Reporting Exports and Special Economic Zone Supplies Under New GST Return System: A Comparative Analysis
The article provides a comparative overview of reporting exports, supplies to SEZ, and deemed exports under India's old and new Goods and Services Tax (GST) return systems. It details the forms involved in the revamped system, specifically GST RET-1 and its annexures, GST ANX-1 and GST ANX-2. The content highlights crucial differences in reporting mechanisms, such as consolidated amendments, simplified payment bifurcation, the introduction of shipping bill details functionality, and a new column for refund claim intimation. These changes aim to streamline compliance for taxpayers engaged in international transactions.
The Goods and Services Tax (GST) return system underwent a phased implementation starting April 2020. This overhaul aimed to simplify the filing process by replacing multiple intricate forms with a singular, more streamlined return. The updated framework introduces a primary return, GST RET-1, supplemented by two annexures: GST ANX-1 for outward supplies and GST ANX-2.
Recent GST Council Meeting Updates
- The 47th GST Council meeting took place on June 28-29, 2022, in Chandigarh. Key outcomes included recommendations for rate revisions to boost revenue and rectify inversions, along with adjustments to the GST exemption list. Additionally, e-commerce suppliers and composition taxpayers received compliance relaxations.
- On December 31, 2021, the 46th GST Council meeting in New Delhi, chaired by Union FM Nirmala Sitharaman, decided to postpone the proposed GST rate increase to 12% for the textile sector.
- The 45th GST Council meeting was held on September 17, 2021. Discussions centered on extending tax concessions for COVID-19 essential goods, addressing GST compensation for states, and correcting inverted tax structures.
- The 43rd GST Council meeting on May 28, 2021, saw the approval of reintroducing the GST amnesty scheme. It also included rationalization of late fees for all taxpayers, particularly smaller ones, and an IGST exemption for imported COVID-19 treatment equipment and relief supplies until August 31, 2021.
New GST Return System Forms
The primary return, GST RET-1, consolidates information on both outward and inward supplies, including tax payments. GST ANX-1, known as the Annexure of Supplies, is dedicated to reporting outward supplies, inward supplies subject to reverse charge, and imported goods and services. Conversely, GST ANX-2, the Annexure of Inward Supplies, captures details of all inward transactions. Importantly, declarations for exports, deemed exports, and supplies to Special Economic Zones (SEZ) are made within GST ANX-1.
Data from these annexures automatically transfers to the main GST RET-1 return. For businesses with a previous financial year turnover under Rs.5 crore, simplified returns like GST RET-2 (Sahaj) and GST RET-3 (Sugam) are available. However, these simplified options do not accommodate export-related transactions. Consequently, taxpayers involved in exports or similar international dealings are required to file only GST RET-1, which can be submitted on a monthly or quarterly basis.
Reporting Exports, SEZ Supplies, and Deemed Exports in the Previous GST System
In the previous GST return framework, all information concerning exports, supplies to Special Economic Zone (SEZ) units or developers, and deemed exports was reported within Table 6 of the GSTR-1 return. The breakdown was as follows:
| Table No. | Particulars |
|---|---|
| 6A | Exports |
| 6B | Supplies to SEZ units/developers |
| 6C | Deemed exports |
Adjustments, debit/credit notes, and refund vouchers were declared in Table 9 of GSTR-1.
Declaring Exports, SEZ Supplies, and Deemed Exports in the Current GST Return Formats
Under the updated system, exports, supplies to SEZ units/developers, and deemed exports must be reported in specific tables of Form GST ANX-1:
| Table No. | Particulars |
|---|---|
| 3C & 3D | 3C – Exports involving tax payment; 3D – Exports without tax payment |
| 3E & 3F | 3E – Supplies to SEZ units/developers with tax payment; 3F – without tax payment (includes modifications) |
| 3G | 3G – Deemed exports (DE) (includes modifications) |
Subsequently, this data from GST ANX-1 is automatically transferred to the main GST RET-1 return, populating the following section:
| Table 3A | Particulars |
|---|---|
| 3 & 4 | Exports with/without tax payment (EXP) |
| 5 & 6 | Supplies to SEZ units with/without tax payment (SEZ) |
| 7 | Deemed exports (DE) |
Key Differences in Export Reporting Under the New GST Return System
The new GST return system introduces several notable changes for reporting exports compared to the previous GSTR-1 format:
- Consolidated Amendments: Unlike GSTR-1, which had a dedicated Table 9 for amendments, the new system allows modifications and edits to be reported directly within the original tables where exports, supplies to SEZ, or deemed exports were initially declared.
- Simplified Payment Bifurcation: Previously, exports, SEZ supplies, and deemed exports required separate reporting based on whether IGST was paid or not. The new system streamlines this by consolidating these requirements into a single table.
- Shipping Bill Details Functionality: A new feature in the updated return system allows for the reporting of Bill of Entry or Shipping Bill details, a functionality absent in the old system. This can now be done in the appropriate sub-tables under Table 3.
- Refund Claim Intimation: GST ANX-1 now includes a column titled "Would You Claim Refund?" This enables suppliers to inform authorities if they intend to claim an IGST refund. Marking 'No' in this column ensures that SEZ units or developers remain eligible to claim Input Tax Credit (ITC) and process refund claims for such credit after the export.
- Reporting under Bond/Letter of Undertaking (LUT): In the previous GSTR-1, export transactions conducted without IGST payment (under Bond/LUT) were reported with a "0" tax amount in Tables 6A and 6B. The new GST return system eliminates this specific requirement.