Starting from 1st April 2020, one in five Goods and Services Tax (GST) payers will simply need to send an SMS (short message service) to file monthly or quarterly returns. Instead of filing their returns online, assessees with ‘NIL’ returns can send an SMS to a specified number and confirm it using a one-time password (OTP).
Prakash Kumar, CEO of GST Network (GSTN) said, “Under the new system, assessees with nil turnover will just need to send an SMS and they will receive an OTP (one-time-password) and based on the confirmation, filing of returns can be completed.” GSTN provides shared IT infrastructure and service for the indirect tax regime to both central and state governments including taxpayers and other stakeholders.
Out of the 1.2 Crore GST base, almost 23% fall under the category of ‘NIL’ return filers. The move is aimed at simplifying GST compliance for businesses, especially those who have registered to be eligible for contracts from government and other agencies but do not undertake any business.
Once the new return system becomes effective from April, over 70% of those registered under GST with an annual turnover of up to ₹5 Crore can make do with the quarterly filing of returns. “Only 7% of the taxpayers with an annual turnover of over ₹5 Crore will have to file monthly returns,” added Prakash Kumar.
About 28% of assessees having an annual turnover of less than ₹5 Crore and engaged in B2C (business to customer) and reverse charge based supply can opt for the “SAHAJ” form (RET-2). On the other hand, assessees with annual turnover below ₹5 Crore and engaged in B2C, B2B (business to business) and reverse charge mechanism-based supply can opt for quarterly filing of return form called “SUGAM” (RET-3).
All other assessees who are engaged in the foreign trader or SEZ-based supply activities will have to file RET-1. Although these taxpayers will be able to file their returns quarterly, the payment of tax dues should be made on a monthly basis through a form called PMT-08.