GST has launched the new simplified return forms in the form of an offline utility for trial by taxpayers, which were supposed to be applicable from April 2019. The applicability of these forms has now been deferred to the last quarter of this year i.e. October-December 2019. The new forms have been defined into 3 categories based on the turnover and another criterion. GST RET 01 – Normal returns, GST RET – 02 Sahaj returns and GST RET – 03 Sugam returns. Along with this the taxpayers also need to file ANX -1 for outward supplies or sales and ANX – 2 for inward supplies or purchases.
Let us try and understand what is ANX 1 and ANX 2 and why does a taxpayer need to fill these along with the new GST Simplified Returns in GST RET 01, GST RET 02 or GST RET 03.
The erstwhile GSTR 1, 2, 2A,3 and 3B all the forms will soon be discontinued entirely and only the new simplified returns will apply. The new regime of returns will basically be based on the sales entries that the supplier for goods makes in the GST ANX 1 that will replace the earlier GSTR 1 which was primarily the invoice wise account of sales made by a business. Hence, although the seller will enter his sales invoices in GST ANX 1, GST ANX 2 will be auto-populated based on the vendor’s ANX 1 filled by him.
GST ANX 1
The details required in GST ANX 1 are:
- For B2B – transactions details
- For B2C – Summary of sales
- Domestic / RCM transactions – GSTIN or PAN level details
- Import / Export – transaction details
- HSN – 6 digit HSN number
- E-Commerce – Summary of sales
- A specific section for reporting missing invoices
The rules for providing details in the GST ANX 1 for outward supplies have been relaxed a bit and details are not required to be provided for every transaction. Invoice level reporting is also done away with for large B2C supplies and the only summary needs to be provided. The original invoice numbers needn’t be quoted for credit or debit notes and no need to give document series or HSN summaries. Refund vouchers also need not be reported.
GST ANX 2
When it comes to GST ANX 2 it will be auto-populated based on the invoices from supplier data. Hence there are no entries that the taxpayer can make in this annexure but he can only check his inward supplies as mentioned in this ANX 2 as against the inward supplies in his books.
He can then take action of either Accept/Reject/Pending (no modification) based on the match or mismatch of invoice details. The tax credits will be populated in the GST RET 01/02/03 based on this.
The ISD credit will be auto-populated.
The offline utility GST ANX 1 and ANX 2
The offline utility was launched by the government few months ago to take feedback from the industry and taxpayers about the use of the annexures. In this utility you can fill in your details of sales in ANX-1 and the details of inward supplies would be auto-populated in ANX-2 based on the ANX-1 filled by the vendors. The government has also invited suggestions on the opportunity to compare the purchase register of the taxpayers with ANX-2 and find out mismatches of invoices not uploaded correctly. This offline utility will be available for taxpayers on a trial basis for the three months July 2019 to September 2019.
The following things can be performed using the prototype GST ANX 1 and ANX 2:
- Sample data is pre-populated for view and familiarization of the offline utility and most of the fields are pre-filled to a certain extent to help you understand how the details will look like
- The taxpayer can upload the sales invoices in different tables or view for pre-filled data and summaries can be viewed as taxpayer wise and document wise.
- Although the prototype can allow the upload of data some features of the actual one like saving data, downloading/uploading JSON to GST Portal and related error rectification will not be available
- In the GST ANX-2, the user can click on the ‘Take Action’ button to take action on the details. The user can also open the downloaded JSON file from GST Portal by importing from the offline tool.
- Certain tabs like ‘open downloaded JSON file’, ‘remove data in all tables’, ‘export to excel’ and ‘generate JSON file to upload’ are not available for use in Prototype. Working of ‘matching tools’ can be seen in the prototype with pre-filled data provided.
- Many summaries like table wise summaries, ITC summaries and more can be viewed based on pre-filled data by users.
- Credit received from ISD can also be viewed but o action can be taken on the data.
The actual credit or ITC claims will be unaffected by the entries made in these prototypes. The entries made will not be saved and hence the data will not be submitted through these offline utilities. The taxpayers are still required to file their GSTR 1 and GSTR 3B until the utilities will be made available.
The simplification of the GST returns once these ANX 1 and ANX 2 become fully functional will be a welcome move since compliances will reduce. However, the resolving of mismatches between the figures as reflected in ANX 2 and the entries made in the purchase register and preparing reconciliations offline might be a tedious task.