Many reforms have been made in the Goods and Services Tax (GST) return filing system. There is an addition of GST ANX-1 and GST ANX-2. A person used to fill the forms before the reforms, i.e., GST RET 1/RET-2/RET-3, are now supplemented with GST ANX-1 and GST ANX-2. These forms have similarities with GSTR-1 and GSTR-2A forms. These forms play a crucial role in the return filing process currently.
As you will continue reading this article, you will know more details about the annexure, GST ANX-1, and GST ANX-2.
Correct Reporting of Supplies: GST ANX-1 and GST ANX-2
There is a slight difference in mentioning the details of the supplies in both the annexure.
In GST ANX-1 format, the registered taxpayers have to mention all the outward supplies, all the inward supplies that come under reverse charge, and all the imports made at a certain tax period.
In the second annexure, GST ANX-2 format, the registered taxpayers have to give all the details of inward supplies done by the registered person, supplies obtained from an SEZ developer/unit, and imports.
As and when the registered taxpayer needs to upload all the documents related to supply in GST ANX-1, the taxpayer can see the same in GST ANX-2. The recipient has three options that can be taken against these documents. You can accept them, reject them, or you can keep the documents in the pending state, where the action can be taken at a later stage.
GST ANX-1 and GST ANX-2: Trial Rollout
These two annexure forms were rolled out on a trial basis earlier in 2020 and officially implemented by October 2020. Notwithstanding the annual turnover, all the registered taxpayers must fill both the annexure forms and correctly file the same. In April and May 2020, GST ANX-2 is available only in view format. The recipients are not allowed to take any action against this annexure.
Note: New return system is effective from October 2020, allowing both the taxpayers and the system to transform and get familiar with the new process. Due date is also given to make changes in return in FORM GSTR-3B and outward supply details in FORM GSTR-1 for September 2020.
The new GST return filing system facilitates the recipient to upload all the documents related to inward and outward supply details on a real-time basis. These documents can be uploaded in GST ANX-1 and are auto-populated in GST ANX-2.
The other important addition in the new GST return filing system is that you can match inward supply details from the invoices in GST ANX-2 by the purchase register. You can take appropriate actions accordingly. If all the details filled by the taxpayer got tally, then the recipient will be eligible to get an invoice, and this can be used to claim ITC.
If the details do not match, then the taxpayer has to reject the invoice. If it is not rejected, the recipient cannot claim ITC. The other option which a taxpayer is having is to mark an invoice as pending. In the later tax period, if the recipient wants, he can defer claiming ITC.
There is a cut-off date, which a taxpayer needs to keep in mind. Before the due date, the taxpayer can upload the invoices in GST ANX-1.
GST ANX-1 can be seen from two sides,
Supplier’s Side:
The taxpayers filing monthly returns have to submit the B2B invoices before or by the 10th of every month.
The taxpayers filing quarterly returns have to submit the B2B invoices previous to the 23rd of the successive month in the given quarter.
Recipient Side:
The taxpayers filing monthly returns can take action on the invoices uploaded in GST ANX-2 previous to the 20th of the following month.
The taxpayers filing quarterly returns can take action on the invoices uploaded in GST ANX-2 previous to the 25th of the month following the quarter.
There can be a mismatch in the invoices uploaded by the recipient and the supplier. The invoice uploaded by you might not be reflected in GST ANX-2 because it is not uploaded by the associated supplier in the corresponding GST ANX-1.
You may question that if a supplier does not upload or fails to upload the invoices before the due date, what will happen?
In this situation, the recipient has to alter the claim submitted in GST RET-1. The recipient has to pay the amount of tax after all the reversals.
There is a specific period for the suppliers to upload the invoices.
* Here T is the tax period.
T+2
For the taxpayers filing monthly returns, the time is two months after the tax period.
T+1
For the taxpayers filing quarterly returns, the time is one quarter after the tax period.
The recipient has to face difficulties in claiming ITC because of the delay on the supplier’s side, and the genuine recipients have to face problems.
The government is getting benefitted from the Provisional Credit Facility, which comes under the new GST system. Let us see how?
For recipients, the process for provisional credit is clumsy. These data help the government solve various cases in which genuine taxpayers cannot assure the suppliers for reporting or uploading invoices.
What the Government has to Say About the New GST System?
There will be ease for the recipient in claiming for ITC if everything is done properly from the supplier’s end. These all require the help and support of technology. The role of technology is to check if ITC is not blocked, it should quickly identify the mismatches, and if there is any problem, it should get resolved under the new GST return filing system.
Conclusion
To simplify the process of the new GST return system, you can use GST billing software. One such software is Imprezz. You no longer need to worry about the complex process. The software will simplify everything in just a few clicks.
We offer a 14 days free trial software program for small businesses in India. Login to get started!
