DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE
Returns under Goods and Services Tax Act, 2017 - An analytical study

SUBJECT
Law of Taxation-II

NAME OF THE FACULTY

Ast. Prof. Sree Sudha

NAME OF THE STUDENT

RELANGI JASHWANTH
2017LLB113

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 ACKNOWLEDGMENT

The project consumed huge amount of work, research and dedication. Still, implementation
would not have been possible without support of my professor. I take this opportunity to
express my profound gratitude and deep regards to my lecturer for his exemplary support,
monitoring and constant encouragement throughout the course of thesis.

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 CONTENTS

Introduction………………………………………………………………………………..4
Difference Between Current Vs New GST Return Systems…………………………….5

OVERVEIW OF THE NEW GST RETURN SYSTEM………………………………..6

Important Changes Introduced In The New GST Returns System……………………7

Input Tax Credit (ITC) Under The GST Return System……………………………….9

Form And Manner Of Submission OF Returns…………………………………………10

Provisions Relating To A GST Practitioner……………………………………………..11

CONCLUSION……………………………………………………………………………15

BIBLIOGRAPHY…………………………………………………………………………16

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Introduction:
In the 31st GST Council Meet, it was decided that a New Return System under GST would
be introduced for taxpayers. This return system will contain simplified return forms, for ease
of filing across taxpayers registered under GST. Under this New Return System, there will be
one main return GST RET-1 and 2 annexures GST ANX-1 and GST ANX-2. This return will
need to be filed on a monthly basis, except for small taxpayers who can opt to file the same
quarterly. Small taxpayers are taxpayers with a turnover up to Rs 5 crore in the preceding
financial year.

The main return GST RET-1 will contain details of all supplies made, input tax credit
availed, and the payment of taxes, along with interest, if any. This return will contain two
annexure forms namely GST ANX-1 and GST ANX-2.  GST ANX-1 (Annexure of Outward
Supplies) is for reporting details of all outward supplies, inward supplies liable to reverse
charge, and import of goods and services, that will need to be reported invoice-wise (except
for  B2C supplies) on a real-time basis. GST ANX-2 (Annexure of Inward Supplies) will
report details of all inward supplies. Most of these details will be auto-drafted from the details
uploaded by the suppliers in their GST ANX-1. The recipient of supplies will be able to take
action on these auto-drafted documents, which will be available to them on a real-time basis.

IGST ACT means any transaction relating to Inter-State supply of goods and services or both
between two taxable persons (Previously CST Sales or Purchases) situated in different States
now treated as IGST transaction under Integrated Goods and Services Tax (IGST) Act, 2017.
As per Article 269A (1) of Constitution of India inserted by on 16.09.2016, tax is imposed on
such transactions by the Government of India and also IGST tax leviable on imports.

As per Section 2(12) of IGST Act, 2017, integrated tax means the integrated goods and
services tax levied under IGST Act,2017.

The rate of IGST Tax is double the CGST rate. IGST and CGST rates will be same all over
India and there are no differences in IGST rates between States to State. IGST is payable on
inter-State stock transfers and branch transfers etc.  The basic aspects of IGST are as follows:

I. IGST is payable on supply of goods or services or both in inter-State supplies,

II. IGST is intermediary tax mainly on business to business (B2B) transactions. It is not
envisaged as final tax since input tax credit of IGST will be available to recipient in another
State.

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 III. If IGST is paid on Business to Customers ( B2C) transactions , the State where goods or
services or both are consumed will get their share of SGST.

IV. IGST Rate is double the CGST rate and will be uniform al over India.

V. IGST will ensure that goods or services or both and taxes move together across the
country, which will ensure seamless and tax free movement of goods and services within the
country.

VI. In view of IGST , there will be no need to claim refund of input taxes, except in case of
physical exports and supplies to SEZ.

VII. Export and supplies to Special Economic Zones (SEZ) are zero rated .so, Input Tax
Credit is available even if tax is not paid on output. This will make exports and supplies to
SEZ actually tax free.1

Difference Between Current Vs New GST Return Systems

Old Return-filing System  New Simplified Return System

Taxpayers considered small if turnover is up to Taxpayers considered small if turnover is up to

Rs 1.5 crore in the preceding financial year, Rs 5 crore in the preceding financial year,
otherwise considered large taxpayers otherwise considered large taxpayers

Multiple return forms to be filed depending on A single simplified main return form GST RET-1
the category of taxpayers, such as – GSTR- containing 2 annexures GST ANX-1 and GST
1, GSTR-4, GSTR-5, GSTR-6, GSTR-7, etc ANX-2 to be filed by all categories of taxpayers

Revenue invoices can be uploaded only at the A mechanism for the continuous upload of
time of filing of returns of outward supplies revenue invoices on a real-time basis

Input tax credit could be claimed on a self- Input tax credit can be claimed based on invoices
declaration basis uploaded by the supplier

1
https://cleartax.in/s/gst-returns

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Missing invoices and amendments, if any, Missing invoices and amendments, if any, can be
could only be made in the return of the made by filing an Amendment Return
following tax period 

Taxpayers have to file GST returns until their Registration will now be suspended, in cases
registration has been cancelled, even if an where a taxpayer has applied for cancellation of
application for cancellation of registration has registration, and returns will not need to be filed
been submitted for this period

OVERVEIW OF THE NEW GST RETURN SYSTEM

Under the New GST Return System, there is one main return proposed, called FORM GST
RET-1, which will contain details of all supplies made, input tax credit availed, and payment
of taxes, along with interest, if any. This return will have two annexures called FORM GST
ANX-1 and FORM GST ANX-2.

FORM GST ANX-1 (Annexure of Supplies) will have details of all outward supplies, inward
supplies that are liable to reverse charge, and import of goods and services, that needs to be
reported invoice-wise (except B2C supplies) on a real-time basis.

FORM GST ANX-2 (Annexure of Inward Supplies) will contain details of all inward
supplies, and will allow the recipient of supplies to take action on the auto-drafted documents
uploaded by the supplier, which will be available to them on a real-time basis.

Currently, regular taxpayers are filing two returns called GSTR-1, which contains details of
all outward supplies made; and GSTR-3B which is a monthly self-declaration of outward
supplies, input tax credit availed and taxes paid.2

TRANSITION PLAN OF THE NEW GST RETURN SYSTEM

The New GST Return System has been launched on a trial basis from July 2019, and the full-
fledged system will be put into place from April 2020 (earlier: October 2019). This transition
plan will be carried out in a phased manner. The trial phase will be for users to familiarise
themselves with the annexure forms of the new return system.

2
Ibid

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The transition plan that was previously announced was as follows:

From July to September, during the trial phase, taxpayers will continue to file their GSTR-1
and GSTR-3B returns as per the current system in place. From October 2019, GST ANX-1
will need to be filed by large taxpayers, which will replace the GSTR-1 return. However,
GSTR-3B will still need to be filed up to November 2019. In the case of small taxpayers.
they will need to pay taxes using PMT-08, which will replace their GSTR-3B return.

From December 2019, large taxpayers will have to start filing GST RET-01, the main return
under the new return system. For small taxpayers, their first GST RET-01 will need to be
filed for the quarter of October-December 2019.3

Offline Demo Tool Prototype

The GST Network (GSTN) has introduced an interactive web-based prototype of the Offline
Tool of the new return system. With this demo version of the prototype, a taxpayer will be
able to navigate across different pages. This prototype will also allow a user to experience
various functionalities such as drop-down menus, upload of invoices, upload of the purchase
for verifying with inward supplies (system-created), etc.

A taxpayer will be able to analyse and experience the practical aspects of the simplified GST
returns with this prototype. A user can then share feedback or suggestions with the GSTN. 

Important Changes Introduced In The New GST Returns System

These are some of the changes introduced in the new return system-
 Harmonized System of Nomenclature (HSN) code will be needed in order to submit
details at a document level (on the basis of turnover) versus a separate HSN summary.
 A user will also get HSN via his GST ANX-2, wherever a supplier was supposed to
declare the HSN code.
 B2B supplies, liable to reverse charge mechanism need not be shown by the supplier
in the GST ANX-1, however, the aggregate figure will need to be shown in GST
RET-1.
 Inward supplies which are liable to RCM has to be declared in GST ANX-1 at the
GSTIN level, by the recipient of supplies.

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https://cleartax.in/s/gst-returns

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  The concept of B2C-L has been removed. The turnover limit for quarterly filers
(small taxpayers) will be considered as Rs 5 crore versus the present limit of Rs 1.5
crore.
 A recipient can report missing invoices at an invoice level (that is when a supplier has
not uploaded an invoice in T+2 period).

Upload Of Invoices Under The GST Return System

There are several terms introduced in the new return system, with regard to the upload of
invoices–

  Missing invoices:

Whenever a supplier has not uploaded an invoice or a debit note, and a recipient claims ITC,
it will be termed as “missing invoices”. When ITC is availed on missing invoices by a
recipient, and these missing invoices do not get uploaded by the supplier within the stipulated
time frame, then the ITC availed with respect to such debit notes/invoices will be recovered
from the recipient. 

Locking of invoices:

A recipient will have the option to lock in an invoice, if he agrees with the details reported in
that invoice. If there is a huge volume of invoices, it may not be practical to lock in individual
invoices, and in such cases, deemed locking of invoices will be done on those invoices
uploaded which are neither rejected nor have been kept as pending by recipient.

  Unlocking of the invoices:

An invoice on which ITC has already been availed by a recipient will be considered a locked
invoice, and will not be open for amendments. In case an amendment needs to be made to a
particular invoice, the supplier will have to issue a debit or a credit note. An incorrectly
locked invoice can be unlocked by the recipient online, subject to a reversal of ITC claim
made, and an online confirmation thereafter.4 

  Pending invoices:

An invoice which has been uploaded by a supplier, however one of the following scenarios
applies to that invoice:

 The recipient has not received the supply

4
https://cleartax.in/s/cgst-rules-chapter-8-returns

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  The recipient is of the opinion that there is a need for an amendment in the invoice
 The recipient is unsure about availing ITC for the time being

An invoice in such cases will be marked pending by the recipient, and no ITC will be availed
by a recipient on these pending voices. 

  

Rejected invoices:

When the recipient’s GSTIN is filled incorrectly by the supplier, the invoice will be visible
for a taxpayer who is not the receiver of such supplies. As ITC will not be eligible to be taken
on these invoices, the recipient will need to reject these invoices. To make the task of
rejecting invoices hassle-free, the matching IT tool will have the option to create a
recipient/seller master list via which the correct GSTIN can be identified.

Input Tax Credit (ITC) Under The GST Return System

Availing of ITC will depend on uploading of invoices or debit notes by the supplier, within
the stipulated time frame. An invoice uploaded by the supplier within the 10th of the
following month will be visible continuously for the recipient. The taxes payable thereafter
which can be claimed as ITC will be posted in the ITC table of the recipient’s return before
the 11th of the following month. These invoices will be available for availing ITC in the
return which is filed by the recipient. Invoices that are uploaded by the supplier after the 10th
of the following month will get posted in the concerned field of the recipient’s return of the
subsequent month, however, the viewing facility will be on a continuous basis.5

Amendment Returns

Under the new return system, a taxpayer will be allowed to file two amendment returns for
each tax period. A taxpayer will also be allowed to make payment through an amendment
return, which in turn will help the taxpayer in saving on his interest liability. In case ITC is
available in the taxpayer’s electronic credit ledger (ECL), it can be utilised for paying the
liability in the amendment return. The amendment of a missing invoice which is reported

5
https://cleartax.in/s/cgst-rules-chapter-8-returns

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later by a supplier can be done via an amendment return of the concerned tax period to which
the invoice belongs. 

In case a recipient has acknowledged and locked an invoice, amendment of that invoice will
not be allowed. To amend any specific value of a locked invoice, either a supplier will have
to raise a debit/credit note, or a supplier can seek the help of the recipient in unlocking the
invoice so that he will be able to make an amendment by filing an amendment return.
Amendment of a GST invoice will be allowed only if ITC has not yet been availed by the
recipient.

Form And Manner Of Submission OF Returns

(1) Every registered person required to deduct tax at source under

section 51 (hereafter in this rule referred to as diductor) shall furnish a return in FORM
GSTR-7 electronically through the common portal either directly or from a Facilitation
Centre notified by the Commissioner.

(2) The details furnished by the diductor under sub-rule (1) shall be made
available electronically to each of the suppliers in Part C of FORM GSTR-2A and FORM-
GSTR- 4A on the common portal after the due date of filing of FORM GSTR-7.

(3) The certificate referred to in sub-section (3) of section 51 shall be

made available electronically to the deductee on the common portal in FORM GSTR-7A on
the basis of the return furnished under sub-rule (1).6

ANNUAL RETURN

(1) Every registered person, other than an Input Service Distributor, a person paying tax
under section 51 or section 52, a casual taxable person and a non-resident taxable person,
shall furnish an annual return as specified under sub-section (1) of section 44 electronically in
FORM GSTR-9 through the common portal either directly or through a Facilitation Centre
notified by the Commissioner:

Provided that a person paying tax under section 10 shall furnish the annual return in FORM
GSTR-9A.

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(2) Every electronic commerce operator required to collect tax at source
under section 52 shall furnish annual statement referred to in sub-section (5) of the said
section in FORM GSTR -9B.

(3) Every registered person whose aggregate turnover during a financial

year exceeds two crore rupees shall get his accounts audited as specified under sub-
section (5) of section 35 and he shall furnish a copy of audited annual accounts and a
reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the
common portal either directly or

through a Facilitation Centre notified by the Commissioner.

Final return. - Every registered person required to furnish a final

return under section 45, shall furnish such return electronically in FORM GSTR-10 through
the common portal either directly or through a Facilitation Centre notified by
the Commissioner.7

Provisions Relating To A GST Practitioner

(1) An application in FORM GST PCT-01 may be made electronically through the common
portal either directly or through a Facilitation Centre notified by the Commissioner for
enrolment as goods and services tax practitioner by any person who,

(i) is a citizen of India;

(ii) is a person of sound mind;

(iii) is not adjudicated as insolvent;

(iv) has not been convicted by a competent court;

and satisfies any of the following conditions, namely:-

(a) that he is a retired officer of the Commercial Tax Department of any

State Government or of the Central Board of Excise and Customs, Department of Revenue,
Government of India, who, during his service under the Government, had worked in a post
not lower than the rank of a Group-B gazetted officer for a period of not less than two years;
or

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(b) that he has enrolled as a sales tax practitioner or tax return preparer
under the existing law for a period of not less than five years;

(c) he has passed,

(i) a graduate or postgraduate degree or its equivalent examination

having a degree in Commerce, Law, Banking including Higher Auditing, or

Business Administration or Business Management from any Indian University established by

any law for the time being in force; or

(ii) a degree examination of any Foreign University recognised by

any Indian University as equivalent to the degree examination mentioned in sub-clause (i); or

(iii) any other examination notified by the Government, on the

recommendation of the Council, for this purpose; or

(iv) has passed any of the following examinations, namely:-

(a) final examination of the Institute of Chartered Accountants of India; or

(b) final examination of the Institute of Cost Accountants of India; or

(c) final examination of the Institute of Company Secretaries of India.

(2) On receipt of the application referred to in sub-rule (1), the officer

authorised in this behalf shall, after making such enquiry as he considers necessary,
either enrol the applicant as a goods and services tax practitioner and issue a certificate to
that effect in FORM GST

PCT-02 or reject his application where it is found that the applicant is

not qualified to be enrolled as a goods and services tax practitioner.

(3) The enrolment made under sub-rule (2) shall be valid until it is
cancelled:

Provided that no person enrolled as a goods and services tax practitioner

shall be eligible to remain enrolled unless he passes such examination conducted at such
periods and by such authority as may be notified by the Commissioner on
the recommendations of the Council:

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Provided further that no person to whom the provisions of clause (b) of
sub-section (1) apply shall be eligible to remain enrolled unless he passes the
said examination within a period of one year from the appointed date.

(4) If any goods and services tax practitioner is found guilty of

misconduct in connection with any proceedings under the Act, the authorised officer may,
after giving him a notice to show cause in FORM GST PCT-03 for such misconduct and after
giving him a reasonable

opportunity of being heard, by order in FORM GST PCT -04 direct that he
shall henceforth be disqualified under section 48 to function as a goods and services
tax practitioner.8

(5) Any person against whom an order under sub-rule (4) is made may, within thirty
days from the date of issue of such order, appeal to the Commissioner against such order.

(6) Any registered person may, at his option, authorise a goods and
services tax practitioner on the common portal in FORM GST PCT-05 or, at any
time, withdraw such authorisation in FORM GST PCT-05 and the goods and services
tax practitioner so authorised shall be allowed to undertake such tasks as indicated in the said
authorisation during the period of authorisation.

(7) Where a statement required to be furnished by a registered person has

been furnished by the goods and services tax practitioner authorised by him, a confirmation
shall be sought from the registered person over email or SMS and the statement furnished
by the goods and services tax practitioner shall be made available to the registered person on
the common portal:

Provided that where the registered person fails to respond to the request
for confirmation till the last date of furnishing of such statement, it shall
be deemed that he has confirmed the statement furnished by the goods and services
tax practitioner.

(8) A goods and services tax practitioner can undertake any or all of the
following activities on behalf of a registered person, if so authorised by him to-

(a) furnish the details of outward and inward supplies;

(b) furnish monthly, quarterly, annual or final return;

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(c) make deposit for credit into the electronic cash ledger;

(d) file a claim for refund; and

(e) file an application for amendment or cancellation of registration:

Provided that where any application relating to a claim for refund or an

application for amendment or cancellation of registration has been

submitted by the goods and services tax practitioner authorised by the registered person,
a confirmation shall be sought from the registered person and the application submitted
by the said practitioner shall be made available to the registered person on the common portal
and

such application shall not be proceeded with further until the registered
person gives his consent to the same.

(9) Any registered person opting to furnish his return through a goods and services
tax practitioner shall-

(a) give his consent in FORM GST PCT-05 to any goods and services tax

practitioner to prepare and furnish his return; and

(b) before confirming submission of any statement prepared by the goods and services tax
practitioner, ensure that the facts mentioned in the return are true and correct.

(10) The goods and services tax practitioner shall-

(a) prepare the statements with due diligence; and

(b) affix his digital signature on the statements prepared by him or

electronically verify using his credentials.

(11) A goods and services tax practitioner enrolled in any other State or
Union territory shall be treated as enrolled in the State or Union territory for the
purposes specified in sub-rule (8).

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 CONCLUSION

A return is a document containing details of income which a taxpayer is required to file with
the tax administrative authorities. This is used by tax authorities to calculate tax liability.

Under GST, a registered dealer has to file GST returns that include:

 Purchases
 Sales
 Output GST (On sales)
 Input tax credit (GST paid on purchases)

To file GST returns or GST filing, GST compliant sales and purchase invoices are required.
In the GST regime, any regular business has to file two monthly returns and one annual
return. This amounts to 26 returns in a year. The number of GST filings vary for quarterly
GSTR-1 filers. The number of GST filings online for them is 17 in a year. There are separate
returns required to be filed by special cases such as composition dealers whose number of
GST filings is 5 in a year.

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BIBLIOGRAPHY

https://cleartax.in/s/gst-returns

https://cleartax.in/s/cgst-rules-chapter-8-returns

https://taxguru.in/goods-and-service-tax/returns-cgst-act-2017-rules.html

https://www.cbic.gov.in/resources//htdocs-cbec/gst/cgst-act.pdf

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