The need for simplified GST return form and what to expect

The simplified GST return filing forms promises to reduce confusion among the taxpayers and decrease the number of returns from 36 to just 12 a year. MS Mani, Partner, Deloitte India, believes, with multiple changes there was a lot confusion regarding the GST return forms.
“Various businesses, whether big or small, were asking, ‘We are reaching the end of year one, but there is no transparency on filing the returns’. Many large businesses have to put these (forms) in their IT software, but they haven’t been able to do so due to the lack of clarity. Smaller businesses have been grappling with the return filing too because some find the process complex, while others lack the expertise to do it,” he says.

To make the process simpler, Mani suggests that there should be a common return which can be filed by everyone and can have various modules. For example, one for traders and other for exporters, and these can be sub-categorised again for exporters, importers, domestic traders and service providers.


“We are trying to fit many businesses in one form. If we continue to have one form, but have various modules in it then people can pick and choose. If a trader has domestic trading, and wants to use it, he goes to a certain section and that remains relevant for other traders. This kind of a modular approach will help everyone significantly in improving the compliance process too” he adds.

It is believed that, when the single return process rolls out, return filing dates will continue being different based on turnover. This will surely reduce the burden on IT infrastructure. The system is also expected to have automatic tax computation and calculation of input tax credit, making life easier for taxpayers.

Other details of the simplified forms include:

Onemonthly Return: All taxpayers excluding a few exceptions like composition dealer shall file one monthly return. Returnfiling dates shall be staggered based on the turnover of the registered person to manage load on the IT system. Composition dealers and dealers having nil transaction shall have facility to file quarterly return.

Unidirectional Flow of invoices: There shall be unidirectional flow of invoices uploaded by the seller on anytime basis during the month which would be the valid document to avail input tax credit by the buyer. Buyer would also be able to continuously see the uploaded invoices during the month.There shall not be any need to upload the purchase invoices also. Invoices for B2B transaction shall need to use HSN at four digit level or more to achieve uniformity in the reporting system.

Simple Return design and easy IT interface: The B2Bdealers will have to fill invoice-wise details of the outward supply made by them, based on which the system will automatically calculate his tax liability. The input tax credit will be calculated automatically by the system based on invoices uploaded by his sellers. Taxpayer shall be also given user friendly IT interface and offline IT tool to upload the invoices.

No automatic reversal of credit: There shall not be any automatic reversal of input tax credit from buyer on non-payment of tax by the seller. In case of default in payment of tax by the seller, recovery shall be made from the seller however reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc.

Due process for recovery and reversal: Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order. The process would be online and automated to reduce the human interface.

Supplier side control: Unloading of invoices by the seller to pass input tax credit who has defaulted in payment of tax above a threshold amount shall be blocked to control misuse of input tax credit facility. Similar safeguards would be built with regard to newly registered dealers also. Analytical tools would be used to identify such transactions at the earliest and prevent loss of revenue.

Transition: There will be a three stage transition to the new system. Stage I shall be the present system of filing of returnGSTR 3B and GSTR 1. GSTR 2 and GSTR 3 shall continue to remain suspended. Stage I will continue for a period not exceeding 6 months by which time new return software would be ready. In stage 2, the new return will have facility for invoice-wise data upload and also facility for claiming input tax credit on self declaration basis, as in case of GSTR 3B now.