The Government issued the following Notifications and Circular on 10th November 2020:
|81/2020 – CT|
Appoints the 10th day of November 2020, as the date on which the amendment in sub-section (1), (2), and (7) of section 39 vide Section 97 of the Finance (No. 2) Act, 2019 shall come into force.
The said amendment permits composition dealers to furnish annual returns along with quarterly payment of taxes; other specified taxpayers to be given an option to file returns and make tax payments quarterly or monthly.
Currently, composition dealers have to file quarterly returns with quarterly payment of taxes. However, the Government, with the purpose of easing the compliance burden has permitted such dealers to file an annual return with quarterly payment of taxes. This reduces the number of returns to be filed from 4 to 1; the quarterly payment of taxes keeps the Government revenue unaffected.
A similar provision has been prescribed for specified taxpayers. Details in Notifications No. 82/2020, 84/2020, and 85/2020 are mentioned below.
|82/2020 – CT||Amends CGST Rules, 2017 to give effect to revised return system*||Refer Note 1|
|83/2020 – CT||Taxpayers filing Form GSTR 1 monthly, are required to file the said return by the 11th day of the succeeding month; Further, taxpayers filing GSTR 1 quarterly are required to file the said return by the 13th day of the month succeeding such quarter.||W.e.f 1 January 2021, the due date for monthly GSTR 1 shall be the 11th of the succeeding month, whereas, the due date for quarterly filers shall be the 13th of the month succeeding such quarter.|
|84/2020 – CT||Notifies conditions to file quarterly return with a monthly payment of taxes for every quarter beginning January 2021. Further, any registered person whose turnover exceeds 5 crores during a quarter in FY will not be eligible for the filing of GST returns on a quarterly basis from the first month succeeding such a quarter.|
A registered person with turnover not exceeding INR 5 crore, who has opted for Quarterly Return, Monthly payment (QRMP) scheme as given in Notification no. 81/2020 can furnish quarterly GSTR 3B. The conditions to opt for such a scheme are:
1. Previous month’s GSTR 3B has been filed on time;
2. Once opted for the scheme, such an option continues unless revised.
A default migration system (Refer Note 2) has been put in place for eligible taxpayers who have filed their GSTR 3B for October 2020 before 30th November 2020. However, such a default option can be changed, if the taxpayer so desires between 5h December 2020 to 31st January 2021.
|85/2020 – CT||Notifies special procedure for making payment of tax liability for taxpayers who opted for quarterly return.|
Two options for payment of taxes have been provided for taxpayers opting for the QRMP scheme:
1. Fixed Payment: If the previous return was filed quarterly then, 35% of tax paid in cash needs to be paid in the first and second month of the quarter for which the return is being filed. If the previous return was filed on a monthly basis then, an equal amount of tax paid in cash needs to be paid in the first and second month of the quarter for which the return is being filed. Such tax needs to be paid on or before the 25th of the second and third months of the quarter.
2. Self-Assessment: Tax to be paid by considering the input tax credit on inward supplies and tax liability on outward supplies.
|86/2020 – CT||Rescinds Notification no. 76/2020 – CT dated 15th October 2020 which extended due date for furnishing monthly GSTR 3B return for period October 2020 to March 2021.||This does not change the current position; the extension has now been instated in CGST Rules, 2017.|
|87/2020 – CT||Extension to file ITC-04 for period July 2020 to Sept 2020 till 30th November 2020 provided.||The original due date for filing ITC-04 (Statement of goods sent to and received from job worker) for the quarter July 2020 to September 2020 was 25th October 2020 which has been extended till 30th November 2020.|
|88/2020 – CT||Notifies the next phase of implementation of E-invoicing for companies with an aggregated turnover in any FY from FY 2017-18 exceeding INR 100 crore (other than SEZ) from 1st January 2021.|
In lines with the past discussions, the Government has notified 1st January 2021 as the date to implement E-invoicing for companies with a turnover between INR 100 crore and 500 crores.
The sandbox facility is also made available on the E-Invoice portal for testing the E-invoicing generation.
The requirement to generate E-invoice is currently only concerning supply made to a registered person or export supply.
Note 1: Key Amendments Notified To CGST Rules, 2017:
- Amendment to Rule 59 of CGST Rules, 2017: A registered person who is required to file Form GSTR-1 every quarter can update its B2B invoices in the first and second month of the quarter on ‘Invoice Furnishing Facility’ (IFF) on or before 13th of 1st month in next quarter.
- HSN/SAC code has been made mandatory in Form GSTR 1 up to 4 digits for taxpayers with turnover less than INR 5 crore and up to 6 digits for taxpayers with turnover more than INR 5 crore. (Notified by Notification no. 78/2020 dated 15th October 2020, now inserted in the Rules).
- The details of outward supplies furnished by the supplier in Form GSTR 1 or using the IFF shall be auto-populated in Part-A of Form GSTR 2A, GSTR 4A, and GSTR 6.
- The details of invoices furnished by Input Service Distributor would be auto-populated in Part-B of Form GSTR 2A.
- The tax deducted at source by the deductee and tax collected at source by e-commerce operator shall be auto-populated in Part-C of Form GSTR 2A.
- Details of taxes paid on import of goods from SEZ unit or SEZ developer on a bill of entry would be auto-populated in Part-D of Form GSTR 2A.
- Rule 61(6) was inserted to provide due to the date for filing GSTR 3B as the 20th of next month. However, if the turnover of taxpayers is less than INR 5 Crores, the due date to file GSTR 3B for the period October 2020 to March 2021 would be 22nd/ 24th (depending on the state) of the month succeeding such month.
- Format of Form GSTR 2B (Auto-drafted ITC statement) notified.
Note 2: The taxpayers with aggregate turnover less than INR 5 crore for FY 2019-20 and who have filed GSTR 3B for October 2020 by 30th November 2020 shall be migrated as below:
Class Of Registered Persons
|Registered persons having an aggregate turnover of up to INR 1.5 crore who have furnished FORM GSTR 1 on a quarterly basis in the current FY||
|Registered persons having aggregate turnover of up to INR 1.5 crore who have furnished FORM GSTR 1 on monthly basis in the current FY||
|Registered persons having aggregate turnover more than INR 1.5 crore and up to INR 5 crore in the preceding FY||
Synopsis Of The Notifications
In the past few meetings and discussions, the GST council has expressed its intention to ease out the compliance burden of taxpayers. These Notifications can be said to be a step in the same direction. QRMP scheme can be surmised as a win-win situation for both, the taxpayers and the Government. While on one side it gives small taxpayers (turnover < INR 5 crore) a relaxation to furnish quarterly returns, the tax collection for the Government does not get delayed. Further, the option of paying taxes on a pre-determined percentage also somewhere gives a breathing space to the taxpayers. The Government has also clarified that in case the tax due exceeds the tax paid in the second and third month of the quarter, no interest shall be levied as long as the GSTR 3B for that quarter is filed on time. This is a massive relief that would encourage taxpayers to opt for the scheme. Further, taxpayers opting for the scheme would be required to furnish the details for outward supply in Form GSTR 1 quarterly. However, a facility has been provided to furnish the B2B invoices for the first and second months between the 1st and 13th of the subsequent month. This has been done to ensure that such details are reflected in the GSTR 2A and GSTR 2B of the recipient.
As far as the default migration is concerned, taxpayers have been advised to furnish the return of October 2020 in time so as to be eligible for it. The taxpayers who have not filed their return for October 2020 on or before 30th November 2020 will not be migrated to the Scheme. They will be able to opt for the Scheme once GSTR-3B as due on the date of exercising option has been filed. An above scheme is a default option, which can be changed by the taxpayer, if they desire, from 5th December 2020 to 31 January 2021.
Another important part of the Notifications is the format of GSTR 2B which has been notified. Though GSTR 2B was available w.e.f 12 September 2020, the official format has been notified now. GSTR 2B is a static statement and will be made available once every month. The statement shall consist of details of supplies furnished by the supplier in Form GSTR 1/ IFF (applicable in case of quarterly filers) between the day immediately after the due date of furnishing of FORM GSTR 1/ IFF for the previous month/Quarter to the due date of furnishing of FORM GSTR 1/IFF for the month/Quarter and the details of the IGST paid on the import of goods or goods brought in from SEZ on a bill of entry in the month. The draft statement provides the ITC that can be availed, Ineligible ITC, ITC reversal amounts basis information furnished by the supplier. The statement can be used for reference however it should be reconciled with books to ensure proper reporting in form GSTR 3B.