GST 2.0 : New GST Return Filing System

It almost have been 2 years since GST regime has come into existence subsuming the earlier prevailing various kind of indirect taxes namely VAT, Excise Duty, Sales Tax, Service Tax etc. Introduction of GST in July-2017 caused many difficulties among businessmen, giant corporations, Chartered Accountants & Consultants; as the new “One Nation One Tax” seemed quite complex to be executed at initial level. The whole system of paying taxes claiming input and filing of various returns has put the stakeholders in great trouble at initial level but gradually the government kept on making it easy with the help of GST council.

New GST Payment and Input Tax Credit (ITC) calculator

Currently, normal taxpayers files GSTR-1 showing the tax liability of quarter or month ended  on quarterly or monthly basis depending on the turnover threshold of 1.5 Crore.

And payment of tax is done on every 20thday of next month through filing GSTR-3B describing tax liability and claim of input tax credit on taxable goods and services purchased during the previous month.

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The major drawback of the GSTR-1 & GSTR-3B system is that the format of returns required every fraction of information which are completely irrelevant for small taxpayers. There were many other reasons for updating the GST return filing for easy compliance by taxpayers.

New GST Returns & Significant Changes:

Most significant change made by introducing new GST returns is bifurcation made between Small Taxpayers and Large Taxpayers. In earlier returns, the taxpayers having 1.5 Crores was known as small taxpayers and taxpayer above that limit was known as Large taxpayers and accordingly GSTR-1 filing frequency was decided.(i.e, quarterly or monthly).

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In new returns criteria of Small and Large taxpayers will be changed; taxpayers having turnover upto Rs. 5 Crore will known as Small Taxpayers and the same having turnover more than Rs. 5 Crore., will be known as Large Taxpayers.


GSTR-1 in new return filing system will be replaced by three type of return namely GST-RET-1, GST-RET-2(SAHAJ) & GST-RET-3(SUGAM).

  • GST-RET-1:

This is return almost like GSTR-1 which requires every fraction of information. Filing of RET-1 is mandatory for large taxpayers having turnover more than 5 Crore on monthly basis. This return allows taxpayer to furnish every kind of information like B2B, B2C, Exports, Imports, Unregistered Purchase, transactions with SEZ.

  • GST-RET-2 (Sahaj):

This return is introduced for small taxpayers who are involved in B2C transactions only; for easy compliance of indirect tax payment and return-filing process. It only allows to furnish B2C supply made and Inward supply on which tax is paid on Reverse Charge Mechanism.

  • GST-RET-3(Sugam):

There is no much difference between Sahaj and Sugam GST return. Sugam allows B2B transactions too which Sahaj return doesn’t. In other words, Sugam allows both B2B and B2C transactions for small taxpayers.

Summary of 36th GST Council Meeting held on 27 July

In the beginning of the financial year, the taxpayer is given choice whether to file GST-RET-1/2/3. And based on the span of business and turnover in previous year, the return must be selected.

However, if the taxpayer is opting for RET-1 or RET-2, then between the year he will not be allowed to switch to RET-2 or RET-3 respectively. But if one opts for RET-3, then he can switch to RET-1 during the financial year.


In existing return filing method, GSTR-3B is compulsory for all registered persons under GST on monthly basis net of ITC availed.

In new return filing system, payment of tax will be continued as before i.e- On Monthly Basis by showing the tax liability of previous month and furnishing the input tax credit claimed for the same month. Monthly payment of tax by using PMT-08 form will be mandatory despite of RET-1/2/3 filing period being quarterly or monthly.



These two annexures are the evolutionary change in the return filing system of indirect tax as it will make the compliance easy and very quick. ANX-1 is for outward supplies and ANX-2 is for inward supplies.

The ANX-1 will basically comprise details of outward supplies, inward supplies attracting reverse charge and import of goods and services. Supplier is able to upload the details of each invoice on real time basis continuously. And on the basis of the documents uploaded by supplier in his ANX-1, will be reflected in ANX-2 of the recipient of the supply and on the basis of the ANX-1 of supplier, recipient can avail the input tax credit.

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In existing return filing system, for availing B2B purchase input tax credit, only way to justify the claim was GSTR-2A. If 2A doesn’t reflect the particular invoice ITC of which is to be claimed, there may be chances the recipient can’t avail credit.

But in new return filing system, now recipient of supply, in the invoices automatically reflected by GST-ANX-1 of the supplier, can take action against the supplier’s details if the amount of tax is not shown correctly by the supplier.

Basics for Goods and Service Tax (GST) Audit

Currently the new GST “New Return Proto-type” is given on the website to give feel of new method. But from 1st Oct 2019, for the large taxpayers, filing of new returns will be mandatory. While for small taxpayers, the deadline for filing new return is 1st January 2020. Thus from first month of 2020, all registered persons under GST will be filing new returns mandatory..

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The author of above article is Bhavik Sindhvad.

Disclaimer:The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon.  It is prepared based on understanding of provisions as stood applicable as on date.
Also, and its members do not accept any liability, obligation or responsibility for author’s article and understanding of user.
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