Govt. plans to drop new GST return system & improve present returns

In a turn of events, the government has indicated plans to revamp existing GSTR-1, GSTR-2A and GSTR-3B systems. The new GST return system, scheduled to be implemented from 1st October 2020, might be scrapped entirely.

At a webinar organised by ASSOCHAM, the Principal Commissioner of GST Policy wing of CBIC, Mr Yogendra Garg justified that the expected move will simplify compliance. However, the GST Network which was developing the necessary IT systems for the new GST returns will soon be announcing the improved version of the current return system.

The improved version of the current return system has a nearly-automated matching tool for comparing GSTR-2A with the purchase register. It is similar to the idea of comparing ANX-2 with the purchase register under the new return system. Further, there will be a communication channel established between the buyer and the seller for missing invoices and to sort out differences in the Input Tax Credit (ITC).

There will also be an improved comparison table of tax liability and ITC. GSTR-2A return has been upgraded with finer details. ITC on IGST paid on imports will be incorporated in it. 

Also Read: GSTN Restores the Deemed Approval Process for GST Registrations

A new static form, GSTR-2B will be introduced that will contain monthly purchase details of the business/GSTIN and ITC paid on them. It will give a clear bifurcation of the eligible ITC as well, indicating the table of GSTR-3B in which it is to be reported. The form can be instantly downloaded with a filter and search options. This form will be launched to tackle the challenges involved with the present dynamic form GSTR-2A.

Improved GSTR-1 will capture more information about different types of sales, and most of the details in GSTR-3B will be auto-populated similar to RET-1/2/3 that was proposed under the new system. GSTN is said to have been looking at options of increasing interlinking of all three returns GSTR-1, 2A and 3B to reduce errors by taxpayers.

Garg was quoted claiming that the e-invoicing system shall still come into force for the large enterprises as planned. However, the turnover limit for applicability may be raised from Rs 100 crore to Rs 500 crore or more per annum. Further, a revised standard version of the e-invoice in form INV-1 will be notified soon along with the link to register on the portal.

Recently, GSTN formally announced soon-to-be-incorporated changes in APIs such as delinking of credit-debit notes from the invoice on GSTR-1, 2A, 4A, 6 and 6A, auto-populating the liability details from GSTR-1 to GSTR-3B, the filing status of GSTR-1 and GSTR-3B in GSTR-2A, etc. These will be implemented from various dates of July-August 2020.

It will be a welcome move if the government drops the plan to implement the new GST return system. When the pandemic and global crisis has hit the government’s coffer, it will be a wise decision to improve the existing system itself. It will also avoid businesses incurring any transition costs involved shifting to the new GST compliance system.

But one cannot discount the time and efforts that have already gone into developing and testing the pivot of the new GST return system on the GST portal. This news break of unexpected change in plans within the GST decision-making body leaves our taxpayers incalculable.

For any clarifications/feedback on the topic, please contact the writer at

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…

Know the taxation rules for income F&O trading

Futures and options are stock derivatives that are traded in the stock…

Important Cash Transaction Limits and Penalties Under Income Tax That You Need to Know About

In India, there are a lot of transactions that go unaccounted for,…

Role of Technology in the Era of COVID-19 Pandemic

Technology will not be able to avoid the onset of a pandemic;…