The New Return System is likely to be scrapped as per a recent announcement in one of the ASSOCHAM Webinar.
A senior GST Official who participated in a recent webinar of ASSOCHAM on July 23 2020, ’ASSOCHAM e-Conclave on 3 years of GST – Further streamline needed?’, suggested that the Government is looking at streamlining the existing GST Return System and will scrap the New Returns.
He also suggested that the Central Board of Indirect Taxes and Customs (CBIC) will in a week’s time come out with a notification about implementing e-invoicing, from 1 October 2020 only for businesses with turnover of Rs 500 CR or more. Earlier this was expected to go live for businesses with turnover of Rs. 100 CR and above.
Two years back, New Returns were proposed in the 27th GST Council meeting with an aim to simplify compliance for most of the taxpayers by introducing a single return filing model. The rollout which was expected to happen over a period of a year is postponing since then in the wake of non-readiness of the System.
In the recently held 39th GST Council Meeting, the New Returns were further postponed to 1st October 2020. However, in this webinar, it was announced that the GST Policy Wing is working on refining the current system itself in place of introducing a completely new system.
The refining will happen in two ways:
- Introduction of New Forms/New APIs (like GSTR 2B, Liability of 3B auto-compute from GSTR 1)
- Amending the Existing Forms (like GSTR 1)
Here is a list of changes expected:
1. GSTR 1
- Delinking of Invoice and Credit and Debit Notes: Once this change is implemented on GST portal, you would no longer need to provide invoice number as a reference in every debit or credit note.
- Additional data fields for CDN: Following additional Data Fields will be provided for Debit and Credit Notes
- Place of Supply
- Reverse Charge
- Invoice type (B2B, DE, SEWP, B2CL etc.)
- Modification in GSTR 1: Any modifications/update/change in GSTR-1 will be added along with their original invoices to avoid double accounting entries.
- Adding of Month to Amended Invoices: Status of ‘amendment in the invoice’ will be reflected along with the month in which the amendment was made.
2. GSTR 2A
- Delinking of Invoice and Debit and Credit Notes.
This will mean with delinking in GSTR1, when purchase invoices are populated in your GSTR 2A there will no longer be one to one (or many) mapping between debit or credit notes and invoice. Hence reconciliation by netting off credit notes against an invoice will not be possible.
- Expanded to include Import transactions details: Covers import transactions under bill of entry, from overseas as well as SEZ. This will include ITC auto-population from ICEGATE portal (for IGST paid at the time of Imports). Availability of import details will help to compute ITC claim while filing of 3B.
- Additional Info in GSTR 2A: Following additional info will be provided in GSTR 2A:
- GSTR3B filing status
- GSTR 1 filing period of the supplier, filing date of supplier
- Date of cancellation of supplier
- The period in which ‘original invoice’ is visible in case of amendment
- Type of amendment
From ITC claiming perspective, these are important data points. GSTR 2A fetch will have this extra information. However, it is unclear if this additional information will be available henceforth or also for the previous period invoices.
3. GSTR 2B
GSTR 2B is a new return to be introduced. Following functionalities can be expected:
- A static statement will be generated monthly. This will be in the PDF format as well as it can be mailed
- It is supposed to show Available and Unavailable ITC at Document-level
- ITC Summarization will be aligned with GSTR 3B
- Instant Download of PDF and Excel will be provided
- Filter and Search Options will be provided and there will be advanced search to view documents beyond 1000 records
- Filter and Search Options
4. GSTR 3B
- Auto-population of tax liability from GSTR1: Though prepared independently, these two returns- GSTR 1 and 3B, are linked. So far, taxpayers have been getting notices for discrepancies between GSTR 1 and 3B. With this feature (also as API) available, taxpayers will be in a better position to assess and monitor their own return data.
- ITC Calculation: Linking GSTR-2A/2B and ICEGATE data with ITC tables in GSTR-3B
- GSTR3B PDF: PDF Mail of filed GSTR-3B will also be available.
5. Other Changes
- Section 8A in GSTR 9 reflects “ITC as per GSTR-2A (Table 3 & 5 thereof)” which is non-editable. With GSTN providing the details, the invoices considered and not considered will now be made available.
- Delinking of Debit credit note with invoice will also be done in GSTR6 save and similarly GSTR 6A fetch data will also no longer have the invoice reference.
Disclaimer: The above-mentioned updates are subject to change as the official announcement is awaited from the government.
Apart from these, changes of similar nature are planned for returns which are filed by composition dealers and other taxpayers.
Being GSP, GSTN has shared their plan with us and the above changes will be released in staggered fashion from mid of July 2020 to mid of Aug 2020. The draft API specifications for these changes have been released, and some GSTR 1 and 2A APIs are also released on sandbox for testing.
Our analysis on specifications and testing on sandbox is on and we are sharing our observations with the GSTN team and some changes to the specifications could be expected.
The new changes will be implemented in IRIS GST in sync with the GSTN schedule and hence will be released incrementally. We are also exploring what more insights and value added features we can provide on top of the additional information which will now be available.
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- Take Actions on GSTR 1 data
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