The Central Government has recently come up with a new GST Return scheme to ensure some relief to the small taxpayers of our country. An individual taxpayer whose aggregate turnover under GST does not exceed the value of Rs. 5 crores are the main target of this new GST Return Scheme. With this being said, the Government has laid down certain provisions to implement the newly introduced scheme. So, let’s not waste any more time and understand the new GST Return scheme in detail.

Which taxpayers will be affected by the new GST return scheme?

This newly introduced GST return scheme is not applicable to all taxpayers. Go through the pointers given below to check out the applicability of this GST return scheme.

  • This scheme will only be applicable to taxpayers whose aggregate turnover under GST law will not be less than Rs. 5 crores in the financial years 2019-20 and 2020-21. 
  • The small taxpayers opting for this new GST return scheme will have to make sure that all the returns of the previous months that are due are cleared before this return option is chosen.
  • Once this scheme has been chosen, it will stay deemed until the concerned taxpayer chooses to opt-out of it or if his aggregate turnover under GST crosses the given Rs. 5 crore limit.

As this new GST return scheme will be in function from the 1st of January, 2021, the provision, therefore, automatically provides for the existing taxpayers who fall in the category of the following transitioning periodicity:

  • The taxpayers who have been filing GSTR-1 in the financial year 2020-21 and have an aggregated turnover less than that of Rs. 1.5 crores, automatically get converted to ‘Quarterly filers’ under this new GST scheme from the 1st of January, 2021.
  • The taxpayers who have an aggregate turnover of less than Rs. 1.5 crores and has been filing the monthly GSTR-1 in the financial year 2020-21 will also get fall under this new scheme. They will be categorized as ‘Monthly filer’ from the 1st of January, 2021.
  • The taxpayers with an aggregate turnover of more than Rs. 1.5 crores but less than Rs. 5 crores in the financial year 2019-20 will be converted to ‘Quarterly filers’ in accordance with this new scheme from the 1st of January, 2021.

Important Note: Any individual taxpayer who wishes to change the automatically selected periodicity given above can do that from the 5th of December, 2020 to the 31st of January, 2021. Considering that the new GST return filing system will be implemented from December 2020, it can be assumed that the option to switch the periodicity can be availed from this month. 

The Detailed Tax Filing Process

For the ones opting for the new GST return scheme, it is important that the various intricacies associated with the return filing is known beforehand. So, go through the points given below to know all the required details beforehand.

Invoice Furnishing Facility

  • The individual taxpayers opting for the quarterly filing of returns under the newly introduced scheme can avail the option of filing a monthly detailed statement for the tax invoices and other debit or credit records for the supplies given to registered persons. It can be done via Invoice Furnishing Facility (IFF). 
  • This specific facility to file the statement will be available only for the 1st and 2nd month of a given quarter and the dates would be 1st to 13th of the subsequent month.
  • For every month, the maximum cumulative worth of the supplies filed via IFF cannot cross the limit of Rs. 50 lakhs.
  • Choosing this option will help the taxpayers to avoid any kind of harassment from customers if any mismatch arises in the GSTR-2A/ 2B.

GSTR-1

  • The taxpayer opting for the quarterly filing of returns under the newly introduced GST return scheme will have to file a quarterly GSTR-1 before the 13th day of the month, succeeding that quarter.
  • In this case, the taxpayers will not have to furnish the details or documents that have already been checked once during the IFF for the first two months of that quarter.

Given below are the details that will be significant for quarterly GSTR-1:

  • Properly addressed invoice-wise details of intra-state or inter-state supplies that have been made to registered taxpayers (B2B). However, the ones already furnished during IFF is not required.
  • Statement-wise details for all the inter-state supplies made to unregistered persons and the bill value of that should be more than Rs. 2,50,000 (B2CL).
  • Statements that comprise a state-wise and rate-wise division of the supplies made to unregistered persons of upto Rs. 2,50,000. 
  • Details associated with debit or credit statements

GSTR-3B

  • The taxpayers who opt for quarterly return filing under the new GST return scheme will have to file the quarterly GSTR-3B within the 22nd or 24th of the month that succeeds the quarter. However, this depends on the state in which the taxpayer resides.
  • The taxpayers will have to deposit 35% of the tax amount that has been paid in cash in GSTR-3B of the previous quarter. Further, in the case of monthly return filings, one has to pay the full amount of the tax in cash in the GSTR-3B for the month prior to the quarter.
  • This provision of monthly tax payment will not be necessary only if the cash balance in the Electronic Cash Ledger is enough to balance the month’s tax liability or if there is no such tax liability.
  • The provisional deposition of the tax amount for the first two months of the quarter will be done via a payment challan within the 25th of the next month.
  • After the deposition of the tax amount, the cash balance by the end of the 3rd month of the quarter will be open for utilization or to balance while filing the GSTR-3B.

Key Takeaway

With all the new rules and regulations introduced by the Central government, it is important for the taxpayers to stay updated. Therefore, go through the provisions in the newly introduced GST return scheme to make sure your small business runs smoothly. For any help regarding tax filing, contact FinGurus today!