Come January, nearly 93 percent of GST assessees can breathe easy as they will not have to think about filing two returns (GSTR1 and GSTR3B) every month.
GSTR1 returns show total tax liability and GSTR3B explains how much actual tax has been paid in cash after deducting input tax credit (ITC). As of now, barring Composition Scheme Assessees, every other assessee is required to file these two returns every month taking the total count to 24 every year. From January, the count will drop to eight.
This will happen due to a decision by the GST Council on Monday. It said small taxpayers having the aggregate annual turnover less than ₹ 5 crore will be allowed to file returns on a quarterly basis with monthly payments w.e.f. January 1, 2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35 percent of the net cash tax liability of the last quarter using an auto-generated challan.
“An assessee having turnover below ₹ 5 crore, will have three options now. First, continue with the existing system of filing returns on a monthly basis and pay the tax due. Second, use the quarterly return filing system with payment of a certain percentage of tax due during the first three months and settle the whole amount along with return in the third month. Third, if there is no tax due, then do not pay any amount on a monthly basis and file NIL return in the third month through SMS bases system,” a tax department official explained.
He also mentioned that ITC available can also be used for monthly payment during the current quarter based on 35 per cent of the net cash tax liability of the last quarter. For example, if an assessee has to pay ₹ 35 crore during in January 2021 and he has around ₹ 30 crore of ITC available, so actual monthly payout would be ₹5 crore in January only.
Read More at: https://www.thehindubusinessline.com/news/national/new-returns-regime-to-benefit-most-gst-assessees/article32781763.ece