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September 2020 is considered to be a significant month for any Financial Year as it includes major compliances under the Goods & Services Act. Here, I provide you with the list of activities which should be performed by a registered person under GST. Extension of Due Date of various Returns and reduction in the Interest and Late fees due to COVID -19 Pandemic The Government of India has extended various returns on account of the pandemic through reducing the interest amount and the late fees. The list of such extended returns are as follows:

1. Form GSTR-3B: Taxpayers with Turnover more than Rs. 5 crore:  Late fees has been reduced to maximum of Rs. 500 and Nil for Nil Returns, if the returns are filed till 30th September’2020

2. Forms GSTR-3B: Taxpayers having turnover less than Rs. 5 crores in previous FY in respect of States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep


Reconciliation of Outward Supplies made during the FY 2019-20 as per Books of Account with the Returns filed and adjusting/modifying the same Under GST, the last date to add any missing outward sales is the due date of filing return for the period of September’2020. Hence, the registered person shall undertake the reconciliation in order to find out any missing invoices which were left out during the period. Also, basis the reconciliation undertaken, if any invoices reported earlier are not correct, the same has to be adjusted/modified till the filing of GSTR-1/GSTR-3B for the month of September’2020. No amendment/addition of invoices are allowed after the due date of filing GST Returns for the month of September’2020.

GSTR-2A Reconciliation for FY 2019-20 Under GST Act, reconciliation means recording every transaction that took place during a period while also ensuring that the data filed by the supplier matches with those of the recipients. This enables one to make sure that no sales or purchases are missing or wrongly reported in the GST returns. So, it is compulsory for every taxpayer to reconcile their Input Tax Credit (ITC) with Form GSTR-2A at the end of every month/quarter of the Financial Year and avail the missed-out credit or reverse the excess ITC claimed earlier. 

Any left out ITC for the FY 2019-20 may be loss to the registered person if not claimed within the due date of filing GSTR-3B. In the course of the pandemic, the Government vide a notification has provided a condition that GSTR-2A reconciliation for the period February’2020 to September’2020 has to be undertaken cumulatively and total ITC availed in the GSTR-3B from February 2020 to September 2020 cannot exceed more than 10% of eligible credit available in GSTR-2A.

Reversal of ITC on account of Non-Payment of Consideration within 180 Days (Rule 37) This rule implies that when a registered person who has availed ITC could not pay the full value of inward supply along with the tax amount to the supplier within the time period of 180 days then the ITC claimed on such inward supply needs to be reversed and if a part of invoice amount is paid then ITC will be reversed on a proportionate basis.

The registered person shall do a creditor ageing as on 30th September, 2020 and ensure that there are no creditors which has not been paid for the supplies made in the year. Any amount pending to be payable to creditors for more than 180 days, the ITC on the same shall be reversed. Apportionment of ITC attributable to Exempt Supplies under Rule 42 & Rule 43 Rule 42 & Rule 43 states the procedure of apportionment of ITC in respect of inputs or input services or capital goods which attract the provisions of Section 17(2), being partly used for the purposes of business and partly for other purposes, or partly used for effecting taxable supplies including zero rated supplies and partly for effecting exempt supplies. The apportionment has to be undertaken on monthly basis while filing GSTR-3B of the relevant month. However, the apportionment shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year (i.e by the due date of GSTR-3B of September,2020 for FY 2019-20)

Overview of the New GST Return system
Under the New GST Return System, there is one main return proposed, called FORM GST RET-1, which will contain details of all supplies made, input tax credit availed, and payment of taxes, along with interest, if any. This return will have two annexures called FORM GST ANX-1 and FORM GST ANX-2.

FORM GST ANX-1 (Annexure of Supplies) will have details of all outward supplies, inward supplies that are liable to reverse charge, and import of goods and services, that needs to be reported invoice-wise (except B2C supplies) on a real-time basis.

FORM GST ANX-2 (Annexure of Inward Supplies) will contain details of all inward supplies, and will allow the recipient of supplies to take action on the auto-drafted documents uploaded by the supplier, which will be available to them on a real-time basis.

Currently, regular taxpayers are filing two returns called GSTR-1, which contains details of all outward supplies made; and GSTR-3B which is a monthly self-declaration of outward supplies, input tax credit availed and taxes paid.

What is the frequency of filing the new GST Returns?
The frequency of filing FORM GST RET-1 will be monthly, except in the case of small taxpayers (taxpayers with turnover up to Rs 5 crore in the previous FY), who can opt for the quarterly filing of returns. However, tax will need to be paid monthly in FORM GST PMT-08 by those taxpayers who have opted to file their returns quarterly.

 

 

Previous Timeline for transition to the New GST Return System

From July 2019, the new return system has been launched on a trial basis where, at present, the offline tool prototype GST ANX-1 is available for suppliers to upload invoices, and for the recipient of supplies to view and download the invoices of inward supply in the offline tool prototype GST ANX-2. This contains a specimen of the screen which will be made available once the actual offline tool gets launched on the GST Portal.

From July to September 2019, there will be a trial period for users familiarise themselves with the annexure forms of the New Return System i.e. FORM GST ANX-1 and FORM GST ANX-2. However, during this period, all taxpayers will continue to file their GSTR-1 and GSTR-3B returns.

From October 2019, FORM GST ANX-1 will need to be compulsorily filed by large taxpayers (annual turnover more than Rs 5 Crore), and this will replace the GSTR-1 return. In the case of Small taxpayers, they will need to file FORM GST PMT-08, which is the form for the self-declaration and payment of taxes.  Large taxpayers will continue filing their GSTR-3B returns for October and November 2019. 

For the month of December 2019, Large taxpayers will need to start filing FORM GST RET-01, which is the main return of the New Return System, and this needs to be filed by the 20th of January 2020. And for the Quarter October to December 2019, Small taxpayers will file their first FORM GST ANX-1 in January 2020.

Earlier announcement of month-wise applicability of New GST Returns:

The table given below gives the overview of how the transition was earlier planned for the New Return System:

new return system transition

* only view facility

How to migrate from present to new GST returns?

It is necessary for all businesses to keep track of all the invoices from now onwards to prevent incorrect claims while transitioning to new GST returns. It will then allow a seamless transition in April 2020.

Migration while Reporting of Sales

 

Included in Current GST?

Included in New GST ?

Required Actions and how ClearTax will Simplify these tasks

GSTR-1

GSTR -3B

ANX-1

RET-1

 Y

Y

N

N

Case of timely filing in which Enterprise has declared all docs in current regime.
Nothing to be done.

N

N

Y

 

          

         Y

Delayed filing use case where Enterprise has not included docs in both 1 and 3B

ClearTax will track the invoice and remind the user to upload it in ANX-1 which will be auto-populated in RET-1. Given delayed reporting of liability, Interest will be auto-calculated for declaring in RET-1.

 

Y

 

N

 

N

 

Y

Enterprise has uploaded invoices in GSTR-1, but not included in 3B.
ClearTax reminds the user to not upload it again in ANX-1. The tool calculates the liability to be declared in Section 3A (8) of RET-1 as it was not declared in 3B. Amount of interest due to delayed payment of liability will be auto-calculated by ClearTax.

 

N

 

Y

 

Y

 

Y

Since invoices were not declared in GSTR-1, ClearTax prompts to upload in ANX-1 which will be auto-populated in RET-1. 

Since liability already paid in 3B, ClearTax avoids double-payment of liability, via an auto-populated reversal in RET-1.

 

Migration while Reporting of Sales

 

Included in Current GST?

Included in New GST ?

Required Actions and how ClearTax will Simplify these tasks

GSTR-2A

GSTR -3B

ANX-2

RET-1

 Y

Y

N

N

Case of timely filing in which Enterprise has declared all docs in current regime.
Nothing to be done.

 

N

 

N

 

Y

 

    Y

Delayed filing use case where supplier has not uploaded in 2A and Enterprise has not 

claimed ITC in 3B.
Once it shows up in ANX-2, ClearTax will file through normal New GST process.

 

Y

 

N

 

N

 

Y

Case of missed claim of ITC in old regime. Invoice already present in GSTR-2A so will not show up in ANX-2. ClearTax tool will calculate and auto-populate the additional ITC to be claimed in section 4A (4) of RET-1 in the new regime.

 

N

 

Y

 

Y

 

Y

Case of missed claim of ITC in old regime. Invoice already present in GSTR-2A so will not show up in ANX-2. ClearTax tool will calculate and auto-populate the additional ITC to be claimed in section 4A (4) of RET-1 in the new regime.