Difference between the current GST and the new GST return system in India?

Written by : Knowledge Centre Team

2024-08-02

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To help organise the multitude of complex taxes and deductions across the country, the Government of India introduced the Goods and Services Tax or GST, on July 1, 2017. Prior to GST, every state in the country had implemented their own collection of taxes with little to no transparency. The new GST tax scheme was launched with the purpose of serving as a ‘one nation, one tax’ solution.

However, while the GST scheme was launched with intention of integrating and simplifying taxes on goods and services across the board, it also led to a certain degree of confusion. Various businesses and entrepreneurs struggled with the new changes and found the current GST system to be complicated.

As a result, to further simplify the GST scheme and streamline the filing process, a new GST return system has recently been introduced. During the 37th GST Council Meeting, it was determined that the new GST return system will be implemented from April 2020. However, given the changing circumstances, the timeline for the same has been postponed.

According to the latest schedule, the new GST return system will be implemented in October 2020. This means that until September 2020, the current GST return filing system will remain in place with no alterations. However, as a taxpayer, it is vital to stay informed of the changes between the current GST return system and the new GST return system to be implemented from October 2020 onwards.

Here are some of the most important differences between the current GST return system and new GST return system:

GST in its current form will no longer be in existence. While taxable businesses in the current GST return system were expected to file multiple forms, the new system will have one main return.
The three essential GST forms currently in place, namely GSTR1, GSTR 2A, GSTR 3B will be done away with. Instead, there will be a single return form - the GST RET -1. This, in turn, has two annexures called the GST ANX-1 and GST ANX-2.
Out of the two new annexures, GST ANX-1 is relevant for outward supplies, import of goods and services and inward supplies subject to reverse charge. GST ANX-2 is relevant for details of inward supplies.
In the previous GST return system, the taxpayer was expected to file a GSTR-1 on a monthly basis if his annual turnover was higher than Rs. 1.5 crore. In all other cases, the taxpayer would file a quarterly

GSTR-1.

With the new GST return system, taxpayers with an annual turnover of more than Rs 5 crore are deemed large taxpayers. They are expected to file their GST ANX-1 on a monthly basis. Taxpayers with turnover of Rs 5 crore or less are deemed small taxpayers and can file their GST ANX-1 on a monthly or quarterly basis, depending on their own discretion.

A major difference between current GST return system and new GST return system to be implemented from October 2020 is the integration of the 24/7 invoice upload interface. With the aid of this interface, suppliers can upload their invoices in GST ANX-1 continuously. The deadline for the same are as a follows:

Monthly B2B invoice returns must be filed by the 10th of following month.
Quarterly invoice returns must be filed by the 23rd of the following month after a quarter.

Taxpayers can now also file amendment returns for the details reported in GST ANX-1 and its annexures. During a tax period, two amendment returns can be filed. Moreover, there is also a provision for shifting of specific GST filing documents. This is useful for situations where the correct document has been uploaded but in the wrong table .

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Overall, the new GST system is set to make filing, managing, amending and submitting GST returns easier and more convenient than before. Changes in tax filing systems such as this strive to improve and streamline the process, but require time and patience for adjustment. In view of constant changes in tax filing, it is important to ensure that your finances are secured for your and your family’s future needs.

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