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Understanding the Simplified GST Sahaj Return

The GST Sahaj return is a simplified quarterly filing option for small taxpayers, specifically those with an annual turnover up to Rs. 5 crores engaged primarily in B2C supplies. Introduced as part of new GST return system prototypes, it streamlines reporting while requiring monthly tax payments. This article provides a comprehensive overview of its components, eligibility criteria, filing schedule, and distinctions from other quarterly return types, incorporating the latest system updates.

📖 4 min read read🏷️ GST Returns

Understanding the Simplified GST Sahaj Return

In May 2019, the GST Portal unveiled a preview of an offline utility for the new simplified GST return system. This tool was designed to offer users a glimpse of the online portal's appearance and functionality. For taxpayers with an annual turnover below Rs. 5 crores, two distinct quarterly return types, SAHAJ and SUGAM, were introduced. This article specifically examines the GST ‘SAHAJ’ return, tailored for taxpayers primarily involved in Business-to-Consumer (B2C) supplies.

Latest System Update

As of March 14, 2020, the new GST return system is slated for implementation starting October 2020. Until September 2020, the existing return filing mechanism (GSTR-1, 2A, and 3B) will remain in effect. This timeline is subject to notifications from the Central Board of Indirect Taxes and Customs (CBIC).

What is GST SAHAJ?

GST SAHAJ represents a concise, single-page summary return intended for introduction in October 2019. This return option is available to taxpayers whose turnover in the previous financial year did not exceed Rs. 5 crores and whose business predominantly involves B2C transactions, meaning supplies to end-consumers and unregistered entities. Although the return is filed quarterly, tax payments must be remitted monthly via a challan.

Eligibility for GSTR SAHAJ Filing

Small taxpayers who have an annual turnover of up to Rs. 5 crores and exclusively engage in B2C supplies are eligible to opt for filing their quarterly returns using the GSTR SAHAJ form.

Components of the GSTR SAHAJ Form

The GSTR SAHAJ form is structured to capture various transactional details:

TableNameDetails
Table 1 and 2Basic informationEssential details such as GSTIN, trade name, legal name, ARN, and filing date are automatically populated.
Table 3Outward and reverse charge inward supplies summaryInformation on outward supplies to consumers and unregistered persons, along with inward supplies subject to reverse charge, is automatically transferred from Annexure 1. Any outstanding advances and liabilities from previous periods require manual entry.
Table 4Input Tax Credit (ITC) claim summaryAll relevant data for claiming ITC is pre-filled from Annexure 1 and 2. However, any ITC reversals must be entered manually.
Table 5TDS/TCS credit in electronic cash ledgerCredits from Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are reflected in the electronic cash ledger based on GSTR-7 and GSTR-8 filings by deductors.
Table 6Interest and late fee calculationThe system automatically calculates interest and late fees due to delayed return filing, late tax payments, or late uploading of prior period invoices. Taxpayers are responsible for self-assessing any other interest liabilities.
Table 7Tax paymentTax can be settled using available ITC, with any remaining balance paid in cash. However, liabilities arising from reverse charge, interest, and penalties must be paid entirely in cash.
Table 8Electronic cash ledger refund claimsDetails regarding refunds claimed from the electronic cash ledger are auto-populated.
Table 9VerificationTaxpayers confirm the accuracy of the provided information by digitally signing and submitting the return.

Important Considerations:

  • Only taxpayers engaged in B2C transactions within the domestic market are eligible for this return type.
  • For interstate outward supplies made during the tax period, the Place of Supply (POS) must be reported.
  • Input tax credit claimed in the first two months of the quarter will be adjusted against the total claim. A negative balance will be added to the quarter's liability.
  • Tax payments made in the initial two months of the quarter are adjusted against the quarter's overall tax liability.
  • Payments can be made using cash or credit as per prevailing rules.
  • Credit reversals under rules 37, 39, 42, and 43 should be reported net of any reclaimed ITC. Ineligible credit must also be classified as a reversal.
  • Adjustments related to transitioning from the composition scheme or other factors should be reported in Table 4 for ITC accounting purposes.
  • Reporting of the Harmonized System of Nomenclature (HSN) code is mandatory at a minimum of four digits.
  • A 'Nil' return can only be filed if Annexure 1 has not been uploaded and no details are automatically populated in Annexure 2.

Invoice Upload System

Recipients of supplies from small taxpayers can claim input tax credit only after the supplier uploads their invoices. Therefore, small taxpayers are provided with a facility to continually upload invoices. Invoices uploaded by the 10th of the subsequent month will make input tax credit available to recipients in the relevant month, aligning with the process for larger taxpayers who file monthly returns.

GSTR SAHAJ Filing Schedule

While GST Sahaj is a quarterly return, taxpayers are required to make their tax payments on a monthly basis.

Distinguishing SAHAJ, SUGAM, and Standard Quarterly Returns

Understanding the differences between the new simplified return types is crucial:

Return TypeApplicabilityFiling Profile
SahajSmall taxpayers making only B2C suppliesA predefined profile for quarterly returns.
SugamSmall taxpayers supplying to both consumers and businesses (B2C and B2B)A predefined profile for quarterly returns. See GST Sugam Return for more details.
Quarterly returnsSmall taxpayers involved in exports, imports, and supplies to B2C, B2B, and Special Economic Zones (SEZ)Not a predefined profile; taxpayers have the flexibility to create a customized profile for filing.

Insights into the New Simplified GST Returns

This section covers further details about the new simplified GST return system.

IMS: The Future of Compliance. Master your IMS workflow and stay ahead of the curve. Discover the Changes.

Further Reading

Frequently Asked Questions

What is the primary purpose of Goods and Services Tax (GST) in India?
GST was implemented in India to unify multiple indirect taxes into a single, comprehensive tax system, aiming to streamline tax administration, reduce cascading effects, and create a common national market.
Who is required to register under GST?
Businesses exceeding a specified aggregate turnover threshold (which varies by state and nature of supply) are generally required to register under GST. Additionally, certain businesses, regardless of turnover, must register, such as those making interstate taxable supplies or e-commerce operators.
What are the different types of GST levied in India?
India's GST system includes four main types: Central GST (CGST) and State GST (SGST) for intra-state supplies, Integrated GST (IGST) for inter-state supplies and imports, and Union Territory GST (UTGST) for supplies within Union Territories.
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 making taxable supplies. This mechanism helps avoid the cascading effect of taxes by ensuring that tax is paid only on the value addition at each stage of the supply chain.
What is the significance of HSN codes and SAC codes in GST?
HSN (Harmonized System of Nomenclature) codes are internationally recognized product classification codes used for goods, while SAC (Services Accounting Code) codes are used for services. These codes are crucial for classifying goods and services under GST, determining applicable tax rates, and ensuring uniformity in taxation.

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