6 days ago — 4 min read
The GST council in its 31st meeting held on 22 December 2018 announced a transition plan for taxpayers which will simplify the return filings. This will benefit the MSME sector and small businesses by making the return filing procedure more functional and streamlined and thereby giving them more filing options.
The process has already begun and has been on trial since July 2019 and will be full-fledgedly active from October 2019. There are three main parts of the new return are:
One main return FORM GST RET-1
Two annexures FORM GST ANX-1 and
FORM GST ANX-2
The following are the benefits small businesses and MSMEs will get:
Small businesses can now report sales invoice in ANX-1 as and when they want before a deadline. This has been made possible by ‘upload-lock-pay’ facility. The annexure forms namely ANX-1 and ANX-2 will now be auto populated into the main return i.e. RET-1/2/3 to be filed by 20th for monthly filers and 25th of the month for quarterly filers.
At present the MSMEs having an annual turnover below INR 5 crore constitute nearly 93% of the tax base in India but don’t contribute to GST. Small taxpayers who have a turnover below INR 1.5 crore have been filing the quarterly GSTR-1. The limit now has been raised to INR 5 crore. This was done to ease the process of doing business.
In addition to the above scheme, taxpayers can now opt for any of the following returns:
Form name: RET-2
Applicability: For businesses making B2C supplies having an annual turnover of less than INR 5 crore
Form name: RET-3
Applicability: For businesses having an annual turnover of less than or equal to INR 5 crore and making both B2B and B2C supplies.
Form name: RET-1
Applicability: Applicable for businesses having an annual turnover of less than or equal to INR 5 crore
Form name: RET-1
Applicability: Applicable for those with annual turnover of more than INR 5 crore.
As mentioned above, small taxpayers can opt for any of the above four returns and they can complete the filing process in a shorter duration. You can also switch between the three quarterly return types at the beginning of the quarter.
MSMEs who are registered under the MSME Act of 2006, MSME Samadhaan have something to worry about, especially if they are catering to businesses who file their returns monthly. So, these MSMEs usually select quarterly filing of returns which can delay the uploading of invoices. This delay in turn leads to delay in ITC claims holding back the payment to MSMEs.
This limitation can hamper the business relation between big and small businesses forcing the filing of monthly returns. At present, sales details need to be uploaded after the quarter is over but the new filing system ensures update of invoices as per the convenience of the supplier.
The GST policy surely looks promising for small businesses who have been struggling with a proper business system for long and will help taxpayers easily file for compliance.
Image courtesy: shutterstock.com
Posted byGlobalLinker Staff
We are a team of experienced industry professionals committed to sharing our knowledge and skills with small & medium enterprises.
Recommended articles for you
By Maya Abraham
6 minutes ago
3 days ago