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.

6 Business Processes you can Automate

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In our previous blog, we had discussed about 5 things you need to keep in mind, while deciding when is the right time to automate your business. In case, you have decided to automate your business, you would obviously be eager to understand how to go about it. But before you get into automating your business, we would request you to take a step back, and think about – what to automate – in other words, which are the business processes worth automating.

Broadly speaking, any business, irrespective of segment or size, have primarily 6 business processes:

  • Purchase Cycle & Sales Cycle
  • Operating Expenses Management
  • Receivables and Payables Management
  • Cash Flow and Funds Flow
  • Inventory Management
  • Periodic Statutory Compliance

In our next few blogs, we will try to take up each of these topics and understand, how it will help you if you automate each of these processes. But before we do that, lets quickly go through each of these 6 business processes, to understand how each of them are linked to your business growth.

Things to Automate – 6 business processes to focus on

Purchase Cycle & Sales Cycle

The Purchase Cycle is the process of how you obtain and manage goods and services for your business. In case you are a manufacturer, it will be about procuring raw materials needed for manufacturing a product; in case you are a trader, it will be about obtaining goods for trade; in case you are a service provider, it will be about obtaining materials required to provide a service. It starts from placing a purchase order with your supplier and ends with you making the payment for the same, after the order is fulfilled.

On the other hand, the Sales cycle is the financial life blood for your organization. It basically determines how quickly an invoice or an order from a customer is translated into cash in your bank. In addition, it also determines the experience, perception and value add of the goods or service you are offering to your customer.

Operating Expenses

There are several expenses, you must be managing, while carrying out the day to day activities of your business. All these activities are not directly related with your core business activity, say – manufacturing, trading or services – but are crucial to keep your business running, and thus are classified as operating expenses. Popular examples of operating expenses include payroll, sales commissions, employee benefits, conveyance, amortization, depreciation, rent, repairs etc.

Receivables and Payables Management

Keeping track of your business outstandings, is extremely critical, as it impacts your cash flows. On one hand are your receivables – wherein you are expected to extend credits to your customers to maintain good business relationships; on the other hand, are your payables – wherein you are expected to pay up in time, in order to maintain your credit worthiness. Both receivables and payables need to be managed intelligently so that you are never in any kind of cash crunch.

Cash & Fund Flow Management

Two quick measures of your business performance are – cash flow & fund flow. Cash Flow is the difference in the amount of cash available at the beginning of a period (basically, your opening balance) and the amount of cash at the end of that period (your closing balance). In case your closing balance is higher than your opening balance, you are said to have a positive cash flow, and if it is the opposite, you are said to have a negative cash flow.

Funds Flow, on the other hand is a much broader view of your business, as it seeks to analyse the reasons for changes in your financial position. It deals with increase or decrease in your current assets or current liabilities. In other words, your funds flow statement tallies the funds generated from various sources with various uses to which they are put – which in turn impacts your working capital.

Inventory Management

In case your business deals with inventory, you will surely be concerned about maintaining an optimum amount of stock at all points in time – and that’s where inventory management steps in. The objective of inventory management is to provide uninterrupted production, sales, and / or customer service levels, at the minimum cost possible. This is something, which needs to be closely tracked, as a lack of inventory can lead to lost sales for you, whereas an excess of inventory and increase your costs unnecessarily.

Periodic Statutory Compliance

Last but not the least, complying with GST and other statutory norms is imperative for businesses in India. As you may have surely sensed in the last one and a half years of GST, staying compliant requires valuable work time, resources and continuous monitoring to avoid penalties.

Now that we have spent some time on the 6 main processes of your business, you must be able to see how intricately each of them are linked to your business growth. In fact, there is an opportunity for you to become efficient in each of these business processes – and over our next few blogs, we will try to suggest you some ways in which you can seek the help of technology to unlock further growth for your business.

Business Automation – 5 Things to Keep in Mind

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The world of business today, is abuzz with a plethora of hot topics – Big Data, Cloud, AI, IoT, Block Chain, Social media, Digital – to name a few. As the world is slowly turning towards digitising processes, one of the key things which has grabbed a lot of attention, is business automation.

What is Business Automation?

In simple terms, business automation is a way in which organisations take out the most complex and / or the most redundant steps from their day-to-day processes and streamline them for simplicity. It is basically an opportunity for you as a business to apply innovation and make your most critical business processes systematic, such that your business becomes more efficient, and your life become simpler. If you are looking for a yet simpler definition, automation can be viewed as that magical move – which cuts down costs, saves your time, prevents errors from happening and allows your human workforce to solve more intelligent problems, rather than spend time on routine, repetitive tasks.

Now, that we have tried to define automation from various angles, let’s ask some basic questions:

  • Is there any business in the world which would not like to cut costs?
  • Is there any business which would not like to save time, or avoid errors?
  • Is there any business in the world which would not like to have a simpler way of carrying out a complicated task?

Of course, everyone would love to.

But then, if that was the case, all businesses in the world, big or small, would have been automated since inception. A glance at the India MSME industry will easily reveal, that there is still a large chunk of businesses out there whose business processes are still driven manually. An important point to note here, is that automation does not necessarily mean owning a computer – there are sufficient instances of businesses having a computer, but then still using only some basic functionalities to handle one part of their business operations – be it sales, or purchases, or receivables and payables or inventory or banking – but not using it to integrate the entire business as one entity.

What holds businesses back from automating?

So, what holds them back? What could potentially stop a business in India today to automate its operations, when clearly the advantages are many?

Broadly, the reasons can be either or both of the following:

  • The automation required will require too much time, and the time spent on implementing automation, is much more than the time saved if automation happens
  • The automation required will require too much cost, and the cost spent on implementing automation, is much more than the cost reduced if automation happens OR the cost spent on implementing automation, is much more than the profits I stand to make if automation happens

In short, if you chose to base your decision on only time and money, then you can arrive quickly at an answer. If automation is quick and economical, you will adapt it nevertheless of your size. If automation is time consuming and costly, you will need to get into calculations, check whether it is worth it, and then take a call. And which is why, a valid question for all businesses to ask is – when is the right time to automate my business.

5 things to consider for Business Automation

For you to take a more informed decision regarding business automation, we have listed down 5 factors, which we are calling as the A,B,C,D & E of business automation.

Let’s see what these factors are:

  • Accountability – When you automate, you create an owner for each step of your business processes. All tasks are then bound to one or the other individual who is responsible for that task alone. Enabling that level of information transparency helps you to drive accountability across all stakeholders of your business. It also allows you to identify certain trends – which tasks are taking the longest, where do things get stuck most often etc.
  • Better Usage of Time – Automating your business helps you to identify redundant, unnecessary steps and processes and remove them. It allows you to identify those points where there is a wastage of time and resources. Not just that, repetitive tasks like compiling and re-compiling information, which do not require human skill or expertise can be weeded out and replaced with automated systems. When you begin to automate your processes it becomes very clear how much time people in your business spend, running around in circles – just because they don’t have the information they need, when they need it. By doing that, you will actually free up time for yourself and your resources, so that they can focus on strategic aspects related directly to your company’s core business. In other words, refocusing their time towards those activities, where technology cannot replace them.
  • Communication – An automated approach, allows for a more organised communication between your stakeholders and employees. So, the person handling sales, will be in sync with the person in inventory so that commitments are not made without the requisite stock being present; the person in charge of inventory will be in sync with the person handling purchases, so that sufficient inventory levels are maintained at all times, and so on and so forth. What this will allow you to do in the long run, is develop an improved responsiveness to the ecosystem around you. You will be able to respond to your suppliers and customers faster, thus boosting your competitiveness and leading to better management of your cash and funds flow.
  • Decision Making – Making any business decision, without considering all available information is more often than not a clear path to failure. Automating your business processes, will provide you with valuable information, which you will not be able to extract if you performed all the tasks manually or on disparate systems. Not only does it save time for you, but also allows you to analyse the data quicker and better. The higher the quality of data available, the better decisions you make, the more money and time you save.
  • Error Correction & Tracking – One of the many virtues of business process automation is, that you substitute human vulnerabilities with the accuracy of a machine. Late payments, slow sales approvals, incorrect tax returns and payments for goods never received are all very expensive errors, which can have an impact on the working capital of your business. More than the error itself, what tends to become more challenging is finding and correcting the error in future. Automation is thus a brilliant opportunity to avoid spending a lot of money, which could otherwise go down the drain, because of some error.

Now, that you have gone through the 5 factors listed above, ask yourself – Are these factors currently a challenge for me? Are these factors important to me and my business, at this point?

If the answer is “No”, you may still want to wait for some more time, for your business to grow further in terms of size, revenue, customers, before pressing the button for business automation. But if the answer is “Yes”, now is probably the right time to automate your business, than anytime else.

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.

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

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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

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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

New-GST-Returns

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.
gst returs

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

ITC-on-Goods-in-Transit-1

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.