Return has been simplified by reducing the content of the return and implementation. The key elements of the new mechanism are as follows:
(i) One monthly return for all taxpayers except composition dealers and dealers having ‘Nil’ transaction. Return design will be simplified and tax payers shall be also given user friendly IT interface and offline IT tool to upload the invoices.
(ii) There would be unidirectional flow of invoices uploaded by the seller on anytime basis during the month, which would be the valid document to avail input tax credit by the buyer.
(iii) There shall not be any automatic reversal of input tax credit from buyer on non-payment of tax by the seller. In case of default, recovery shall be made from the seller however reversal of credit shall also be an option for exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc
(iv) Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order through online and automated format.
(v) To maintain supplier side control and to control misuse of input tax credit facility, unloading of invoices, by seller to pass input tax credit, who has defaulted in payment of tax, above a threshold amount, shall be blocked.
(vi) There will be a three stage transition to the new system:
Stage I, for a period not exceeding six months, shall be the present system of filing of return GSTR 3B and GSTR 1. GSTR 2 and GSTR 3 shall continue to remain suspended.
In stage 2, the new return will have facility for invoice-wise data upload and also facility for claiming input tax credit on self declaration basis, as in case of GSTR 3B now.
After 6 months of this phase 2, the facility of provisional credit will get withdrawn and input tax credit will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods.