Understanding and Filing GST Form RET-1: A Comprehensive Guide

In late 2018, the GST Council unveiled a revamped return system aimed at simplifying compliance. A trial version was launched in July 2019 to familiarize taxpayers with the changes. The existing system requires businesses to submit two monthly returns, GSTR-3B and GSTR-1, to declare outward and inward supplies and tax payments. However, the updated framework streamlines this process into a single primary return, FORM GST RET-1, supported by two annexures: FORM GST ANX-1 and FORM GST ANX-2.FORM GST ANX-1 is designed for reporting outward supplies, inward supplies subject to reverse charge, and imported goods and services. This information is typically provided invoice-wise, with the exception of business-to-consumer (B2C) transactions, and is updated continuously. Conversely, FORM GST ANX-2 details inward supplies, allowing recipients to accept, reject, or defer action on these documents.

Important Update: March 14, 2020

The new Goods and Services Tax return framework was scheduled for implementation starting October 2020. Until September 2020, the previous return filing structure, comprising GSTR-1, GSTR-2A, and GSTR-3B, remained in effect. This timeline was contingent upon official notification from the Central Board of Indirect Taxes and Customs (CBIC).

The Necessity and Advantages of Simplified GST Returns

The new simplified GST return system is built on the principle of a single consolidated return, with filing frequency determined by an entity's annual turnover. The introduction of these simplified returns is crucial due to several key benefits:

• These returns are profile-specific. While GST encompasses a wide range of supplies, most dealers transact in a limited number of categories. A profiling questionnaire tailors the GST return format to display only the fields relevant to a taxpayer's specific profile.
• Suppliers can continuously upload invoices in real-time, making them immediately accessible for the recipient to review and act upon.
• The streamlined forms and simplified filing procedures are expected to reduce compliance costs significantly.
• Taxpayers are permitted to amend their filed returns and can submit up to two amendment returns for each tax period.

Filing Frequency for GST RET-1

Any regular taxpayer involved in B2C or B2B supplies, inward supplies attracting the reverse charge mechanism, NIL-rated supplies, zero-rated supplies, or supplies facilitated by e-commerce operators, is eligible to file GST RET-1. Large taxpayers, defined as those with a turnover exceeding Rs 5 crore in the preceding financial year, must file this return monthly. In contrast, small taxpayers, with a turnover up to Rs 5 crore in the previous financial year, have the option to file their returns quarterly.

Detailed Components of Form GST RET-1

Form GST RET-1 consists of nine distinct sections:

1. GSTIN: Taxpayers are required to enter their Goods and Services Tax Identification Number (GSTIN).

2. Basic Details: Information such as the trade name and legal name will be automatically populated based on the provided GSTIN.

3. Summary of outward supplies, inward supplies subject to reverse charge, debit/credit notes, and tax liability: This table necessitates details of all outward supplies made to consumers and unregistered individuals. It also covers inward supplies where the reverse charge mechanism applies. Data for this table is automatically populated from Annexure 1. This summary is categorized into five parts:

• Taxable supplies to consumers and unregistered individuals will be auto-populated from table 3A of FORM GST ANX-1.
• Taxable supplies to registered individuals (excluding those subject to reverse charge) will be auto-populated from table 3B of FORM GST ANX-1.
• Exports made with and without tax payment will be auto-populated from tables 3C and 3D of FORM GST ANX-1, respectively.
• Supplies to SEZ units/developers with and without tax payment will be auto-populated from tables 3E and 3F of FORM GST ANX-1, respectively.
• Supplies to registered individuals categorized as deemed exports will be auto-populated from table 3G of FORM GST ANX-1.
• Liabilities related to the period before the current return filing system's introduction and any other liabilities. | | B | Details of inward supplies subject to reverse charge |
• Inward supplies attracting reverse charge will be auto-populated from Table 3H of Form GST ANX-1.
• Import of services will be auto-populated from Table 3I of Form GST ANX-1.

Note: In both scenarios, values will be net of debit/credit notes and advances on which tax was already paid at the time of payment. | | C | Details of debit/credit notes issued, advances received/adjusted, and other reductions in liabilities | The following should be reported here:

• Debit/Credit notes issued during the period for supplies not subject to reverse charge.
• Advances received for service supplies during the period, after accounting for refund vouchers.
• Adjustments made from previously reported advances.
• Reductions in tax liability due to a change from composition levy to normal levy. | | D | Details of supplies with no liability | The following supplies should be reported here:
• GST-covered supplies that are exempt from tax.
• NIL-rated supplies.
• Supplies not covered elsewhere.
• Outward supplies attracting reverse charge.
• Supplies by SEZ/developers to DTA (Domestic Tariff Area) on a bill of entry.
• Non-GST supplies.
• Supplies not specified in Schedule III. | | E | Total value and tax liability | The total value of supplies will be the sum of A+B+C+D, and the tax liability will be auto-populated. |

4. Summary of inward supplies for claiming ITC: This table requires comprehensive details of all purchases necessary for claiming Input Tax Credit (ITC). This information is automatically populated from Annexure 1 and Annexure 2. This summary is divided into five parts:

• Any eligible credit not previously claimed in Form GSTR-3B can be claimed here.
• Provisional credit on documents not uploaded by the supplier.

The following amounts will be auto-populated from GST ANX-1:

• Amount of credit involved in accepted and rejected documents.
• Amount of credit involved in pending documents.
• Credit distributed by an Input Service Distributor (ISD) and reported in FORM GSTR-6.

Additionally, these amounts will be auto-populated from GST ANX-1:

• Credit on inward supplies attracting reverse charge as reported in table 3H of FORM GST ANX-1.
• Credit on import of services as reported in table 3I of FORM GST ANX-1.
• Credit on import of goods from overseas as reported in table 3J of FORM GST ANX-1.
• Credit on imports of goods from SEZ units/developers as reported in table 3K of FORM GST ANX-1. | | B | Details of reversals of credit | The following amounts should be reported here:
• Ineligible credit.
• Reversal of ITC under Rule 37, 39, 42, and 43.
• Supplies for which documents were subsequently uploaded by the supplier, but the credit was provisionally claimed by the recipient.
• Documents rejected by the recipient after being accepted and filed by the supplier.
• Any other reversal. | | C | Net input tax credit available after reversal | This is the difference between the amounts in sections A and B above. | | D | ITC declared during the first two months of the quarter | This will be auto-populated from Form GST PMT-08 for the initial two months. Note: This table applies specifically to quarterly return filers. | | E | Net ITC available | This is the difference between sections C and D above, and this amount will be posted to the electronic credit ledger for utilization. |

5. Amount of TDS and TCS credit received in electronic cash ledger: Amounts will be credited to the electronic cash ledger based on returns filed by TDS deductors in Form GSTR-7 and TCS collectors in Form GSTR-8.

6. Interest and late fee liability details: The system automatically calculates interest and late filing fees resulting from delayed return submissions. Any other interest liabilities must be self-assessed by the taxpayer.

7. Payment of tax: A taxpayer is required to remit tax liability in cash after utilizing available ITC. However, all payments for interest or penalties must be made in cash.

8. Refund claimed from electronic cash ledger: This table's data will be automatically populated from the electronic cash ledger.

9. Verification: A taxpayer must verify all the information provided in the preceding tables by checking the designated box and signing the return. The return can only be filed after this verification process is completed.

Layout of Form GST RET-1

Understanding the Annexures to GST RET-1

Annexure 1 is structured into three main parts:

1. Basic Details: Information like GSTIN, trade name, and legal name will be automatically filled.
2. Details of outward supplies, inward supplies subject to reverse charge, and import of goods and services.
   This section includes tables 3A through 3L, which require various specific details such as:
   • Supplies made to consumers, registered individuals, and unregistered individuals.
   • Exports completed with or without tax payment.
   • Supplies to SEZ (Special Economic Zone) units made with or without tax payment.
   • Deemed exports.
   • Inward supplies that attract reverse charge.
   • Importation of services.
   • Importation of goods, among others.
3. Details of supplies made through e-commerce operators liable to collect tax under section 52.
   All supplies routed through e-commerce operators responsible for collecting tax at source must be reported in this table.

Annexure 2 is divided into four main sections:

1. Basic Details: Information such as GSTIN, trade name, and legal name will be automatically populated.
2. Details of inward supplies received from a registered person, imports, and supplies received from SEZ units/developers on Bill of Entry: This part requires various details, including supplies from registered persons, goods imported from SEZ, and goods imported from overseas against a bill of entry.
3. Summary of Input Tax Credit: This section provides an overview of all credits that have been accepted, rejected, or are pending action on the GST Portal.
4. ISD credits received: This table reports details of all credits claimed from an Input Service Distributor (ISD), organized by GSTIN.

The new GST return system was planned for a phased implementation. It underwent a trial period from July to September 2019, allowing taxpayers to become familiar with the updated mechanism and facilitate a smooth transition. From October 2019, the new return filing system commenced its phased rollout. Ultimately, Form GST RET-1 was slated to mandatorily replace GSTR 3B for all taxpayers starting January 2020.