The Goods and Services Network (GSTN) — the IT backbone for GST — on Wednesday launched the prototype for the new and simplified return filing system, which is aimed at familiarising businesses with the new processes before the eventual roll-out. However, the prototype launch is already delayed as the original plan was to introduce a pilot on April 1, followed by the new system on July 1.
Experts said that it is unlikely that new system would be introduced on July 1 as businesses have been given deadline for filing audit reports by June 30. “Assessees don’t have time to train staff for new system as it will require extensive changes in businesses processes,” Rajat Mohan, partner at AMRG & Associates, said.
The web-based prototype has also asked the shareholders for their comments on the functionality of the tool. In the proposed system of new GST return filing, a taxpayer with annual revenue over `5 crore is required to file monthly returns in form GST RET-1. For the assessees below the revenue threshold, they would file quarterly returns but pay self-assessed tax monthly.
The quarterly returns have been further divided into two — form GST RET-2 (sahaj) for those making supplies only to final consumers (B2C) and form GST RET-3 (ugam) for those selling only to other businesses (B2B). Further, annexure of sales (GST ANX-1) and annexure of inward supplies or purchases (GST ANX-2) will be filed as part of these returns. All the outward supplies will be detailed in GST ANX-1 while GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers GST ANX-1.
The new system promises to finally enable matching of invoices which has been touted as a key attribute in curbing evasion. Although the original return filing mechanism had the invoice-matching functionality, the cumbersome nature of the triplicate forms (GSTR-1, GSTR-2 and GSTR-3) coupled with glitches faced by GSTN forced the GST Council to put the system in abeyance only four months after the launch of the new indirect tax regime.
“The prototype does not make any arithmetic calculations but it provides a complete walk-through of the figures reported in the return forms,” Rahul Dhuparh, DGM, GST at Taxmann, said.
Further, the new system will also simplify return-filing for businesses with zero sales as they would now be required to file one ‘nil’ return for the entire quarter. Additionally, for those eligible to file quarterly returns can now do so through an SMS. However, the current summary return of GSTR-3B is likely to be retained till the new system stabilises.
Abhishek Jain, tax partner, EY India, said: “The companies would now need to ensure appropriate modifications are executed to their ERPs, business processes, etc. for culling out information to be disclosed and eligibility of input tax credits.”