GST is one of the most substantial tax reforms that India has ever seen. The continued success of GST depends mostly on the GSTN, which is the technology that powers it. The GSTN or the Goods and Service Tax Network is the technological backbone of the new regime.
Since GST was implemented in 2017, the GSTN has been responsible for the inter-communication between the taxpayers, the central government, the state governments, the tax authorities, and the banks.
GST has come a long way since then, and now a new Returns filing system is set to be implemented to simplify the process for taxpayers and tax authorities. The New Returns System was decided on during the 31st GST Council Meet.
Under the New Returns System, three different forms need to be filed. These files include the main return form, which is the GST RET-1 along with two annexures which are the GST ANX-1 and the GST ANX-2.
These return forms will need to be filed monthly for all taxpayers who are not small taxpayers. A small taxpayer is defined as those taxpayers whose yearly turnover is less than Rs. 5 crores. These taxpayers need only file the said returns every quarter.
Differences Between the Old System and the New System
Under the old system, taxpayers who had a turnover of less than Rs. 1.5 crores were considered to be small taxpayers. However, under the new system, taxpayers who have a turnover of less than Rs. 5 crores are going to be regarded as small taxpayers.
Hence, the number of taxpayers who are going to be considered small taxpayers has increased dramatically, and it will be easier for these taxpayers to file their returns.
The old returns system required taxpayers to file one of several types of GST forms depending on their type of business. These forms included GSTR- 1, GSTR- 4, GSTR-5, GSTR- 6, and so on.
However, this process has been simplified under the new GST returns system. Now, all taxpayers will be filing a single taxpayer form which is the GST RET-1 along with two annexure forms GST ANX-1 and GST ANX-2.
All the different categories of taxpayers that existed under the old system have now been put under the same bracket.
Amendments and Missing Invoices- Earlier, if you had to make an amendment to your returns you had missed filing specific invoices, you would need to wait for the subsequent tax period to make your changes.
Now, you can upload missing invoices and make amendments to your returns by merely filing an amendment return form.
Cancellation of Registration
Under the old system, a taxpayer had to file regular GST returns with the tax authorities even if they had applied for their registration to be cancelled.
Under the new system, once a taxpayer applies for their registration under GST to be cancelled, their account is suspended, and they do not need to file returns for that period.
Input Tax Credit
Earlier, the input tax credit could be claimed based on a self-declaration basis. However, now, the input tax credit can only be claimed based on the corresponding invoices of the supplier of the taxpayer.
Under the old system, you could only upload revenue invoices while filing your returns for outward supplies. Now, there is a system for continuous uploading of revenue invoices that can be done on a real-time basis.
As can be seen from the changes that have been made to GST returns systems, the new system allows for a much smoother and easier process for taxpayers.
How to File Your GST Invoices Online?
Invoice management is going to be a large part of the new returns system. Due to the changes that are being made in the filing system, e-invoicing will be a crucial part of the new system.
To upload your invoices into the new filing system, you need to be familiar with a few terms.
When a taxpayer claims ITC but the taxpayer’s supplier has not uploaded the corresponding invoice on the system, then the situation is called missing invoice. In such a case, the taxpayer needs to ensure that their supplier uploads the necessary invoice within the stipulated time frame.
In case the supplier does not file the necessary invoice within the given time frame, the amount of the ITC will be recovered by the tax authority.
Locking of Invoices
Under the new system, a recipient will have the option of locking an invoice. This means that the recipient is telling the tax authorities that they agree with the details that have been reported in such invoices.
In cases where there is a large volume of invoices, the system allows for deemed locking of invoices. All invoices which have not been kept as pending nor have been rejected will be considered to be locked.
Unlocking of Invoices
An invoice in which an ITC has been successfully claimed by a recipient will be deemed to be a locked invoice. A locked invoice cannot be amended. If an amendment needs to be made on a locked invoice, that invoice must first be unlocked.
In order to unlock an invoice, the recipient must enter the necessary information online which must be confirmed by a reversal of the ITC that has been made. Further, there must be an online confirmation.
There can be several kinds of pending invoice. An invoice is considered to be a pending invoice if the corresponding supply has not been made to the recipient, or if the recipient feels that the invoice needs to be amended, or if the recipient is unsure of availing ITC on that invoice. No ITC can be availed on an invoice that is still considered to be pending.
If a supplier incorrectly enters the GSTIN of the recipient, that invoice will be shown to a taxpayer who is not the intended recipient of the supplies. In such cases, the recipient of the invoice will need to reject those invoices.
If you have a business, then you need to learn how to navigate the new e-invoicing system. Due to the importance of creating e-invoices for your business under the new GST regime, you should consider getting a gst billing software free download and also pay attention to the latest gst news.