28th GST Council Meeting | GST Return Simplification highlights

28th GST Council Meeting on GST Return Simplification

The 28th GST council meeting, the first meeting as GST enters its second year, was held under the Chairmanship of Shri Piyush Goyal.
In the previous GST council meeting, the principles and approach for return simplification had received a nod and a committee for finalising the return formats and process was formed. In the meeting today, the new return formats and processes were approved.

Let us understand the key aspects of the approved simplified GST returns

Scope and process for GST returns

There will be one monthly return to be filed by taxpayers, consisting of two sections
- Details pertaining to outward supplies
- Details for availing Input Tax Credit (ITC). ITC claim will be based on the invoices uploaded by the supplier
The principles as explained in the previous council meeting related to uploading of invoices by the supplier on a continuous basis and locking of invoices by the receiver for claiming ITC will be implemented. It is anticipated that this process could result in auto-population of the monthly return format to a large extent and thus ease the return filing process

As put forward by the Council, the process will be ‘UPLOAD – LOCK – PAY’ for most of the taxpayers.

Options for small taxpayers

For making the return filing further easy for small businesses, who form a majority of the registered taxpayers base, the filing frequency, format and methods are relaxed

Taxpayers with revenue below 5 crore will have an option to file on a quarterly basis. The payment of tax, however, would be monthly.
Nil returns can be filed through SMS.
Sahaj and Sugam, the returns for small taxpayers, will have lesser information from regular returns. The two forms would be catering to taxpayers who have only B2C transactions and the taxpayers who also supply to other registered taxpayers.

Amendments to the return

The current return filing process did not have the concept of filing a revised return and for any amendments, the invoices filed previously had to be amended.

The new process, however, will have a provision for amendment in returns itself. The taxpayers can file a revised return called as amendment return. This would allow them to make corrections in the data and accordingly in the tax payments and thus avoid any interest liability on tax payment if any.

Taxpayer Profile

Under GST, a taxpayer needs to obtain registration based on their nature of the business. Most of the taxpayers fall under the normal category, there are certain other types such as ISD, TDS etc. Even within normal taxpayers, the nature of business could vary.

In the new process, a provision to create a profile based on the nature of supplies made and received will be enabled. With this, only the information relevant for the profile will need to be provided.

The formats and process will also imply changes in the existing GST law and have been approved by the Council.

Overall the objective to simplify the filing process for majority taxpayers seems to be have been addressed. The linking of ITC to invoices uploaded by suppliers and option for small taxpayers to file their returns quarterly will require the suppliers and receivers to align their reporting and accounting cycles.

The new returns and process will definitely need better collaboration within the supply chain so that each of party can do timely compliance and ITC claim. Taxpayers should look for solutions which enable them to manage GST compliance in a simple, effective, and collaborative manner.

To read our coverage on the previous Council Meet decisions, you may refer here:

27^th GST Council Meeting

Other GST Council Meeting

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