Key Takeaways on Return Filing from 31st GST Council Meeting

The GST Council, in its 31st meeting held at Delhi on 22nd December, 2018, recommended major changes relating to GST Return Filing System. Below are the highlights of major changes:-

1. Single cash ledger for each tax head

Electronic Cash Ledger is like a wallet where taxpayer deposits cash to set off the GST liability. There are total five major heads in Electronic Cash Ledger which are IGST, CGST, SGST/UTGST& CESS. These heads are further divided into 5 minor sub-heads- Tax, Interest, Penalty, Fees, and Others.

The taxpayer has to deposit cash in correct minor head corresponding with major head to offset a particular tax liability. For e.g. if a taxpayer has to pay late fees, then he/she has to deposit the cash in late fee column of CGST/SGST head. This complicates the whole process as depositing the cash in wrong head whether it is minor (Interest, Penalty etc) or major (IGST, CGST etc),cannot be rectified nor utilized for offsetting liability. The taxpayer has to go through the hectic process of refund for claiming wrongly credited cash amount.

Recommendation of removing minor heads for each tax head will comfort the taxpayers in depositing and setting off tax liability.

The above recommendation is expected to take effect from the date of issue of relevant notification/ circular.

2. New Return Filing System

New return filling system will be introduced on trial basis from 1st April, 2019 and on mandatory basis from 1st July, 2019.

However, till date, no clarification/ explanation has been provided with respect to the new return filing system by GST Council.

The above recommendation is expected to take effect from the date of issue of relevant notification/ circular.

3. Value of "non-GST supply" shall be included in "no supply" column and may be reported in Table 5D, 5E and 5F of FORM GSTR-9.

Non-GST Supply:Goods or services on which GST is not leviable are called Non GST supply. Input Tax Credit of inputs and / or input services used in providing non GST supply is not available. Examples of Non-GST supplies are alcohol for human consumption, petroleum products, electricity etc.

No Supply: There are certain supplies which are not covered under GST. These are classified under Schedule III of the CGST Act as "Activities or transaction which shall be neither supply of goods or services".

Now, the supply of goods and services made during FY 2017-18 which are neither classified as goods or services under GST law will have to be incorporated in "Non-GST Supply" Column in GSTR-9.

The above recommendation is expected to take effect from the date of issue of relevant notification/ circular.

Originally published January 2019

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