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Understanding GSTR Sugam: Simplified GST Returns for Small Taxpayers

The GSTR Sugam form was proposed as a simplified quarterly GST return for small taxpayers in India, specifically those with an annual turnover up to Rs. 5 crores engaged in both B2B and B2C transactions. While the return itself is filed quarterly, tax payments are required monthly. The system includes detailed annexures for invoice reporting and streamlines input tax credit claims for recipients, offering a less complex filing mechanism compared to standard GST returns.

📖 4 min read read🏷️ Simplified GST Returns

The government released a prototype for an offline tool on the GST Portal in May 2019, providing users with a preview of its interface. The design of this tool was consistent with the online platform. A simplified GST return filing system, which included Sahaj and Sugam forms, was announced for taxpayers whose annual turnover was below Rs. 5 crores. These simplified returns required less information compared to standard taxpayer returns. As of March 14, 2020, the new GST return system was scheduled for implementation from October 2020, with the existing GSTR-1, 2A, and 3B system continuing until September 2020, subject to official notification from the Central Board of Indirect Taxes and Customs (CBIC).

What is GSTR Sugam?

GSTR Sugam was a proposed simplified return form that the GST Council intended to introduce starting October 2019. Taxpayers with an annual turnover of up to Rs. 5 crores in the financial year were given the option to file this return. This form was designed specifically for small taxpayers engaged in both business-to-business (B2B) supplies to GST-registered entities and business-to-consumer (B2C) supplies to end consumers or unregistered persons within India. During the 28th GST Council meeting, members approved quarterly GST return filings (Sahaj and Sugam) for small taxpayers with a turnover up to Rs. 5 crores, increasing the limit from the initial Rs. 1.5 crores. However, tax payments were still required monthly via a challan.

Who Can File GSTR Sugam?

Small taxpayers with an annual turnover not exceeding Rs. 5 crores, who conduct both B2B and B2C transactions, are eligible to opt for the GSTR Sugam form for their quarterly return filings.

Contents of GSTR Sugam

The GSTR Sugam structure encompasses two annexures and the main return form itself.

Notes on Annexures

  • The annexures must be uploaded before the return is filed for any tax period.
  • Details for invoices related to outward supplies made to registered persons (B2B) can be uploaded in real-time throughout the quarter.
  • This annexure does not support supplies made to international markets, only domestic B2C and B2B transactions.
  • The annexure can also be utilized to report debit and credit notes pertaining to B2B supplies.
  • Mandatory reporting of HSN codes at a minimum four-digit level is required.

Main Return Table

TableNameDetails
Table 1 and 2Basic DetailsGSTIN, trade name, legal name, ARN, and the date of filing are automatically populated.
Table 3Summary of Outward and Reverse Charge Inward SuppliesInformation regarding outward supplies to consumers and unregistered persons, along with inward supplies subject to reverse charge, is auto-populated from Annexure 1. Users must input details for advances and previous period liabilities.
Table 4Summary of Inward Supplies for ITC ClaimAll relevant data is automatically populated from Annexures 1 and 2. Manual entry is required for Input Tax Credit (ITC) reversals.
Table 5TDS/TCS Credit in Electronic Cash LedgerAmounts are credited to the electronic cash ledger based on returns submitted by deductors in Forms GSTR-7 and GSTR-8.
Table 6Interest and Late Fee LiabilityThe system automatically calculates interest and late filing fees for delayed return submission, late tax payments, and uploading prior period invoices. Any additional interest liabilities must be self-assessed by the taxpayer.
Table 7Tax PaymentTaxpayers can make payments by first utilizing ITC, with any remaining balance paid in cash. However, payments for reverse charge, interest, and penalties must be made exclusively in cash.
Table 8Refund Claim from Electronic Cash LedgerDetails are automatically populated from the electronic cash ledger.
Table 9VerificationTaxpayers confirm the accuracy of provided information by signing and filing the return.

Notes on Main Return

  • This return is exclusively for taxpayers conducting domestic B2C and B2B supplies.
  • Input tax credit claimed during the first two months of the quarter will be adjusted against the total. If the balance of the claim becomes negative, it will be added to the liability for the same quarter.
  • Tax paid during the initial two months of the quarter will be adjusted against the total liability for the entire quarter.
  • Payments can be made using cash or credit, adhering to applicable rules.
  • Credit reversals under rules 37, 39, 42, and 43 should be reported net of any reclaimed ITC. Ineligible credit must also be reported as a reversal.
  • Any ITC adjustments, such as those arising from a transition from the composition scheme or other reasons, should be reported in Table 4.

Invoice Upload System Explained

To enable recipients of supplies from small taxpayers to claim input tax credit, an online facility was provided for suppliers to continuously upload and view invoices on a daily basis. Invoices uploaded by the 10th of the subsequent month would become available as input tax credit to the recipient in that respective month, operating similarly to the system for large taxpayers who file monthly returns.

GSTR Sugam Filing Frequency

GSTR Sugam is required to be filed quarterly. However, taxpayers must ensure that tax payments are made monthly.

Differentiating Sugam, Sahaj, and Other Quarterly Returns

SahajSugamQuarterly Returns
Applicable to small taxpayers exclusively making B2C supplies.Applicable to small taxpayers engaging in both B2C and B2B supplies.Applicable to small taxpayers involved in exports, imports, and supplies to B2C, B2B, SEZ, etc.
Sahaj is a predefined quarterly return profile.Sugam is a predefined quarterly return profile.This is not a predefined profile; taxpayers can create a custom profile for filing.

Frequently Asked Questions

What is the Goods and Services Tax (GST) in India?
The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax levied on every value addition in India. It replaced multiple indirect taxes like excise duty, VAT, and service tax, aiming to simplify the tax structure and create a common national market.
Who is required to register for GST?
Businesses in India are generally required to register for GST if their aggregate annual turnover exceeds a specified threshold, which currently varies between Rs. 10 lakhs, Rs. 20 lakhs, or Rs. 40 lakhs depending on the state and nature of supply. Certain businesses are also mandated to register regardless of turnover.
What are the different types of GST in India?
There are four main types of GST in India: Central GST (CGST) levied by the Central Government, State GST (SGST) levied by State Governments, Integrated GST (IGST) levied by the Central Government on inter-state supplies and imports, and Union Territory GST (UTGST) for Union Territories without a legislature.
How does Input Tax Credit (ITC) work under GST?
Input Tax Credit (ITC) allows businesses to claim credit for the GST paid on purchases of goods and services used for business purposes. This credit can be used to offset the GST liability on their outward supplies, thereby avoiding the cascading effect of taxes.
What are the penalties for non-compliance with GST regulations?
Penalties for GST non-compliance vary depending on the nature of the offense. Common penalties include fines for late filing of returns, interest charges for delayed tax payments, and more significant penalties for tax evasion, incorrect invoicing, or failure to register when required.

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