Examining Differences in GST Return Systems: Old vs. New Provisions
The Goods and Services Tax (GST) return filing system in India has undergone significant revisions, impacting various reporting elements. This article provides a comprehensive comparison between the previous and current GST return frameworks, focusing on changes to HSN reporting, declarations for exempt, nil-rated, and non-GST supplies, and the handling of advances received. It also highlights how e-commerce operator supplies are reported, offering clarity on the implications of these adjustments for taxpayers.
The Goods and Services Tax (GST) return filing framework has undergone significant revisions. This article highlights less obvious but important alterations concerning elements such as Harmonized System of Nomenclature (HSN) summaries, non-GST supply declarations, advance payment records, e-commerce supply specifics, Tax Deducted at Source (TDS), and Tax Collected at Source (TCS). An important update from March 14, 2020, indicated that the revised GST return framework was scheduled for implementation in October 2020. Consequently, the existing return filing methods, specifically GSTR-1, GSTR-2A, and GSTR-3B, were to remain in effect until September 2020, pending official notification from the Central Board of Indirect Taxes and Customs (CBIC).
Comparing Previous and Current GST Return Systems
Below is a detailed comparison of additional GST return components under both the previous and the updated filing systems.
| Particulars | Old/Present System of Return Filing | New System of Return filing |
|---|---|---|
| HSN Reporting | Individual invoices generally did not require HSN codes. However, as per Central Tax notification 12/2017 (June 28, 2017), HSN disclosure depended on prior fiscal year annual turnover: no HSN for up to Rs 1 crore, 2-digit HSN for Rs 1 crore to Rs 5 crore, and 4-digit HSN for over Rs 5 crore. The annual return (Form GSTR-9) mandated an HSN-wise outward supply summary in Table 17 and an inward supply summary in Table 18 if turnover for a specific HSN code exceeded 10%. | Businesses with an annual aggregate turnover exceeding Rs. 5 crore, or those involved in exports, imports, and Special Economic Zone (SEZ) supplies, are required to submit 6-digit HSN level data. Other suppliers have the option to declare HSN codes. Notification 12/2017-Central Tax remains active until revoked by the CBIC, and GSTR-9 reporting continues as before, awaiting further announcements. |
| Exempt, Nil rated and Non-GST Supplies | Details concerning nil-rated, exempt, and non-GST outward supplies were reported in Tables 8A, 8B, 8C, and 8D of GSTR-1, as well as in Tables 3.1(b), (c), and (d) of GSTR-3B. | Form RET-1, specifically Tables 3D(1) and 3D(2), is used to declare tax-exempt or nil-rated supplies, and non-GST supplies (those outside GST law), respectively. Form ANX-1 does not include provisions for this reporting. Furthermore, Table 3D(2) of RET-1 also covers transactions listed in Schedule III, which are neither goods nor services. |
| Advances Received | Form GSTR-1's Tables 11A(1) and 11A(2) captured intra-state and inter-state advance payments, respectively, which triggered tax obligations upon receipt. Tables 11B(1) and 11B(2) were utilized to record advances from previous periods and offset them against current period supplies. | In RET-1, Table 3C(3) is for declaring taxable advances received, adjusted for any refund vouchers. This table also permits rectifying incorrect advance reporting from earlier periods. Table 3C(4) is used to document current-period invoices issued for advances received in prior periods, where tax was already remitted via that period's Table 3C(3) declaration. |
| E-commerce supplies/TDS/TCS | For significant inter-state taxable supplies (invoices over Rs. 2.5 lakhs), GSTR-1 Table 5 required a specific checkbox to be marked if supplies were facilitated by E-Commerce Operators (ECOs), along with the ECO's GSTIN. | ANX-1 Table 3 (3A to 3L) demanded declarations for various outward and inward supplies (including reverse charge and imports), and details of missing documents for credit claims. From these, Table 4 specifically required information for supplies made via ECOs (mandated to collect tax at source), including the ECO's GSTIN, supply value, returned supply value, net supply value, and tax amount. |
Ramifications of These Revisions
- HSN Reporting: The revised return system restricts mandatory HSN code reporting to fewer types of supplies. The increased turnover threshold of Rs 5 crore for mandatory reporting offers substantial relief to many businesses, although the underlying legal framework for HSN declarations is unchanged.
- Exempt, Nil-Rated, and Non-GST Supplies: Previously, exempted, nil-rated, and non-GST supplies necessitated reporting in both GSTR-1 and GSTR-3B. The new framework simplifies this, requiring these details to be reported just once in Form GST RET-1.
- Advances Received: While advance payment details were previously included in Form GSTR-1, the updated system shifts this requirement. Advances are no longer reported in Form GST ANX-1 but must be directly declared in Form GST RET-1.
- E-commerce Supplies/TDS/TCS: The procedure for reporting supplies made via E-commerce operators remains largely consistent between the old and new systems, with a dedicated section for these transactions.