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Returns under Revised GST Model Law-At a Glance

February 22, 2017[2017] 77 taxmann.com 9 (Article)
1113 Views

Ashish Mittal

CA

Background

1. "Submission of details of transaction that the business was indulged in for a given period, in prescribed manner can be termed as Return" Every law when comes into force, defines some periodic statement called return to control and assess the transaction the organization has entered into. In context of GST, CBEC in collaboration with GST council has notified draft Model GST model Law (in short "MGL") as revised on 25th November 2016 wherein vide CHAPTER -VIII, twelve Sections has been issued in this regards for compliance along with separate set of rules under the MGL for various classes of assessee and types of returns.

Applicability

2. The different class of assessee who would be liable for various different returns along with applicable rule and relevant form has been summarized in the infra mentioned table (Reference to Section-32, 33, 34, 39 read with rules-1, 2, 3, 21 has been made)

S. No. Applicability for Various Class of Assessee Types of Return
Return for Outward Supplies (Section 32 read with Rule-1 ) Return for Inward Supplies (Section 33 read with Rule-2 ) Monthly Return (Section 34 read with Rule-3) Annual Return (Section 39 read with Rule-21)
1 Registered Taxable Person (Specified in Schedule V of MGL) Applicable Applicable Applicable Applicable
2 Composition Supplier under Section 9 Not Applicable Not Applicable Applicable Applicable
3 Non-Resident taxable person (NR) Applicable Applicable Applicable Not Applicable
4 Input Service Distributor (ISD) Not Applicable Not Applicable Applicable Applicable
5 Person required to deduct tax at source under Section 46 of MGL Not Applicable Not Applicable Applicable Not Applicable
6 Supplies effected through e-Commerce Applicable Applicable Applicable Applicable

3. Description of Various Types of Return and Forms (Assessee-Wise):

(i)   General Part : For all Assessee on whom following two returns are applicable (as per Supra mentioned table)
  Rule 1 Return for Outward Supply:
  Original Form-FORM GSTR-1 Steps:
a.   First the form will be filled by supplier by 10th of the next month
b.   Later this form will be available to recipients in Part A of FORM GSTR-2A for verifying their details.
c.   Details updated by the recipient in his FORM GSTR-2 U/s 33 or FORM GSTR-4 U/s 34 shall be made available to supplier in FORM GSTR-1A and
d.   Supplier may accept or reject the amendment in full or part and accordingly FORM GSTR-1 of supplier shall stand amended.
  Rule 2 Return for Inward Supply:
  Original Form-FORM GSTR-2
  Steps:
a.   It shall be prepared by using information of Part A,B,C,D of FORM GSTR-2A regarding details furnished by
  In part A–Outward Supplier
  In part B–ISD regarding ITC
  In part C–Regarding deduction U/s 37
  In part D–By E-Commerce Operator U/s 43C
b.   Also details regarding
1.   ITC available, allowed, disallowed
2.   ITC related to Non-Taxable Supplies etc.
  Rule-21 for Annual Return:
  Original Form-FORM GSTR-9 (for others)
  Original Form-FORM GSTR-9A (for composition supplier under Section 9)
(ii)   Specific Provision : In case of Monthly return different Assessee has different form for return empowered by different rules of return which is mentioned as follows Assessee-wise.
  Rule-3 For Monthly Return Registered Taxable Person (Specified in Schedule V)
  Original Form-FORM GSTR-3
  Part A : Auto Filed through GSTR-1, 2 still can modify
  Part B : Filled by the Assessee and pay tax and other dues or claim refund
  Note: If the due date of GSTR-1, 2 extended then for filling monthly return method to be prescribed.
  Rule-4 for Composition Supplier under Section 9
  Original Form-FORM GSTR-4
  Modification in FORM GSTR-4A
  All dues must be paid before filling return
  Rule-5 for Non-Resident taxable person (NR)
  Original Form-FORM GSTR-5
  All dues must be paid before 20th of next month or 7 days after expiring of registration whichever is earlier.
  Rule-6 for Input Service Distributor (ISD)
  Original Form-FORM GSTR-6
  Modification in FORM GSTR-6A
  Rule-7 for Person required to deduct tax at source under Section 46 of MGL
  Original Form-FORM GSTR-7
  Certificate of Deduction provided to deductee in FORM GSTR-7A
  Rule-8 for Supplies effected through e-Commerce
  Original Form-FORM GSTR-8
  Verification of Certain Documents shall be conducted in accordance with Rule-20 and 21 similar procedure as defined in ITC related points.

Frequency Various Returns:

4. Different returns need to be filled at different frequency which also varies assessee-wise which has been summarized below in tabular manner:

S. No. Who is Liable to file return? When i.e. at what frequency return need to be filled?
Return for Outward Supplies (Section 32 read with Rule-1 ) Return for Inward Supplies (Section 33 read with Rule-2) Monthly Return (Section 34 read with Rule-3) Annual Return (Section 39 read with Rule-21)
1 Registered Taxable Person (Specified in Schedule V) Monthly by 10th of Succeeding month of relevant tax period Monthly by 15th of Succeeding month of relevant tax period Monthly by 20th of Succeeding month of relevant tax period Annually by 31th of December of subsequent F.Y. Special Point: Person Liable for Audit under 42(4) shall submit audit report and return and reconciliation statements
2 Composition Supplier under Section 9 N.A. N.A. Quarterly by 18th of Succeeding month of relevant tax period Annually by 31th of December of subsequent F.Y.
3 Non-Resident taxable person (NR) Monthly by 10th of Succeeding month of relevant tax period Monthly by 15th of Succeeding month of relevant tax period Monthly by 20th of Succeeding month of relevant tax period Not Applicable
4 Input Service Distributor (ISD) Not Applicable Not Applicable Monthly by 30th of Succeeding month of relevant tax period Not Applicable
5 Person required to deduct tax at source under Section 46 of MGL Not Applicable Not Applicable Monthly by 10th of Succeeding month of relevant tax period Not Applicable
6 Supplies effected through e-Commerce Monthly by 10th of Succeeding month of relevant tax period Monthly by 15th of Succeeding month of relevant tax period Monthly by 20th of Succeeding month of relevant tax period Annually by 31th of December of subsequent F.Y. Special Point: Person Liable for Audit under 53(4) shall submit audit report and return and reconciliation statements

General/Common Provisions:

5. Some Provisions which are common in nature has been herewith stated in Question and answer form for the sake of simplicity

Certain General/Common Provision in Question and answer Form
Certain General Questions Answers based on Relevant Provisions as mentioned in MGL
What content need to be filled in Detail of Outward Supply? Details of outward supplies" shall include U/s 32
  zero-rated supplies,
  inter-state supplies,
  return of goods of an inward supply,
  exports,
  debit notes, credit notes and
  supplementary invoices
Meaning of Inward Supply? Meaning of Inward Supplies U/s 33
1.   Verify, validate, modify or delete the details of outward supplies and credit or debit notes as already auto populated by supplier in its outward supplies.
2.   Provide own details of inward supplies and credit or debit notes not show by supplier U/s 32
3.   Details of inward supplies of taxable goods and/or services for which tax payable under RCM or under IGST
4.   Credit or Debit notes received in respect of such supplies
What is Content of Monthly Return U/s 34? Monthly Return includes U/s 34
  inward and outward supplies of goods and/or services,
  input tax credit availed,
  tax payable,
  tax paid and
  other particulars as may be prescribed
Whether Extension of due date is possible Yes, By Board / Commissioner for valid and sufficient reasons by N/N Special Point: No Such Power Vested in Monthly Return of Sec. 34
How it should be filled Mandatorily all return to be filled Electronically on GST portal.
Whether Revised Return can be filled if yes how? Condition for Revision
1.   Original Return Cannot be Revised
2.   But the discovery of any error or omission therein can be corrected in monthly return U/s 34 of the tax period in which the default was detected
3.   But before Earlier of [Sept. monthly return u/s 34 of next F.Y or Annual return of F.Y] i.e. Correction possible max. till subsequent F.Y. Sept return or Annual return of relevant F.Y.
Certain Condition for Monthly Return Condition for Monthly Return U/s 34
1.   All dues of Tax must be paid before or on due date of filling respective returns
2.   If no supply then also NIL return Mandatory
3.   If tax not paid then return Invalid for allowing ITC
Concept of First Return U/s 35
1.   Registered Person to file return U/s 32, 33 till end of the month in which registration is granted to them.
2.   For Sec. 8 Assessee details up to end of relevant Quarter need to be filled.
3.   Balance provision of 32, 33, and 34 apply mutatis mutandis.

Input Tax Credit Related Provisions:

6. Input tax being one of the most important limb of GST, and its impact on return would be crucial, Thus the governing provisions giving reference to Section 36, 37, 38 read with rules 10, 11, 12, 13, 14, 15, 16, 17, 18 of Return rules of MGL has been summarized herewith below point wise:

  Provisionally ITC allowed as claimed in return but not for defective return under sec. 34 i.e. until the admitted proper tax liability is discharged. (Sec. 36)
  Matching of Provisionally allowed ITC U/s 36 after due date (in case extension of date for Sec. 32 and 33 extension of date of ITC matching shall be done) of filling return U/s 34 with the details and various documents i.e. debit and credit note provided by the supplier and recipient in FORM GSTR-3 i.e.
(a)   GSTIN of the supplier
(b)   GSTIN of the recipient
(c)   Invoice/Debit Note date
(d)   Invoice/Debit Note number
(e)   Taxable value
(f)   Tax amount
  Note : If ITC claimed by recipient is equal to or less than tax shown by supplier then it is deemed to be matched
  The final acceptance and rejection shall be communicated to both parties in FORM GST ITC-1. (Sec. 37 & 38)
  Certain communication of discrepancy in details and credit note to both parties are
a.   Mismatch of tax shall be communicated in FORM GST ITC-1
b.   Non-submission of Invoice by supplier would disallow the ITC of recipient in FORM GST ITC-1
c.   Duplication of ITC would be disallowed and communicated in FORM GST ITC-1
d.   The difference in tax becomes output liability of recipient with interest subject to reduction when correction is done along with refund (shall be granted in electronic cash ledger in FORM GST PMT-3 of interest earlier paid for setoff in future liability) (Sec. 37 & 38)

Note:

1.   Rectification by a supplier – adding or correcting outward supply details in his valid return
2.   Rectification by the recipient - deleting or correcting inward supply details for matching with each other's return

Note : Provisions of Sec. 37 and 38 are similar and incorporated above only and there relevant rules also.

Belated or No Return:

7. Question : Whether Belated Return shall be accepted if yes what is the penalty?

What if No return is filled?

References : (Section 40,41,42,43 read with Rule-21, 22, 23, 24)

Solution:

Yes, Belated Return can be filled subject to late fees of 100 per day of Default

Or

5000

Whichever is lower

  Next Period Return cannot be filled if earlier return is not filled.
  Notice may be issued to defaulter in FORM GSTR-3A with direction to file return in stipulated time.
  On cancellation of Registration final return under Sec. 40 read with Rule 22 is to be filled in FORM GSTR-10
  Concept of TRP in Sec. 34 read with Rule-24

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