Current vs. New GST Return Systems: Understanding the Differences


The Goods and Services Tax (GST) is a significant tax reform in India that has revolutionized the way indirect taxes are levied and collected. With the introduction of the New GST return system, there have been notable changes in the filing process. In this blog, we will explore the differences between the current and new GST return systems, highlighting the key features and implications for taxpayers.

  1. Return Forms:
    Under the current GST return system, taxpayers are required to file various forms such as GSTR-1, GSTR-3B, and GSTR-9, depending on their turnover and registration type. However, the New GST return system introduces simplified forms, including Normal (RET-1), Sahaj (RET-2), and Sugam (RET-3), catering to taxpayers with different turnover levels.
  2. Frequency of Filing:
    The frequency of filing returns is one of the significant differences between the current and new systems. Currently, taxpayers file monthly GSTR-1 and GSTR-3B returns, with an annual return (GSTR-9) to be filed once a year. However, under the new system, the frequency of filing returns will depend on the type of taxpayer and their turnover.
  3. Invoicing and Reporting:
    The new GST return system emphasizes detailed reporting of sales and purchases. In the current system, taxpayers provide summary-level information in GSTR-1 and GSTR-3B returns. In contrast, the New GST return system requires taxpayers to provide invoice-level details of their business-to-business (B2B) transactions, ensuring better transparency and accuracy in reporting.
  4. Input Tax Credit (ITC) Matching:
    ITC matching plays a crucial role in the GST return process. In the current system, taxpayers claim ITC based on the invoices uploaded by their suppliers, without any real-time matching. However, the new system introduces the concept of auto-population, where the system automatically reconciles the ITC claimed by the recipient with the details furnished by the supplier, minimizing errors and potential mismatches.
  5. Amendments and Corrections:
    The new GST return system offers more flexibility for making amendments and corrections. Under the current system, taxpayers face challenges in rectifying errors or omissions made in their filed returns. However, the new system allows taxpayers to make amendments and corrections in the subsequent return filing periods, reducing the burden and streamlining the process of updating information.
  6. Offline Tools:
    Another significant difference is the availability of offline tools for return preparation. Currently, taxpayers primarily rely on the GST portal for return filing. However, the new system provides an offline tool, known as the GST Offline Tool, which enables taxpayers to prepare their returns offline and then upload them to the GST portal. This feature offers convenience and flexibility to taxpayers, especially in areas with limited internet connectivity.

The introduction of the New GST return system brings significant changes to the filing process, aiming to simplify compliance, enhance transparency, and minimize errors. With the new forms, detailed reporting requirements, auto-population of ITC, and the availability of offline tools, taxpayers can expect a more streamlined and user-friendly experience. It is crucial for businesses and individuals to understand these differences and adapt to the new system for seamless GST compliance. Staying informed and updated will ensure a smooth transition and contribute to a more efficient and transparent tax ecosystem in India.

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