New GST Return: Difference between Forms GST RET-1, Sahaj & Sugam

This article uncovers the detailed explanation of the working & differences in the forms introduced under New GST Return, namely, GST RET-1, GST RET-2 (Sahaj) & GST RET-3 (Sugam).

The three New GST Return forms will replace the existing form of GSTR-3B. The three forms are segregated on the basis of turnovers & types of transactions carried out by the business.

Based on the above-mentioned criteria, businesses can determine which form is the most suitable for them & opt to file GST through that form.  

By the end of the article, you will be able to identify & understand each form distinctly. 

e-Invoicing & New GST Return System will implement for all regular taxpayers form October 2020, until further notice otherwise. 

Upon implementation, the e-Invoicing & New GST Return System Filing will require tremendous changes to the IT infrastructure, for better compliance. However, this issue can be resolved with the help of GST Filing software.

Also Read:- Know about different type of Income Tax Return forms

What is Form GST RET under the New GST Return Regime

With the introduction of the New GST Return System, the existing GST returns filing forms are being replaced by a fresh set of New GST Return forms.

Form GSTR-1 (Sales Return) & Form GSTR-2 (Purchase Return) will be replaced by Annexure-1 (Sales Annexure) & Annexure-2 (Purchase Annexure).

While there is no announcement regarding the rest of the forms, the main return Form GSTR-3B will also be replaced, but by three New GST Return forms instead of one.

GSTR-3B will be replaced by Form GST RET-01, GST RET-02, & GST RET-03. These are the three new main return forms and are segregated based on the taxpayer’s turnover as well as their type of Business or supplies included.  

Out of the three main return forms, GST RET-1 is a monthly filing form, that the taxpayers need to file every month.

Whereas GST RET-2 & GST RET-3 are quarterly filing forms & taxpayers can file these forms on a quarterly basis.

The taxpayer has the liberty to opt for either monthly or quarterly filing forms, however, the GST must be paid every month. The quarterly filers can release their tax liabilities through self-declaration.  

The New GST Return Forms structure is highly systematic & vivid, let us see each form in detail.

What is Form GST RET-01? A detailed explanation & Format of New GST Return

The main New GST Return forms will be, Form GST RET-1. The taxpayers having an annual aggregate turnover more than Rs. 5 Crore will have to file this form monthly & release the tax liability along with it.

Although, taxpayers having annual aggregate turnover less than Rs. 5 Crore can also opt for this form & file it on a quarterly basis. In both cases, the tax liabilities will be released every month.

The following taxpayers need not file Form GST RET-1

  • Composition dealers.
  • Non-resident
  • Person supplying OIDAR
  • ISD
  • Person liable to deduct TDS
  • Person liable to collect TCS (e-commerce) 

Other than the above-mentioned class of taxpayers, any regular taxpayer can opt for this form.

Must Read:- TDS returns and forms- All about Form 24Q, Form 26Q, Form 16 and Form 16A

Who must file GST RET-1? 

New GST Return Form GST RET-1 is especially suitable for taxpayers who have a variety of types of supplies in their business.  

This is because there are no restrictions on the declaration of a specific type of supply, in other words, you can declare all types of supplies in this form.

So is not the case with the other two forms, GST RET-2 & GST RET-3 are only suitable for a few specified types of supplies & you cannot declare other types of Supplies.

Hence it is advised that if you have different varieties of supplies you must opt for GST RET-1.

Form Content- 

Form GST RET-1 consists of 9 Parts in total. Given below are the 9 sections & their explanation-

1. GSTIN- You need to enter your GSTIN in this section.

2. Basic Details- This section is auto-populated from your GSTIN & contains the basic details such as your trade name, legal name, etc.

3. Summary of outward supplies, inward supplies attracting reverse charge, debit/credit notes, etc. and tax liability- This sections contains all the details of outward supplies made to consumers, unregistered persons, registered persons, supplies to SEZ unit & SEZ developers, Exports, supplies liable to reverse charge, debit notes & credit notes, etc. In other words, this section contains all the details of outward supplies & inward supplies liable to reverse charge & other documents related to them. This section also contains, the total value & total tax liability. Following are the sub-sections of Section-3

  • Details of Outward supplies
  • Details of Inward supplies attracting Reverse Charge
  • Credit/Debit Notes issued, advance received, adjusted & other reduction in liabilities.
  • Details of supplies having no liabilities
  • Total Value & Tax Liability

4. Summary of inward supplies for claiming ITC- You will need to declare all the purchases made in the tax period in this section to claim ITC. Most of these details will auto-populate from Anx-1 & Anx-2. This section is again divided into five sub-sections-

  1. Details of ITC based on auto-population Form Anx-1, actions taken in Anx-2 & other claims
  2. Details of Reversal of Credits
  3. ITC Available
  4. ITC declared during first two months of the quarter (only for quarterly filers)
  5. Net ITC available 

5. Amount of TDS and TCS credit received in electronic cash ledger- This section will contain the details of TDS & TCS received in the Electronic Cash Ledger, based on the TDS deductor’s & TCS collectors’ Form GSTR-7 and GSTR-8 respectively. 

6. Interest and late fee liability details- The system will most likely auto calculate the interests & late fees.

7. Payment of tax- You will need to release your Tax Liability in this section, through ITC & then in-cash.

8. Refund claimed from electronic cash ledger- This section will auto-populate from the cash ledger.

9. Verification- All taxpayers must verify their returns before filing them, by clicking the checkbox & signing the return before filing.  

Guide on Forms Sahaj & Sugam under New GST Return

What is Form GST RET-02 or GST Sahaj? A detailed explanation & Format of New GST Return

Form GST RET-2 or GST Sahaj is a single-page simplified main GST return filing form for small taxpayers, having annual aggregate turnover up to Rs. 5 Crores.

Although the filing of this New GST Return form is done quarterly, taxpayers will have to release their tax liabilities monthly by self-assessment through a challan called, GST PMT-08.

Who can file form GST RET-2?

GST RET-2 is a very specific form & is restricted to the taxpayers dealing with B2C supplies only. 

Other than B2C supplies, taxpayers having supplies liable to reverse charge, nil rated supplies, exempted supplies, & non-GST supplies, can also opt for Form GST Ret-2 pr Sahaj form.

Form Content-

This form contains 9 Tables in total, given below are the table & their explanations-

1 & 2. Basic Details- The first two tables contain the basic details containing the GSTIN, trade name, legal name, & ARN, etc.

3. Summary of outward supplies and inward supplies attracting a reverse charge- All details of outward supplies & inward supplies liable to reverse charge are auto-populated from the Annexures. Although, you will have to enter the details of the advances or liabilities of the former tax period, manually. 

4. Summary of inward supplies for claiming ITC- Except for the ITC reversal, all other ITC related details will be auto-populated in this section from the annexures. 

5. Amount of TDS and TCS credit received in electronic cash ledger- This section will contain the details of TDS & TCS received in the Electronic Cash Ledger, based on the TDS deductor’s & TCS collectors’ Form GSTR-7 and GSTR-8 respectively.  

6. Interest and late fee liability details- The system will most likely auto calculate the interests & late fees.

7. Payment of tax- You will need to release your Tax Liability in this section, through ITC & then in-cash.

8. Refund claimed from electronic cash ledger- This section will auto-populate from the cash ledger.

9. Verification- All taxpayers must verify their returns before filing them, by clicking the checkbox & signing the return before filing.  

Note- you will have to maintain 4-digit HSN code in Form GST RET-2 or Sahaj Form.

What is Form GST RET-03 or GST Sugam? A detailed explanation & Format of New GST Return

The New GST Return Forms GST RET-3 or Form Sugam is another simplified main return form that will be introduced in the New GST Return System for small Taxpayers.

Form Sugam is a quarterly return form, however, you will have to release your tax liability monthly, via form GST PMT-08 through self-declaration.

Any taxpayers having annual aggregate income up to Rs. 5 Crores can opt for this form.

Who can file form GST RET-3 or GST Sugam?

Any taxpayer having annual aggregate turnover up to Rs. 5 Crores who is involved in both B2C & Domestic B2B deals only, can opt for Form GST RET-03. 

In case the taxpayer having a turnover of less than Rs. 5 Crores, is engaged in other advanced supplies such as exports, supplies to SEZ units & developers, etc. then they can opt for GST RET-1 quarterly filing.

Form Content-

Same as the previous two New GST Return forms this form also contains 9 tables. Given below are the tables & their explanations

1 & 2. Basic Details- The first two tables contain the basic details containing the GSTIN, trade name, legal name, & ARN, etc.

3. Summary of outward supplies and inward supplies attracting a reverse charge- This section will contain all the details of the outward supplies to the registered & unregistered persons, inward supplies liable to reverse charge. Most of the details in this section will be auto-populated from the annexures.

4. Summary of inward supplies for claiming ITC- Except for the ITC reversal, all other ITC related details will be auto-populated in this section from the annexures. 

5. Amount of TDS and TCS credit received in electronic cash ledger- This section will contain the details of TDS & TCS received in the Electronic Cash Ledger, based on the TDS deductor’s & TCS collectors’ Form GSTR-7 and GSTR-8 respectively.  

6. Interest and late fee liability details- The system will most likely auto calculate the interests & late fees.

7. Payment of tax- You will need to release your Tax Liability in this section, through ITC & then in-cash.

8. Refund claimed from electronic cash ledger- This section will auto-populate from the cash ledger.

9. Verification- All taxpayers must verify their returns before filing them, by clicking the checkbox & signing the return before filing.  

Note- you will have to maintain 4-digit HSN code in Form GST RET-3 or Sugam Form.

Final Comparison in Forms Normal, Sahaj & Sugam

ParticularsNormalSahajSugam
Turnover limitMandatory for above Rs. 5 Crores.
Optional for below Rs. 5 Crores
Below Rs. 5 Crores (Optional)Below Rs. 5 Crores (Optional)
Return PeriodMonthly (above Rs.5 crores turnover) Quarterly (below Rs.5 crores turnover) QuarterlyQuarterly
Forms to be filedANX-1, ANX-2, GST-RET 1 ANX-1, ANX-2, GST-RET 2, GST PMT 08 ANX-1, ANX-2, GST-RET 2, GST PMT 08 
Allowable declarationB2B, B2CS, RCM, Exports, SEZ supplies, E-commerce, Nil rated, exempt, etc. (All types) B2C & RCM 

Nil rated, exempt, non-GST supply allowed only.
B2C, B2B & RCM 

Nil rated, exempt, non-GST supply allowed only.
Other information6 Digit HSN code mandatory
ITC can be claimed on missing invoices
 4 Digit HSN code mandatory 

ITC cannot be claimed on missing Invoices
 4 Digit HSN code mandatory 

ITC cannot be claimed on missing Invoices

Conclusion

To conclude, it is safe to say that the government has taken a smart move by systematically segregating the New GST Return forms for taxpayers with specific turnovers & specific types of supplies.

This will reduce work & will simplify GST compliance for the taxpayers. The taxpayers are free to choose the type of return form as per their convenience & eligibility.

Although, since the New GST Return forms have not yet been implemented, there are no practical problems as of now, it may change with the course of time.

But Businesses will have to take the help of GST return filing online Software to comply better with the changing system, or else it will become more expensive & problematic & they will have to make massive changes to the billing software, etc.

Compiled by- Prachi Wankhede, who is a writer-editor at GSTHero and works in the Finance & Indirect Taxation domain.

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