.

Advantage of filing new GST monthly returns versus quarterly returns

Taxpayers filing the GST monthly returns will have the capability to report missing and pending invoices, which a person filing quarterly returns will not be able to. The feature of missing invoices gives recipients the power to report invoices which suppliers have missed uploading. Pending invoices are invoices which have been uploaded by the supplier but for which any of the following three situations exist:

  1. The supply has not been received by the recipient
  2. The recipient is of the view that the invoices requires amendment
  3. The recipient is not able to decide whether to take input tax credit on the invoice for the time being

These are two important capabilities that a business filing quarterly returns will not have. Hence, even businesses having turnover upto Rs. 5 Crores must evaluate their suppliers and ensure that they choose monthly returns in case they would like the facility to report missing or pending invoices.

Profile based return

Since most taxpayers have limited types of supplies and limited types of inputs, the fields shown in the GST return will be based on the profile of the taxpayer. To understand the profile of the taxpayer, a questionnaire will be used. Fields such as exports, supplies to SEZ, etc. will be shown only if the taxpayer makes such supplies.

New return filing process

The entire process of return filing will be simplified for all taxpayers. You can learn more about the new return filing process in our blog ‘New GST return filing process- A quick guide’.

Facility to file ‘Amendment return’

Taxpayers can now file amendment returns to rectify wrong entries made in returns filed. Two amendment returns can be filed for each tax period. However, if the difference in tax liability shown in the amendment return is more than 10%, a higher late fee will be due.

File Nil GST monthly return by SMS

Persons who have no purchases, no output tax liability and no input tax credit in any quarter can file one nil return for the entire quarter. Facility to file the nil return by simply sending an SMS will be made available.

Hence, the new GST monthly returns will be simpler for taxpayers, with all the above facilities being made available. In addition, the new return filing process will also make taxpayers’ lives easier. A key benefit for persons filing monthly returns is the feature of reporting missing and pending invoices. In our next article, we will understand the key features of the new GST quarterly returns.

Last Chance to claim Unclaimed ITC – GSTR-3B

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The GSTR-3B of September, 2018 is little different compared to the GSTR-3B which you had filed all these days. The difference here is not about the format rather it is about compliance activities, effort and time involved in filing GSTR-3B of September, 2018.

Yes, you guessed it right! The difference is all about the last chance to claim unclaimed ITC on invoices pertaining to July’2017 to March’2018.

You might be aware that Input tax credit pertaining to invoices issued by the suppliers during 1 July 2017 to 31 March 2018 needs to be claimed on or before filing GSTR-3B of September, 2018. This implies that the last opportunity for you to claim ITC is to report it in GSTR-3B of September, 2018.

The good news is that the due date to file GSTR-3B is extended to 25th October, 2018 which was originally dated to 20th October, 2018.

Let us consider an example for ease of understanding.

If an invoice is issued by the supplier on 31 March 2018 and If ITC is not claimed on such Invoice in any of GSTR-3B filed till 25 October 2018, then credit pertaining to such invoice cannot be claimed and it will lapse.

In order to safeguard your ITC from getting lapsed, the following are some of the key actions which you need to consider before filing GSTR-3B of September, 2018.

  • Download GSTR-2A from GST Portal
  • Reconcile GSTR-2A with your books of Accounts.
  • The reconciliation activity involves line-wise comparison of your purchase register with GSTR-2A.
  • Post reconciliation, identify the purchases pertaining to July’17 to March’2018 on which ITC is not claimed.
  • Ideally, purchases which are part of GSTR-2A but not reflected/accounted in your books are the ones which you need to look for and claim ITC.
  • You may also need to verify your previous GSTR-3B returns to identify the invoices accounted in books but not claimed.
  • After the identification of unclaimed purchase invoice, determine the ITC eligibility on such invoices. Meaning, the ITC should not be either blocked or restricted.
  • Claim eligible ITC on Invoice pertaining July’17 to March’18 by reporting it in GSTR-3B along with ITC of September month.

Reconciliation of books with returns is key for any business to be GST complaint. It is not a one-time activity which you need to do it for availing unclaimed ITC, rather it is a continuous activity which needs to be carried out every month. The Reconciliation of returns with books of accounts will help the businesses in identifying the following:

  • Suppliers who have not filed their GSTR-1
  • Instances where wrong details are being disclosed by your Suppliers
  • Cases where Wrong GSTIN is disclosed
  • Invoices on which ITC has not been availed
  • Mismatch due to Debit notes and credit notes issued

Over and above, it helps you to identify the GAP between 2Aà3BàBooks, follow-up and act on time.

While the benefits of reconciliation are many but you can leverage on these only with help of system assisted reconciliation. The efforts and time involved in manual reconciliation are huge. It involves line-by-line comparison of GSTR-2A with your books of accounts. Therefore, it is recommended that you need to have a software which automates the reconciliation activity by reading the GSTR-2A and the purchase invoices recorded in the books.

Using Tally.ERP 9, you can upload the GSTR-2A and automatically reconcile the purchases accounted in books and GSTR-2A. To know more, please read Reconciliation of GSTR-2A with Books of Accounts

Form GSTR-9 – Annual Return in GST

form-gstr-9-annual-return-in-gst

It’s been more than 15 months since the introduction of GST  and by now, most of the businesses registered under GST are quite familiar in filing GST returns i.e. GSTR-1 which needs to be filed either quarterly or monthly and GSTR-3B on a monthly basis. Now, it’s time for businesses to file yet another return ‘Annual GST return in GSTR-9 Form’.

On 4th September 2018, the new GSTR-9 format for filing annual return was notified by CBIC which details the information to be furnished.  In this blog, we will understand the following:

What is GSTR-9?
Who Should File GSTR-9?
Different types of GST Annual returns
Due date to File GSTR-9
Penalty for Late Filing of GSTR-9

What is GSTR-9 Form?

Form GSTR-9 is an annual return to be filed by the businesses registered under GST. In Form GSTR-9, you need to declare the consolidated details of outward supplies, inward supplies, GST payable and ITC claimed for the previous financial year. For the previous financial year 2017-2018, you need to furnish the consolidated details of supplies made or received from July, 2017 to March 2018.

All you need to do here is to consolidate the details which you have already furnished through GSTR-3B and GSTR-1 either on a monthly or quarterly basis and declare it in the prescribed format of GSTR-9.

Who Should File GSTR-9 Form?

The annual return in GSTR-9 form needs to be filed by all the businesses who have obtained regular GST registration. In other words, the annual return in form GSTR-9 is not required to be filed by the businesses registered under Composition scheme, Input Service Distributor, casual taxable person, non-resident taxable and e-commerce operator.

Different Types of GST Annual returns

The following are the different type of annual GST returns applicable to the businesses.

Type of Business GST Annual Return Form
Regular Registered Business GSTR-9 Form
Business opted for Composition scheme GSTR-9A Form
E-commerce Operator GSTR-9B Form

Currently, only Form GSTR-9 format has been notified by the CBIC and other formats are yet to be notified.  Over and above the annual return form GSTR-9, the business who have obtained regular GST registration and if the aggregate turnover during a financial year exceeds 2 crore rupees, they are required to submit audited annual accounts and a reconciliation statement by filing GSTR-9C.

Form GSTR-9 Due Date

As prescribed in the GST Act, all the annual returns should be filed on or before the 31st of December following the end of such fiscal year. Thus, the GSTR-9 form for July’17 to March’18 is 31st December, 2018, unless it is extended through a notification. Currently, the provision for filing of GSTR 9 form in GST portal is yet to be made available.

Penalty for Late filing of GSTR-9 form

Failure to furnish the annual return in GSTR-9 form will attract penalty. A late fee will be levied if GSTR-9 is not filed with the due date. Late fees for failure to furnish GSTR-9 is 200 Rs per day (CGST 100 Rs + SGST 100 Rs). However, the maximum amount of penalty cannot exceed 0.25% of the total turnover of the taxpayer.

How to File GST Sahaj Return

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Form GST Sahaj is a quarterly GST return to be filed by 20th of the subsequent quarter. The businesses whose turnover in the previous financial year is up to 5 Crores and engaged in making outward supplies only to B2C i.e. end consumers or unregistered businesses can opt to file GST Sahaj return.

Though the GST Sahaj return filing is on a quarterly basis, the payment of GST needs to be made on monthly basis using the payment declaration form. The businesses need to determine the payable tax and Input tax credit on the self-assessed basis to determine the monthly tax payable.

In this article, we will understand the GST Sahaj return filing Cycle.

The details of outward supplies in GST Sahaj form are required only at a summary level. This is because, GST Sahaj is applicable only if you are making B2C supplies and your customer (the buyer) who is either an end consumer or an unregistered business who will not be in a position to claim ITC on the supplies made by you. Hence, the details are required only at summary level instead of invoice-wise.

Let us understand GST Sahaj return filing with an illustration

sahaj return

We have considered the April-June, 2019 to explain the GST Sahaj return filing cycle. In the above illustration:

  • The taxpayer makes the self-assessed payment for the month of April, 2019 and May, 2019 using Payment Declaration Form.
  • On completion of the quarter April to June, 2019, GST Sahaj return needs to be filed by 20th of July 2019 with the payment of Tax.
  • In GST Sahaj form, the taxpayer needs to furnish the consolidated outward supplies details at rate-wise (5%, 12% etc.) and place of supply-wise.
  • Input Tax credit details will be auto-populated in GST Sahaj form.
  • As illustrated, as and when the invoices are uploaded by the supplier, details of ITC will be auto-captured in inward supplies annexure and which in turn gets auto-populated in GST Sahaj return form.
  • Remember, quarterly returns forms will not have a concept of claiming and reporting ITC on missing invoices which supplier has not uploaded. You can claim the ITC only to the extent of invoice uploaded by the supplier.
  • Once the required details are furnished in GST Sahaj return, the next step is to make payment.
  • The tax payment here includes :
    • Tax payable for supplied made during 3rd month of the quarter.
    • Adjustment due to the difference in tax paid on the self-assessed basis in the first and second-month versus the outward supplies details declared in the Sahaj return.
    • Adjustment due to ITC claimed on self-assessed basis versus the auto-populated ITC available in inward supplies annexure.
  • Once the tax payment is done, you can submit and file the GST Sahaj returns.

Conclusion

For businesses, the Sahaj return filing cycle is very simple. All you have to do is self-assessed monthly payment and mention the consolidated details of outward supplies. The rest of the details are auto-populated in Sahaj return. The businesses can leverage on simplification only when they carefully assess their businesses profile and choose the one which is suitable.

Simplified GST Returns – New GST Return Forms

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In order to simplify the GST return filing process, the GST council meeting held on 21st July, 2018 has approved the new GST returns. Different new GST return forms have been introduced considering the diversity of businesses operating in the country.

In another way, you must have heard the famous quote ‘One Size Does Not Fit All’. This is exactly the same reason for having new GST return forms. Based on the size the businesses, the type of supplies, the customers you deal with and the geography, the GST council has designed different type of new GST returns which will simplify the GST return filing process each of type of business instead of having a common GST return format for all.

In this article, we will understand the different types of new GST return forms which are approved by the GST Council.
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As illustrated above, broadly the new GSTreturns are classified into quarterly returns and Monthly returns. Again, the quarterly returns are further classified into Form GSTR Sahaj, Form GSTR Sugam and GSTR quarterly.

Worried! Because there are too many GST Returns forms to be filed?

No need to worry! You are not required to file all the forms illustrated above. Just like selecting the right size which fits you, you need to select one of the new GST return forms which suits your business profile.

Let us understand each of the new GST return forms in detailed.

Quarterly Returns

The Registered businesses with the turnover up to 5 Cr in the previous financial year are allowed to opt for filing quarterly returns. However, the payment needs to be made on monthly basis and it will be a self-assessed basis. The input tax credit will be available only to the extent of invoices uploaded by the supplier. The quarterly returns will not have a concept of claiming ITC on missing invoices which are not uploaded by the supplier.

As illustrated above, quarterly returns consist of three different GST return forms which business can choose based on their profile.

Let us understand the different type of quarterly GST returns forms

1. Form GSTR Sahaj

The businesses who often purchase only from the domestic market (within India) and their 100 % outward supplies are made to end consumers and unregistered business, known as B2C supplies can opt for GST return Form Sahaj.

The details of outward supplies are required to be captured at summary level with a break-up of tax rate and place of supply.  The details of ITC from inward supplies annexure which gets auto-populated based on the invoices uploaded by the supplier.

2. Form GSTR Sugam

The Form GSTR Sugam can be opted by the businesses who supply to both B2B as well as B2C. This implies that businesses who make outward supplies to registered businesses (B2B), as well as end consumers or unregistered business (B2B), can opt for Sugam

The details of B2B supplies need to be captured at invoice level in outward supplies annexure from where the details will be auto-populated to Form GSTR Sugam. The details B2C supplies should be reported at a summary level in Sugam returns. Similar to Sahaj, the details of ITC will be auto-populated from inward supplies annexure based on the invoices uploaded by the supplier.

3. Form GSTR Quarterly Return

This is similar to Sugam and the only difference is that if you are engaged in making exports including SEZ, you need to choose GST quarterly return form. The format of the quarterly form will be similar to monthly return form applicable to large taxpayers.

The details of B2B supplies along with exports need to be captured at invoice level in outward supplies annexure from which the details will be auto-populated to Form GSTR Quarterly return.  The details B2C supplies should be reported at a summary level.  Similar to Sugam, the details of ITC will be auto-populated from inward supplies annexure based on the invoices uploaded by the supplier.

Monthly Return

The Registered businesses with the turnover exceeding 5 Cr in the previous financial year should file the monthly return with payment of tax.  Here, the businesses are required to upload all the B2B invoices which in turn gets auto-populated in outward supplies annexure and then the details will get auto-captured in your monthly return. ITC will be available on the invoices uploaded by the supplier with an option to claim and report the missing invoices which are not uploaded by the supplier. The monthly return along with the payment need to be filed by 20th of the subsequent month.

Conclusion

The new GST return forms are designed keeping in mind the diversity of businesses operating in the country. The simplification in new GST return filing will be possible only when you chose the right type of new GST return suitable to your business. Therefore, it is utmost important for a business to carefully asses their vendors, type of supplies, customers etc. and chose the return which will simplify the compliance.

ITC on Goods in Transit

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In a business world, it is quite natural to have a situation where the date of supply of goods by the supplier and the date of receipt of goods are in two different months. Let’s say, the supplier has billed and dispatched the goods on March, 2018 but you have received the goods on 3rd April, 2018. In general, this situation is known as goods in transit. In this article, we will understand all about ITC on goods in transit.

How to handle goods in transit in GST

While the reasons are many for good in transit situation but what makes the situation a little difficult is the treatment of GST on goods in transit.
You must be wondering WHY? How it is different compared to the situation of goods billed and received on two dates but belongs to same month?

To answer, we need to understand the conditions prescribed in GST Law to claim ITC.

The following are conditions which the registered businesses need to fulfil to claim ITC.

  • You should have the Tax Invoice/Debit or Credit Note issued by a registered person.
  • The goods/services should have been received.
  • You should have filed GST Returns for the related month
  • The tax charged has been paid to the government by the supplier, either in cash or through utilization of ITC

If you closely look at the first 2 conditions, it clearly states that you should have a tax invoice and more importantly the goods in question should have actually received by you. To be more clear on GST on goods in transit,  let us discuss this considering the example used above.

The supplier has billed and dispatched the goods on March, 2018 but you have received the goods on 3rd April, 2018

In the above case, you will become eligible to claim ITC only in the month of April 2018. This is because, only when the invoice and the goods are received, will you be allowed to claim ITC. This is the current provision to claim ITC on goods in transit under GST.

Proposed changes – ITC on goods in transit under GST

With the proposed simplified GST Returns, the provision to claim ITC on goods in transit is simplified. The new proposal allows ITC claim on the date of invoice even if goods are in transit if the following conditions are met:

  1. Your supplier uploads the tax invoice to GST portal (outward supplies annexure) by 10th of the subsequent month.
  2. You should receive such goods before 20th of the subsequent month.

Let us understand this change of ITC on goods in transit under GST with some examples.

Scenario-1

Date of Invoice Date of Invoice Upload by the Supplier Date of Receipt of Goods by the Recipient
30th April,2019 8th May,2019 15th May,2019

In the above case, you will be eligible to avail the ITC in the Month of April, 2019 to be filed by 20th May, 2019. This is because, the invoice is uploaded by the supplier before 10th May, 2018 and the goods are received before 20th May, 2019 which is before the due date to file returns for the month of April, 2018.

Scenario-2

Date of Invoice Date of Invoice Upload by the Supplier Date of Receipt of Goods by the Recipient
30th April,2019 8th May,2019 25th May,2019

In the above case, you will not be eligible to avail the ITC in the Month of April, 2019 to be filed by 20th May, 2019. This is because, the goods are not received before 20th May, 2019 which is the due date to file returns for the month of April, 2018. You will be eligible to claim the ITC in the month of May, 2019 to be filed by 20th June, 2019.

Scenario-3

Date of Invoice Date of Invoice Upload by the Supplier Date of Receipt of Goods by the Recipient
30th April,2019 15th May,2019 9th May,2019

In the above case, you will not be eligible to avail the ITC in the Month of April, 2019 to be filed by 20th May, 2019. This is because, the invoice is uploaded by the supplier after the 10th of May, 2018. You will be eligible to claim the ITC in the month of May, 2019 to be filed by 20th June, 2019.

Conclusion

The simplification proposed on claiming ITC on goods in transit under GST will help the businesses in having an additional ITC claim on all those goods which are in transit but received before the due date of filing GST returns. It also helps in reducing the number of pending invoice compared to the existing provision of claiming ITC on goods in transit under GST.

New GST Input Tax Credit Rules

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Input Tax Credit is the heart of GST compliance for all taxpayers. It is the provision of input tax credit that ensures that taxpayers only need to pay GST on the value added to the goods or services supplied. In the first phase of GST implementation, taxpayers are required to claim input tax credit on a self-assessed basis, as declared in GSTR-3B. In the second phase of GST implementation, as discussed in our article ‘New GST return filing process’, input tax credit of each taxpayer will be arrived at based on the invoices uploaded by their suppliers and locked by them. Let us understand all about the new GST input tax credit rules.

New GST Input Tax Credit Rules – Mechanism

As per the new GST input tax credit rules, only an invoice uploaded by a supplier and locked by the buyer will be a valid document for claim of ITC by the buyer.

Suppliers must pay the tax liability on supplies made during a month by 20th of the next month. Suppliers will also have the facility to continuously upload invoices for their supplies to the GST portal. These invoices will be instantly shown to the buyers in the GST portal and can be locked by them. Input tax credit for a month will be arrived at based on the invoices uploaded by suppliers until 10th of the following month. Invoices uploaded by suppliers after 10th of the following month will be considered for ITC in the following month, as per the input tax credit rules under new GST returns.

Let us take an example to understand the input tax credit rules under new GST return:

Example: Super Cars Pvt Ltd supplies cars to Rakesh Automobiles. In April ’19, Super Cars Pvt Ltd makes the following supplies to Rakesh Automobiles:

Date of invoice Date of invoice upload by Super Cars Pvt Ltd Return in which Super Cars Pvt Ltd has to pay the liability Return in which Rakesh Automobiles can avail input tax credit
5th April ‘19 25th April ‘19 April ‘19 April ‘19
15th April ‘19 9th May ‘19 April ‘19 April ‘19
30th April ‘19 12th May ‘19 April ‘19 May ‘19

In the above table,

For the invoice dated 5th April ’19, Super Cars uploads the invoice on 25th April ’19. Super Cars has to pay the liability on the supply in the return for April ’19, as the supply has occurred in April ’19.  Rakesh Automobiles can also avail input tax credit on the supply in the return for April ’19, as Super Cars has uploaded the invoice by 10th May ‘19.

For the invoice dated 15th April ’19, Super Cars uploads the invoice on 9th May ’19. Super Cars has to pay the liability on the supply in the return for April ’19 as the supply has occurred in April ‘19. Rakesh Automobiles can also avail input tax credit on the supply in the return for April ’19, as Super Cars has uploaded the invoice by 10th May ’19.

For the invoice dated 30th April ’19, Super Cars uploads the invoice on 12th May ’19. Super Cars has to pay the liability on the supply in the return for April ’19 as the supply has occurred in April ‘19. Rakesh Automobiles can avail input tax credit on the supply in the return for May ’19, as Super Cars has uploaded the invoice after 10th May ’19.

Hence, taxpayers can expect a systematic and simplified process for claiming input tax credit in the next phase of GST implementation. However, the focus on the buyer’s input tax credit being based on the supplier’s invoice remains a key feature in the entire system. Hence, it is important for taxpayers to become aware of the input tax credit rules under new GST returns and choose their suppliers carefully.