India's Goods and Services Tax (GST) Council initiated a trial of the new GST return system in July 2019, with a complete rollout originally scheduled for April 2020. However, a recent update from March 14, 2020, announced that the new GST return framework would instead launch in October 2020. Until September 2020, the existing return filing methods, including GSTR-1, GSTR-2A, and GSTR-3B, remained in effect, subject to official notification from the Central Board of Indirect Taxes and Customs (CBIC).

Overview of the New GST Return System

The new Goods and Services Tax return framework introduces a primary return, FORM GST RET-1. This form will consolidate information on all outward supplies, utilized input tax credit, and tax payments, including any applicable interest.

FORM GST RET-1 is supported by two annexures: FORM GST ANX-1 and FORM GST ANX-2.

FORM GST ANX-1, the Annexure of Supplies, requires real-time, invoice-wise reporting of all outward supplies, inward supplies subject to reverse charge, and imported goods and services (excluding B2C transactions). Conversely, FORM GST ANX-2, the Annexure of Inward Supplies, displays details of all incoming supplies. It enables recipients to act upon auto-drafted documents uploaded by their suppliers, which are accessible instantly. Presently, standard taxpayers submit GSTR-1 for outward supply details and GSTR-3B as a monthly self-declaration for outward supplies, input tax credit, and tax payments.

Frequency of New GST Return Filings

The primary return, FORM GST RET-1, typically requires monthly submission. However, small taxpayers, defined as those with an annual turnover of up to Rs 5 crore in the preceding financial year, have the option to file their returns quarterly. Despite choosing quarterly filing for FORM GST RET-1, these small taxpayers are still obligated to remit their tax liabilities monthly using FORM GST PMT-08.

Earlier Transition Schedule for New GST Return System

A trial phase for the new return system began in July 2019. During this period, a prototype offline tool for GST ANX-1 was provided, allowing suppliers to upload invoices. Concurrently, recipients could use a prototype offline tool for GST ANX-2 to view and download inward supply invoices, offering a preview of the upcoming GST Portal functionality.

The period from July to September 2019 was designated as a trial phase for users to become acquainted with FORM GST ANX-1 and FORM GST ANX-2. Throughout these months, all taxpayers were required to continue submitting their GSTR-1 and GSTR-3B returns under the existing system.

Starting October 2019, large taxpayers (those with an annual turnover exceeding Rs 5 crore) were mandated to file FORM GST ANX-1, which superseded the GSTR-1 return. Small taxpayers, meanwhile, were required to submit FORM GST PMT-08 for self-declaration and tax payments. Large taxpayers continued to file GSTR-3B for October and November 2019.

For December 2019, large taxpayers were scheduled to commence filing FORM GST RET-01, the primary return of the new system, with a due date of January 20, 2020. Small taxpayers were set to file their initial FORM GST ANX-1 in January 2020, covering the quarter from October to December 2019.

Previously Announced Month-Wise Applicability of New GST Returns

The subsequent table outlined the initial transition strategy for the new return system.

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Transitioning to the New GST Returns

Businesses must meticulously track all invoices to prevent inaccuracies during the shift to the new GST return system, facilitating a smooth transition.