Returns in goods and services

tax
A brief overview

Ritvik Pandey
ritvik@gov.in
 Outline
Prologue Whats special about GST return?
Overview of Returns to be submitted by regular
tax payers
Process of filing of return and the rationale
Returns to be filed by some specific tax payers
ITC Matching and Reversal
Correction of Returns
Annual Return
First and final Return
Epilogue How can we make it happen?

2
 Why Returns
Mode for transfer of information to tax
administration
To declare tax liability for a given period
Furnish details about the taxes paid in
accordance with that return
Compliance verification program of tax
administration
Providing necessary inputs for taking policy
decision
Management of audit and anti-evasion programs
of tax administration
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Features of Tax Returns in
GST
Based on transactions Invoice based
Designed for system based matching of Input
Tax Credit and other details (import, export
etc.)
Auto-population from details of outward
supplies
Auto-reversal of ITC in case of mismatch
Concepts of ledgers cash, ITC and liability
No revised returns changes through
amendments to original details

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 Types of return in GST
Form Description Due date
at
GSTR- Statement of Outward Supplies 10th of next month
1
GSTR- Statement of Inward Supplies 15th of next month
2
GSTR- Return 20th of next month
3

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 Statement of Outward
Supplies
Basic details GSTIN, Name, period, Turnover
in last financial year mostly auto-populated
Invoice level details
B2B supplies, interstate and intrastate,
interstate B2C supplies more than Rs. 2.5 lakh
GSTIN of recipient
Invoice details Number, date, Value, HSN/SAC,
Taxable value
Tax IGST, CGST, SGST Rate and Tax amount
Place of Supply (relevant for interstate supplies)

Section 25 of the Draft

Model Bill 6
 Statement of Outward
Supplies
Details of supplies to customers
HSN/SAC
Place of Supply
Aggregate value
Tax IGST, CGST, SGST Rate and tax amount
Credit and Debit Notes linkage to original
invoice
Document number
Original Invoice Number
Deferential amount and deferential tax
Section 25 of the Draft
Model Bill 7
 Statement of Outward
Supplies
Reverse Charge
Details of exports with and without payment of
tax
Invoice details, Shipping Bill/Bill of Export, tax details
Details of exempt, Nil rated and Non-GST
supplies
Interstate and Intrastate B2B and B2C supplies
Tax paid on advances and adjustment of
advances
Amendment of any of the above details filed in
previous months
Section 25 of the Draft
Model Bill 8
 Statement of Inward
Supplies
Basic Details
Statement of Inwards Supplies
Auto-populated from Statements of outward supplies
Claimed non auto-populated
Supplies attracting reverse charge
Invoice level details
As in statement of outward supplies
Input Tax Credit available, eligibility and availed
Import of Services
Invoice details, IGST rate and amount, ITC

Section 26 of the Draft

9
Model Bill
 Statement of Inward
Supplies
Details of credit and debit notes
Auto-populated from statement of outward
supplies
Claimed non auto-populated
ISD Credit received
TDS Credit received
Other details of inward supplies
From exempt/composition suppliers
Exempt, nil rated and non-GST supplies
Section 26 of the Draft
10
Model Bill
 Return
Auto-populated based on GSTR-1 and GSTR-2
Outward Supplies
B2B and B2C inter and intra state supplies
Exports
Revision of tax of previous periods
Inward Supplies
Inter and intra state supplies received
Imports
Amendment to tax of previous periods
Credit to ITC Ledger
Section 27 of the Draft
Model Bill 11
 Return
Tax Liability
Tax on outward supplies
Changes in output liability of previous periods
Amount payable due to reversal of ITC
Payment details
Utilisation of credit of each tax (debit to ITC
ledger)
Cash (debit to cash ledger)
Claim of Refund of ITC or cash ledger

Section 27 of the Draft

Model Bill 12
 Salient features
Mostly based on timely filing of GSTR-1
GSTR-2 shall be auto-populated based on GSTR-1
Some additional details to be entered in GSTR-2
Claims of ITC not auto-populated
Details of import
Other inward supplies
HSN Classification
4 digit compulsory for turnover above Rs. 5 crore
2 digit optional in first year and compulsory from
second year

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 How does Return get filed
All registered persons to file GSTR-1by 10th
Can be filed during the month as well
GSTR-2 of all registered persons allowed to view
their inward supplies uploaded by their suppliers
GSTR-2 of taxpayers to be auto-populated after
10th
Recipients to prepare GSTR-2 based on auto-
populated details
Recipients to upload details not auto-populated
GSTR-2 to be filed by 15th

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 How does Return get filed
Auto-population of TDS details and
recipient to accept or reject TDS details
Those auto-populated details that have
been modified or those that have been
added or deleted will be communicated
back to supplier
Supplier may accept the changes by 17 th
and his GSTR-1 shall get amended
Based on the GSTR-1 and GSTR-2, GSTR-3
would be completely auto-populated
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 How does Return get filed
Tax payers can avail ITC credit for payment of taxes
and pay the rest by debiting their cash ledger
Tax payer to credit the cash ledger by making
payment by filling challan on GSTN
Submit GSTR-3 and at the same time following
actions happen simultaneously
ITC ledger gets credited by the ITC availed as per GSTR-2
ITC ledger gets debited by the ITC utilised for payment of
taxes
Cash ledger gets credited by the amount of TDS claimed
Cash ledger get debited by the amount utilised for
payment of taxes

16
 Types of return in GST
Form Description Due date
at
GSTR Statement of Outward 10th of next month
-1 Supplies
GSTR Statement of Inward 15th of next month
-2 Supplies
GSTR Return 20th of next month
-3
GSTR- Return for Compounding 18th of month in next
4 suppliers quarter
GSTR- Return for Non-resident 20th of next month
5 suppliers
GSTR- Return for ISD 13th of next month
6
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GSTR- Return for TDS Deductors 10th of next month
 Return for Composition
suppliers
No ITC Available
Details of inward supplies
Invoice level auto-populated and
uploaded
Details attracting reverse charge
purchases from unregistered suppliers
Details of import of goods and
services
Details of outward supplies gross
basis
Proviso to Section 27 (1) of the Draft
Model Bill
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Return for Non-resident tax payers

Backed by advance tax

They can take credit of IGST on
import and pass on credit on all
supplies
Credit of tax paid on imports
Details of outward supplies
Similar to GSTR-1
Details of tax paid ITC ledger and
cash ledger
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Closing stock of goods
 Return for ISD
Details of inward supplies
Similar to GSTR-2
Details of credit distributed
GSTIN of recipient
Invoice details
Credit distributed IGST, CGST, SGST
ITC account
ITC received
ITC distributed
Section 27 (6) of the Draft Model Bill 20
 Return for TDS Deductors
Pertains to cash ledger and not credit
ledger
TDS details
GSTIN of deductee
Invoice details number, date value
TDS details rate and amount IGST,
CGST, SGST
Details of payment only by cash
ledger
Section 27 (5) of the Draft
Model
TDS Billamount cannot be paid by 21
End Session 1

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ITC Matching Reversal Why at all?

Seamless availability of credit in one State of tax paid in

another State
IGST Model
Credit of IGST paid in one State available for payment of local
tax in another State Central Government to transfer funds to
State
Credit of local taxes paid in one State available for payment of
IGST in another State State Government to transfer funds to
Centre
No Government can transfer funds unless collection of
tax is ensured
But recipient have to be given an opportunity to claim ITC
ITC matching and auto-reversal is the workable solution

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 What gets matched
Tax invoices [Section 23]
Issued for every supply by every taxpayer
other than composition
Including supplementary and revised invoices
Debit and credit notes [Section 24]
To be issued only against an invoice
To be issued before end of September of next
year
Conditions and restrictions about discounts
regulated by law
Sections 23 and 24 of the Draft
Model Bill 24
 ITC Matching and Reversal
All returns filed with payment of taxes are treated as
valid return [Section 27 (3) of the Draft Model
Bill]
Self assessment ITC to be allowed on filing of return
Provisionally allowed for payment of taxes in that return as
per his claim [Section 28 of the Draft Model Bill]
After filing of return
ITC claims checked for duplication
ITC claims matched with tax paid in valid returns
Claims that come as a result of auto-population taken as
matched if tax paid by supplier
Uploaded invoices matched with supply invoices

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 ITC Matching and Reversal
Duplicate claims communicated to recipient
and unmatched claims communicated to both
ITC claimed on duplicate invoice added in
next return
Unmatched invoices
Either supplier owns up in next return and uploads
it as part of his next months GSTR-1 match in
that return cycle
Otherwise, ITC claim remains unmatched in next
month return and gets added in next return

Section 29 of the Draft

Model Bill 26
 Reclaim of reversal
Any invoice uploaded in a month that does
not match with a supply invoice in a valid
return gets reversed in two months
Once reversed, recipient should not reclaim
it again unless uploaded by supplier
At any time it gets automatically reclaimed
if supplier uploads the invoice
Interest on reversal
Refund of interest on reclaim supplier to pay
interest on delayed payment of tax
Section 29 of the Draft
Model Bill 27
 Matching of Credit Notes
Process in previous slides applicable to invoices
and debit notes both lead to payment of tax in
the hands of supplier and ITC in hands of recipient
Credit Note
Reduction of tax liability in hands of supplier
Reduction of ITC in hands of recipient
Same matching and auto-reversal process but
different consequence
The reduction of output liability claimed gets added to
his liability if recipient does not own it and reduce his ITC
clam
Same two month cycle
Section 29A of the Draft
Model Bill 28
 Valid Return
Unless tax is paid, the return does not go for matching
ITC for invoices that have been uploaded but tax not paid
will get reversed
ITC claimed in a return that is not valid available only for
utilisation for liability in that return
No tax payer can file a monthly return unless he has filed
a valid return for previous months return
If a State has transferred funds to Centre and supplier
fails to pay SGST, the recipient shall pay the SGST credit
used but not paid
If a State has transferred funds to Centre and supplier
fails to pay IGST, the recipient shall pay the IGST credit
used but not paid
Proviso to Section 28 of the
Draft Model Bill 29
 Correction in returns
No Revision of returns
As per the return taxes have already been paid and fund
transfers already settled
No significance as the basis now is individual transaction
All changes through amendments in subsequent
returns
If an invoice has been left out in GSTR-1 or GSTR-2
can be uploaded in subsequent returns
If and invoice has been wrongly entered but
remains unmatched can be amended in
subsequent returns

Proviso to Sections 25 and 26 of the

Draft Model Bill 30
 Correction in returns
Post transaction changes to be done through
debit or credit notes
Other details like B2C supplies can be
amended in subsequent returns
Delayed uploading coupled with payment of
interest
All changes, credit or debit notes to be
carried out before September of the next
financial year
To enable any auto-reversal before Annual Return
Proviso to Sections 25 and 26 of the Draft
Model Bill 31
 Types of return in GST
Form Description Due date
at
GSTR Statement of Outward 10th of next month
-1 Supplies
GSTR Statement of Inward 15th of next month
-2 Supplies
GSTR Return 20th of next month
-3
GSTR Return for Compounding 18th of month in
-4 suppliers next quarter
GSTR Return for Non-resident 20th of next month
-5 suppliers
GSTR Return for ISD 13th of next month
-6
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GSTR Return for TDS Deductors 10th of next month
 Annual Return
Annual summary of all transactions
Accounts to be certified by Chartered Accountant
etc. if turnover more than Rs. 2 Crore
Personal Details
Details of Expenditure
Purchases goods/services intra/inter state
Imports
Details of Income
Supplies goods/services intra/inter state
Exports

Section 30 of the Draft

Model Bill 33
 Annual Return
Account of taxes payable and paid
Arrears of taxes
Refunds
Profit and Loss
Reconciliation Statement
Not to be filed by ISD, TDS Deductor,
Casual Taxpayer, and Non resident
taxpayer
Section 30 of the Draft Model
Bill 34
 First and Final Returns
First Return
Required when the liability to register and pay
tax arose before grant of registration
Manual process
To pay tax where supplies were made before
registration
To take credit on receipts that happened before
registration
Final Return
On closure of business
Reversal of credit on goods in stock
Sections 27A and 29 of the Draft
Model Bill 35
 Post Return Filing
System based notice in case of
failure to file return
Late fee Rs. 100 per day
Non-filer assessment
Analysis of Returns
System based scrutiny
Scrutiny Assessments
Compliance verification
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 What is our role?
To understand the criticality and disseminate
Make Invoice level uploading easy
Easy upload through GSTN Software
Regular uploading possible
System of GSP
Integration with accounting software
Tax Return Preparers formal role in the Act and
Software
Capacity building tax payers, CAs/TRPs
Follow up on invoice level uploading
Mitigate risks of failure of uploading and auto-reversal

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Thank You

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